Whether it’s the classic Italian BMT or the freshly-baked Meatball Marinara, chances are you have fond memories of grabbing a sandwich at Subway.
The fast food restaurant chain is renowned for its signature customizable sandwiches, salads, and sides, so it’s no wonder why aspiring entrepreneurs are considering a Subway franchise opportunity.
Getting started on a Subway franchise can be an exciting and rewarding experience.
As a franchisee, you will be joining a team of more than 44,000 stores that are currently open in 105 countries worldwide.
With the right planning and dedication, owning your very own Subway franchise can become a reality.
If you’re considering opening a Subway franchise, this article is for you.
Below, you’ll find everything you need to know about the Subway franchise, from the chain’s history to franchise requirements and expenses.
About the Subway
Subway is a fast food restaurant chain known for its submarine sandwiches or subs.
These subs are made using freshly-baked bread and a variety of ingredients such as meats, cheeses, vegetables, and condiments. Subway also offers wraps, salads, drinks, and sides such as chips and cookies.
Subway has become popular for its customizable sandwiches, which allow customers to design their own subs with the ingredients of their choice.
Customers can choose from an array of proteins, including chicken breast strips, steak slices, turkey slices, ham slices, and more.
There is also a range of toppings and sauces to choose from to give subs extra flavor, from Thousand Island dressing to jalapenos.
Subway’s menu also includes several signature sandwiches, such as the Italian BMT and the Meatball Marinara.
The Italian BMT consists of pepperoni, salami, and ham, while the Meatball Marinara consists of meatballs drenched in marinara sauce.
Both are served with provolone cheese and fresh toppings on a freshly-baked sub roll.
All of Subway’s restaurants have a modern, clean aesthetic designed to be inviting and welcoming.
The rustic wood paneling and accents bring a cozy, homey feel to the restaurant.
Subway also encourages franchised stores to get involved in their local communities by hosting fundraisers and events.
Subway Franchise History
Subway’s history began in 1965 when Fred DeLuca borrowed $1,000 from family friend Peter Buck to start a submarine sandwich shop.
He named the business Pete’s Drive-In: Super Submarines, and it was located at 3851 Main Street in Bridgeport, Connecticut.
In 1968 the name of the business was changed to Subway, and franchising began in 1974 with a restaurant in Wallingford, Connecticut.
By 1978, Subway had opened its first location on the West Coast in Fresno, California. In 1984, Subway opened its first international location outside North America in Bahrain.
Today, Subway is one of the world’s largest restaurant chains, with over 44,000 locations worldwide and counting.
It has become popular for its customizable sandwiches, which allow customers to design their own subs with various options for proteins, toppings, sauces, and more.
Subway has become an iconic fast-food chain known all around the globe for providing fresh ingredients on freshly-baked bread that can be customized just how you like it.
With its modern look and focus on giving back to local communities through fundraisers and events, it is no wonder why Subway has been able to thrive for over 50 years now.
Subway Franchise Model
| Cost Or Fees | Amount |
|---|---|
| Initial Investment | $116,000–$263,000 |
| Franchise | YES |
| Franchise Fee | $15,000 |
| Royalty Fee | 8% |
| Liquidity | $100,000 |
| Estimated Outlets | 44,000+ |
How much does it cost to Franchise a Subway?
Opening a Subway franchise requires a significant investment, starting with a $15,000 initial franchising fee. Additional expenses for setting up a new store can result in a total cost ranging from $116,000 to $263,000, influenced by factors like location and lease terms.
Franchisees are also responsible for an ongoing 12.5% of their weekly sales, which is divided into 8% royalties and 4.5% advertising fees. These fees support Subway’s operational expenses, including advertising campaigns and product development, while ensuring high-quality food at reasonable prices and rewarding loyal customers.
Compared to other large fast food chains such as McDonald’s, Subway requires a much lower initial investment due to its smaller staff requirements and limited kitchen equipment needs.
Additionally, compared to Burger King or KFC franchises that require additional upfront investments such as real estate or building renovations, the startup expenses for Subway are comparatively low thanks to its simple menu and streamlined operations model.
Subway Franchise Requirements
Subway franchises come with several prerequisites that must be met in order to be approved.
First and foremost, Subway requires any potential franchise owner to have a minimum net worth of $150,000 and liquid assets of at least $100,000 per store.
In addition, having prior restaurant experience or familiarity with franchising is also a preferred qualification for prospective franchisees.
Subway looks for individuals who possess strong leadership skills and have the capability to manage both employees and customers effectively.
Finally, prospective franchise owners are also required to take a two-part Basic Skills test, focusing on English and Maths, to ensure that they have the educational background necessary for running a successful Subway store.
You must also know the profit margin & owner’s salary of the Subway franchise.
Subway Franchise Training And Support
Subway provides franchisees with a comprehensive training program to ensure that they have the knowledge and skills to successfully run their stores.
The training program called the University of Subway consists of three weeks of intensive online instruction, followed by in-store and classroom training.
The online part of the program covers all aspects of running a Subway store, including customer service, operations, food safety and sanitation, product knowledge, and more.
Franchisees are also given access to an e-learning system where they can review materials at their own pace as well as receive feedback from their peers.
In addition to online training, franchisees will also be required to attend in-store workshops and on-site classroom sessions that cover topics such as team building and leadership development.
Finally, Subway offers an in-depth support structure that includes on-site visitations, online webinars, training sessions, and a customer service hotline to answer any questions or concerns.
Subway Franchise Terms Of Agreement & Renewal
Subway franchisees are expected to sign a binding agreement that will last for an initial term of 20 years.
This agreement sets out the rights and responsibilities of both parties, provides details on the training and support offered by Subway, and outlines the process for renewal.
At the end of the initial 20-year term, the franchisee has the option to renew their agreement for additional 20-year periods.
Unless either party opts not to renew, this renewal happens automatically. The good news is that there is no fee charged for this process.
Subway Franchise Obligations And Restrictions
Franchisees must comply with all of Subway’s brand standards, regulations, and policies.
This includes everything from adhering to the franchise agreement to operating the store in a manner consistent with Subway’s menu, processes, and procedures.
The franchisee should always be on-site, managing the restaurant directly or having a trained and proficient employee in charge of daily operations.
This is essential for maintaining quality control and service throughout the Subway chain.
In addition, the franchisee must remain current with all of their franchise fees, purchase products from approved vendors, comply with food safety regulations and health codes, and keep their store clean and tidy at all times.
Finally, franchisees may only sell Subway products and are prohibited from selling any other type of food or beverage.
They must also follow all local, state, and federal laws as well as any additional rules that apply to their specific store location.
Subway Franchise Financial Assistance
Subway offers financial assistance to certain first-time franchisees through its minority loan program.
This program is designed to help those who may not have the resources or credit history to be approved for traditional financing options.
Under this initiative, Subway will finance up to $10,000 of the initial franchise fee ($15,000) for qualified applicants.
This financing is available to all first-time, minority franchisees and does not require any direct or indirect financing from the franchisee.
In addition to this financial assistance, Subway’s designated affiliate lender offers a range of financing options that are tailored to the needs of individual franchisees.
These loans may be secured or unsecured, and the terms can vary depending on the creditworthiness of the borrower.
The coffee franchise market offers several opportunities for entrepreneurs, such as franchises Whataburger, Krispy Kreme, Domino’s Pizza, Del Taco Franchise, and Zwarma Franchise.
Subway Comparison
| Company | Subway | Taco Bell |
|---|---|---|
| Year Founded | 1965 | 1962 |
| Franchise Fee | $15,000 | $25,000–$50,000 |
| Initial Investment | $116,000–$263,000 | $525,000–$2,600,000 |
| Number of Outlets | 44,000+ | 55,000+ |
Conclusion
Subway has gained a reputation as one of the most successful franchise operations in the world.
Their commitment to providing quality support and training, financial assistance, and an extensive library of resources makes them a top pick for entrepreneurs looking to open their own businesses.
If you’re considering becoming a Subway franchisee, make sure to familiarize yourself with all requirements and restrictions before taking the next step.
FAQs
Does Subway Offer Franchising?
Yes, Subway offers franchising opportunities in the United States, Canada, and other countries around the world.
Who Founded Subway?
Subway was founded in 1965 by Fred DeLuca and Peter Buck.
How Many Subway Locations Are There?
As of 2023, there are more than 37,000 Subway locations worldwide.
Is Opening A Subway Franchise Worth It?
Yes, opening a Subway franchise is a great business opportunity and can be highly rewarding.
Amit Gupta is an experienced expert in digital marketing and co-founder of DrFranchises. With more than 11 years of knowledge in franchise digital marketing, SEO, email marketing, and social media marketing, Amit has helped many brands achieve incredible success online. As a passionate entrepreneur and owner of 7 franchises, he continues to study franchise models, looking at costs, revenue, and profitability to guide brands toward profitable growth. When he’s not working on digital marketing, Amit enjoys spending time playing with his beloved dog.