How Much Does a Subway Franchise Cost?
Total investment: $116,000 to $263,000. Here is the complete breakdown of fees, requirements, and what to expect as a Subway franchisee.
Subway Franchise at a Glance
Subway Franchise Overview
Subway is the second-largest QSR chain by location count. After years of declining sales and store closures, the brand was acquired by Roark Capital Group in 2024 with plans to revitalize operations. Subway's appeal to franchisees has traditionally been its low startup cost and simple operations. However, average unit volumes are among the lowest in QSR, and franchisee satisfaction has historically ranked poorly in industry surveys.
View metrics, industry data, and news coverage for Subway
Subway Investment Breakdown
Detailed cost breakdown based on current Franchise Disclosure Document (FDD) estimates.
| Cost Category | Low Estimate | High Estimate |
|---|---|---|
| Franchise Fee | $15,000 | $15,000 |
| Leasehold Improvements | $50,000 | $130,000 |
| Equipment & Signage | $25,000 | $55,000 |
| Opening Inventory | $3,500 | $6,000 |
| Training & Pre-Opening | $5,000 | $12,000 |
| Working Capital | $17,500 | $45,000 |
| Total Estimated Investment | $116,000 | $263,000 |
Estimates based on publicly available FDD data. Actual costs vary by location, real estate market, and construction costs. Always review the current FDD Item 7 for exact figures.
Ongoing Fees and Royalties
What you will pay Subway on a recurring basis after opening.
| Fee | Amount |
|---|---|
| Royalty Fee | 8% of gross sales |
| Advertising Fund | 4.5% of gross sales |
| Technology Fee | Varies |
Estimated Annual Fee Impact
Based on the estimated average unit revenue of $480,000:
Pros and Cons of a Subway Franchise
Advantages
- +One of the lowest total investments in QSR ($116K-$263K)
- +Simple operations with minimal cooking equipment
- +Second-largest QSR footprint globally provides brand recognition
- +Flexible store formats (inline, kiosk, non-traditional venues)
- +New ownership investing in brand refresh and menu innovation
Considerations
- -Average unit revenue is among the lowest in QSR at roughly $480K
- -12.5% combined royalty + advertising fees are high relative to revenue
- -Historical franchisee dissatisfaction and contentious franchisor-franchisee relations
- -Market oversaturation in many areas due to aggressive expansion
- -Brand perception challenges after years of negative press
Who Is the Ideal Subway Franchisee?
Subway is accessible to first-time franchisees with limited capital. The brand works well for operators who want a simpler, lower-cost entry into QSR. Multi-unit operators can scale quickly given the low per-unit investment. However, prospective owners should carefully evaluate unit economics in their target market.
Minimum Requirements Summary
Frequently Asked Questions
How much does it cost to open a Subway franchise?
The total investment to open a Subway franchise ranges from $116,000 to $263,000, including the $15,000 franchise fee, construction, equipment, inventory, training, and working capital. Exact costs depend on location, format, and local market conditions.
What is the Subway royalty fee?
Subway charges a 8% royalty on gross sales plus a 4.5% advertising fee, for a combined ongoing fee of 12.5% of gross sales.
How much does a Subway franchise make per year?
The estimated average unit revenue for a Subway location is approximately $480,000 per year. Actual performance varies by location, management, and market conditions. Revenue does not equal profit - operators must account for food costs, labor, rent, royalties, and other operating expenses.
How long is the Subway franchise agreement?
The standard Subway franchise agreement is 20 years. Renewal terms: 50% of then-current franchise fee.
How many Subway locations are there?
Subway operates approximately 36,800 locations worldwide, including 20,000 in the United States. Approximately 100% of locations are franchised.
Compare Subway with Other Franchises
See how Subway stacks up against similar QSR franchise opportunities.
| Brand | Franchise Fee | Total Investment | Royalty + Ad Fees | Est. Revenue |
|---|---|---|---|---|
| Subway | $15,000 | $116,000 - $263,000 | 12.5% | $480,000 |
| Jersey Mike's | $18,500 | $200,000 - $780,000 | 9.5% | $1.3M |
| Jimmy John's | $35,000 | $330,000 - $558,000 | 10.5% | $1M |
| Firehouse Subs | $20,000 | $343,245 - $976,700 | 11% | $962,000 |
| Arby's | $37,500 | $400,000 - $2.1M | 8.2% | $1.2M |
| Domino's | $25,000 | $200,000 - $600,000 | 11.5% | $1.4M |
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Latest Subway News and Analysis
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