How Do You Open a Subway Franchise?

Subway, the 37,000-plus sandwich franchise was founded in August of 1965 as Pete’s Subway.  The second location opened in 1966. In 1972, the name was officially changed to Subway, and founders Fred DeLuca and Dr. Peter Buck owned and operated 16 restaurants. To reach their goal of running 32 restaurants, the pair started franchising in 1974. The sandwich, wrap and salad brand has low startup costs and a business model built with scalability in mind. 

The brand survives on three guiding principles: 

• Always provide exceptional service to valued guests.
• Offer high-quality, flavorful menu options at a great value.
• Never stop evolving to improve the Subway brand.

The brand spans across more than 100 countries and has more than 20,000 dedicated franchisees. The franchise is dedicated to always providing better food and a better customer experience. 

The estimated investment cost to open a Subway franchise is $182,550–$506,900. A breakdown of the costs is below. 

• Initial Franchise Fee: $15,000
• Real Property: $2,000-$12,000
• Liquid Cash Requirement: $30,000
• Leasehold Improvements: $40,900–$200,000
• Equipment, Furniture and Décor: $90,000–$180,000
• 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 and Lodging): $2,500–$4,500
• Legal and Accounting: $1,000–$3,500
• Opening Advertising: $2,000–$4,000
• Miscellaneous Expenses (Business License, Utility Deposits and Small Equipment): $4,000–$8,000
• Additional Funds—Three Months: $12,000–$42,000

The standard franchise fee is $15,000. However, Subway offers a discount for franchisee candidates that are veterans. There is also a $5,000 decrease for those looking to open satellite locations, and that is decreased to $1,000 if the location will be open for one year or less.

When franchising with Subway, there are three available building types:

• Drive-Thru
• Inline
• Non-Traditional

How much you will make from opening a Subway is not reported, and franchisees are not permitted to provide information on actual or potential sales. Income will vary based on location, and candidates will receive training. Subway has training facilities all over the world, and the training location you’re assigned to will vary based on location.
The first three steps of opening a subway are: 

• Requesting a Subway franchise kit
• Securing financing 
• Submitting a franchising application. 

Once the franchise agreement is finalized, you’ll have to pay the $15,000 franchise fee and attend training. After you finish training and find a location, you’re on the path to opening a Subway. 

If you are interested in opening a Subway, you can view their franchise website here.