How Much Does It Cost to Buy a Subway Franchise?

The global Subway sandwich brand has franchise opportunities available across the country. Here’s a closer look at what it’ll cost you to buy one.

By Victoria CampisiStaff Writer

1:13PM • 01/17/24

Subway is one of the most recognizable sandwich franchises in the world. With over 36,500 locations already, the brand is forecasting continued growth in the coming years and looking for qualified franchisees to partner with.

The estimated initial investment for a Subway restaurant ranges from $229,050 to $522,300, depending on various factors such as building size, configuration and location. Franchisees must also have a $150,000 net worth with $100,000 in liquid assets per location. Additionally, franchisees must pay Subway a royalty fee of 8% revenue, as well as a variable marketing fee of 4.5% revenue.

Investment Breakdown

Subway does not have a breakdown of its investment costs available on its website. However, third-party finance platform SharpSheets has revealed a list of costs based on a review of the brand’s 2023 Franchise Disclosure Document (FDD).

Initial Franchise Fee: $15,000
Leasehold Improvements: $75,000-$200,000
Equipment, Furniture, Decor: $92,700-$194,400
Grand Opening: $2,000-$4,000
Working Capital: $12,000-$42,000
Others: $32,350-$66,900
Total: $229,050- $522,300

When purchasing an existing Subway restaurant, capital expenditures can include the following: the restaurant’s remodel schedule, equipment replacement, adding drive-thru capabilities and any applicable relocation costs.

Location Costs

The choice of location plays a critical role in the success of a Subway franchise. Costs associated with securing a suitable location include lease payments, security deposits, and any necessary renovations or improvements to meet Subway's specifications. Urban areas or high-traffic locations might have higher leasing costs while suburban or rural areas could offer more affordable options.

Additionally, Subway offers several types of franchise options — freestanding, inline, endcap, drive-thru, various non-traditional options — which can also impact the costs.

Training and Support

As part of the initial fees, Subway provides comprehensive training programs for new franchisees and their staff. The training covers various aspects of operating a Subway store, including food preparation, customer service and management. Franchisees may incur costs associated with training, which could include travel, accommodation, and related expenses.

Does Subway Offer Financing?

Subway offers in-house financing to cover a franchisee’s franchise fee and equipment, according to Entrepreneur. Subway also has relationships with third-party sources that offer financing to cover the franchise fee, startup costs, equipment and inventory.

Opening a Subway franchise involves a substantial financial commitment. While the potential for success is significant given the brand's popularity, prospective franchisees must carefully assess their financial capacity and conduct thorough research to understand the specific costs associated with their chosen location.

Always consult with Subway's official franchise documentation, and seek professional advice to ensure accurate and up-to-date information before making any financial decisions.