Franchises are a great way to get into the world of business and generate revenue without much risk.
Many people looking to have a business are looking into starting by buying a franchise to learn how to run a business without too much risk.
Franchises are generally a very profitable way of doing business if you go for a popular brand like Subway.
Subway is one of the world’s most popular and largest restaurant chains, with about 10 billion sales annually throughout its franchise system.
Since its market is huge, there is a great chance of success. If you are thinking of owning your Subway franchise, you might wonder about its profitability.
Let’s take a look at the average revenue, profitability, number of Subway franchises, and every other detail about Subway franchises’ profitability.
Average Revenue & Profitability Per Subway Outlet
When you own a Subway franchise, the outlet’s revenue and profitability are generally very high because of the brand’s name.
However, it has its own costs that reduce the profitability of your revenue. Although, with both the revenue and the profitability, there are many things that change the number.
The location, business, charges in your country by Subway, and other details all play a major role in your numbers.
However, looking at the average numbers of all Subway franchise outlets, we can have an idea of how much Subway franchises can expect to make in revenue and how much you can profit.
An average Subway franchise outlet generally makes around $400,000 annually in revenue.
When you subtract the franchise’s costs, fees, and salaries, the average profitability of a Subway outlet is about $40,000 to $50,000 annually.
Subway has low start-up costs when you compare its start-up costs to similar franchise brands. However, you have to pay more in fees every month and year. Their fees are like this:
- Franchise fee of $15,000
- 12% of gross sales every week for franchise royalties and advertising fees
Estimated Subway Franchise Outlets
Subway is one of the biggest franchise brands in the world. They have tens of thousands of stores worldwide. They are always growing, adding hundreds of stores each year.
The numbers always change, but the latest data gives us a glimpse of how many stores there are globally and also in the United States.
As of 2023, there are approximately 36,000 Subway franchises globally in over 100 countries.
About 20,000 of these stores are in the United States across 54 states and territories. 10% of these outlets in the United States are in California, which makes it the state with the most Subway locations in the United States.
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Failure Rate of Subway Franchise Outlets
Not every franchise makes revenue and profit after it starts working and achieves success.
Franchise outlets, even Subway franchises, can also fail due to various reasons like bad management, not enough revenue, and so on.
Failure rate includes franchise unit terminations, non-renewal franchise outlets, and also every outlet that stopped their operations for any reason in a year.
This rate mostly focuses on the number of franchise outlets that basically stopped working, no matter the reason.
For Subway franchises, the last data in 2021 shows us that Subway’s failure rate was around 10%.
There were about 1,500 ceased Subway franchise operations and 500 new store openings in 2021 alone.
This means that the overall Subway franchise outlets decreased by about 1,000 in 2021. Over the past three years until 2021, Subway’s failure rate has been over 20%.
This means that Subway lost more franchise outlets in net numbers in the past three years preceding 2021.
How Much Does a Subway Franchise Owner Make a Year?
The numbers that Subway franchise owners make a year change depending on many things about the specific franchise outlet.
If the outlet is in a famous city’s downtown and gets a lot of visitors, that owner’s salary will be much more than most of the Subway franchise owners.
In addition to this, Subway also doesn’t reveal the income of their franchises and franchise owners.
However, there are people on the internet who are willing to put this information on certain websites to help people get a clear picture.
According to Indeed and the salary information there, a subway franchise owner makes about $86,426 annually on average.
This number is just an average, and some owners could make way higher than this or way lower.
The average income of a Subway franchise owner is about 35% higher than the national average in the United States.
Subway franchise owners outside of the United States could look at different numbers depending on the country of the outlet. However, overall, it will be close to this number.
The Verdict
Franchising is a very lucrative way of owning a business without all the traditional risks of having your own business.
Brands like Subway are some of the biggest brands in the world, and they generate revenue way easier than lesser-known brands.
On average, a Subway franchise outlet has a profitability of around $40,000 to $50,000 annually minus all the costs and fees.
Subway has about 36,000 outlets across the globe in 100 countries as of 2023. About 10% of Subway franchises fail every year and terminate the outlet.
An average Subway franchise owner makes about $85,000 annually. These numbers change depending on the store’s location and how busy it is.
Sources
https://www.franchisedirect.com/information/howmuchdoesitcosttoopenasubway
https://www.scrapehero.com/location-reports/Subway-USA
https://www.indeed.com/cmp/Subway/salaries/Business-Owner
Amit Gupta is the founder of DrFranchises – a digital marketing agency that helps brands rank better on Google Maps through local SEO strategies. Amit has over 11 years of experience in digital marketing, SEO, email marketing, and social media marketing. He’s also the owner of multiple franchises and has helped countless brands achieve success online. When he’s not working, Amit can be found playing with his dog.