INTRODUCTION
Many entrepreneurs choose a franchise holding over founding their own company in the small business field. Franchisee entrepreneurs profit from the franchisor’s licensing of an experienced company’ techniques and operations. These license benefits provide several benefits to the business owner, including affiliation with a well-established company and the merits of a well-established marketing plan. Let’s know “How Much Does A Subway Franchise Cost?”.
Subway is one of the most well-known brands of sandwich shops in the fast-food sector. In reality, in terms of shop count, Subway is one of the top fast-food companies. As a result, it’s no wonder that it’s one of the most desired franchise opportunities.
THE PRICE OF OPENING A SUBWAY FRANCHISE
The inexpensive cost of starting a Subway sandwich business franchise is one of its most appealing features. The franchisee is normally needed to pick a store location and pay the startup expenditures as the first stage in launching a franchise enterprise. Real estate and building expenditures are included in the initial investment of a shop location. The overall cost of the original restaurant location for a Subway franchise is projected to be between $116,000 and $243,000, which is much less than other competing fast-food businesses.
There are additional charges associated with franchising a firm. To establish the firm, a $15,000 beginning licensing price is needed, compared to a $40,000 to $90,000 licensing fee for Dunkin’ (DNKN) or a $45,000 fee for Mcdonald’s (MCD). Licensing fees are also needed on a yearly basis. Subway charges a yearly licensing fee of 8% of total sales, which is greater than the 5% and 4% charged by Dunkin’ and McDonald’s, respectively. In addition, the franchisee is obliged to pay a 4.5% ad fund charge on total gross sales.
THE SUBWAY RESTAURANT FRANCHISING PROCESS
Before going into a formal licensing deal with a Subway operator, a franchisee must go through an extensive due diligence procedure and meet a number of particular conditions. The approval of the company site is usually the first step for a Subway franchise owner. This necessitates extensive market research and the investment of a significant portion of the franchisee’s resources. In addition to obtaining clearance for a Subway business location, the franchisee entrepreneur must have a net worth of $80,000 to $310,000. Opening a franchise usually necessitates a large amount of liquid cash, which for a Subway franchise runs from $30,000 to $90,000.
The franchisee then joins a licensing deal with the franchisor after receiving site clearance and meeting the funding needs. Every week, Subway franchisees pay 12.5% of gross revenue (excluding sales tax); 8% goes to franchise royalty, and 4.5% goes to marketing. The option to use the company’s operating methods, trademark rights, and marketing is one of the biggest advantages of a franchised firm. Franchisees may largely depend on the franchised firm’s established marketing for sales because of these licensed business benefits.
THE SALES FROM A SUBWAY FRANCHISE
Subway sandwiches and the Subway company are well-known, allowing Subway to be the highest revenue earner in the fast-food sandwich market. Subway had its best revenue year since 2013 according to the most recent public numbers from 2021.
CONCLUSION
A Subway franchise is a wonderful alternative for entrepreneurs considering launching a franchise business since it has the advantages of an existing firm, cheap beginning expenses, and mother company assistance.
FREQUENTLY ASKED QUESTIONS
Why should I become a member of the Subway team?
Connecting with the Subway group offers the chance to own an established enterprise with minimal investment, simplified functions, flexible layouts, locally and nationally support, regional and national marketing, a two-week training system, learning for our entrepreneurs and their employees, store development assistance, design support, lease agreements, building assistance, and much, much more.
What are the Subway Franchise Fees?
Subway takes money from its franchisees and charges them a weekly cost of around 12.5% of total revenue, fewer sales taxes. From this 12.5%, 8% is for royalties and the rest 4.5% is for marketing.
What Is the Profit Margin of a Subway Franchise?
A Subway store makes roughly $400,000 in yearly revenue on average. Revenue is estimated to be roughly $40,000 as a result of this.
Will I be given any kind of training?
Definitely! Across the year, training sessions are offered. Subway has training sites all over the globe, with our primary training facility in Milford, Connecticut. Based on your region and preferred language, you will be matched to a training center.
Is Opening a Subway Franchise Worth It?
Yes, a Subway franchise is worthwhile to operate since its start-up expenses are cheaper than those of rivals like McDonald’s.
McDonald’s charges $45,000 in licensing fees and can cost up to $2 million in start-up costs, whereas Subway charges $15,000 in licensing fees.
Opening a Subway franchise in a region where there isn’t one nearby might be a profitable business.
