How Much Money Does Subway Bring In Monthly In Wvc Ut

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How Much Does It Cost to Open a Subway?

One of the most popular searches on the internet is "how much to open a Subway franchise?" This article overviews the franchisor-provided estimates for the opening of one Subway restaurant.

The estimated financial range for setting up and operating a Subway restaurant for the first three months ranges between $100,050 and $342,400, depending on location type. Subway has two types of franchises: traditional and non-traditional.

Traditional locations are full-service restaurants where the only purpose is the operation of a Subway restaurant. Non-traditional locations are also full-service, but are housed with another business. Examples of non-traditional locations include: convenience stores, gasoline stations, highway rest stops, department stores, hospitals, parks, universities, schools, sports arenas, convention centers, airports, theme parks, national parks, bus and railroad terminals, military bases, business complexes, assisted living/nursing homes, and other similar locations.

Based off of its years of experience, Subway estimates the estimated initial investment range for both types. The data in the chart below comes from Subway's 2020 Franchise Disclosure Document (FDD). The estimated initial investment range covers from a non-traditional location size up to a traditional location size.

Name of Fee	Low	High
Initial Franchise Fee	$15,000	$15,000
Real Property	$2,000	$12,000
Leasehold Improvements	$40,900	$200,000
Equipment Lease Security Deposit	$7,500	$15,500
Optional Security System	$2,450	$3,550
Freight Charges (varies by location)	$3,000	$14,000
Outside Signage	$1,600	$8,000
Opening Inventory	$4,400	$6,050
Insurance	$1,200	$5,000
Supplies	$500	$1,300
Training Expenses (including travel & lodging)	$2,500	$4,500
Legal and Accounting	$1,000	$3,500
Opening Advertising	$2,000	$4,000
Miscellaneous Expenses (business license, utility deposits & small equipment)	$4,000	$8,000
Additional Funds – three months	$12,000	$42,000
ESTIMATED TOTAL	$100,050	$342,400

Variations in final cost depend on area real estate costs, the size of restaurant being opened, renovations that need to be made, and additional factors such as the amount of traffic the restaurant gets in its opening months.

Like any similar business, Subway opening costs include acquiring real estate, renovation and/or construction costs, signage, professional fees (which can include license, accounting and lawyer fees), and more. However, the defining fee for buying a franchise is the franchise fee.

The franchise fee is basically a cover charge for entry into a franchise system, and for taking advantage of the expertise the franchisor has acquired. It typically covers the right to use the franchisor's system (including trademarks and operating system), and services the franchisor provides to franchisees like help finding a location, training materials, etc. For Subway, and most franchises, the franchise fee is due in full when the franchise agreement is signed.

As noted in the chart above, the standard Subway franchise fee is $15,000. However, exceptions do apply.

Subway currently offers a discount of the franchise fee for qualified US Veterans who purchase a franchise. The franchisor also offers to finance $10,000 of the franchise fee if franchisees are purchasing their first franchise and they qualify under its minority loan program. A similar loan program may be offered to franchisees purchasing a franchise for a low density market.

A reduced franchise fee of $5,000 is also available to Subway franchisees who desire to open a satellite restaurant—this fee will be reduced to $1,000 if the satellite will be in operation for one year or less. The franchise fee would be waived entirely for satellite locations located in the same facility of the base Subway restaurant.

In addition, the franchisor is currently waiving its initial franchise fee for school lunch locations, and for oil company retailers who have at least 50 units and convert an existing sandwich business they've created, own, and operate at their facility into a Subway restaurant.

In addition to the opening costs, Subway also has a liquid cash requirement of at least $30,000. The requirement is the amount of money a franchisor suggests a franchisee have in savings and able to access quickly in case of emergencies and setbacks when opening the business. It also accounts for regular living expenses until the franchise unit begins turning a profit large enough for the franchisee to garner an adequate take-home wage.

For more details on the costs of a Subway franchise, please see our Subway FDD page. To get franchise investment details on other related franchise opportunities, click here.