Buying A Subway Franchise
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According to the company, Subway has more locations worldwide than any other restaurant chain. As of 2023, there are about 37,000 locations spread across more than 100 countries.\"}},{\"@type\": \"Question\",\"name\": \"Who Owns Subway\",\"acceptedAnswer\": {\"@type\": \"Answer\",\"text\": \"Subway, Inc. is owned and run by the DeLuca family. Subway was founded in 1965 by 17-year-old Fred DeLuca. Headquartered in Shelton, Connecticut, each Subway franchise is independently owned and operated. Because it is privately held and stores are owner-operated, Subway is not listed on a stock exchange.\"}},{\"@type\": \"Question\",\"name\": \"What Is Subway's Most Popular Menu Item\",\"acceptedAnswer\": {\"@type\": \"Answer\",\"text\": \"The most popular sandwich varies depending on the country a Subway is in. In the U.S., the most popular menu item at Subway is often the turkey breast or tuna sandwich, or Italian B.M.T. In Australia and New Zealand, the Greek lamb with tzatziki comes in first, and the shrimp avocado sandwich in Japan. In the U.K., the Indian-inspired chicken tikka sub is the most popular.\"}}]}]}] Investing Stocks Bonds Fixed Income Mutual Funds ETFs Options 401(k) Roth IRA Fundamental Analysis Technical Analysis Markets View All Simulator Login / Portfolio Trade Research My Games Leaderboard Economy Government Policy Monetary Policy Fiscal Policy View All Personal Finance Financial Literacy Retirement Budgeting Saving Taxes Home Ownership View All News Markets Companies Earnings Economy Crypto Personal Finance Government View All Reviews Best Online Brokers Best Life Insurance Companies Best CD Rates Best Savings Accounts Best Personal Loans Best Credit Repair Companies Best Mortgage Rates Best Auto Loan Rates Best Credit Cards View All Academy Investing for Beginners Trading for Beginners Become a Day Trader Technical Analysis All Investing Courses All Trading Courses View All TradeSearchSearchPlease fill out this field.SearchSearchPlease fill out this field.InvestingInvesting Stocks Bonds Fixed Income Mutual Funds ETFs Options 401(k) Roth IRA Fundamental Analysis Technical Analysis Markets View All SimulatorSimulator Login / Portfolio Trade Research My Games Leaderboard EconomyEconomy Government Policy Monetary Policy Fiscal Policy View All Personal FinancePersonal Finance Financial Literacy Retirement Budgeting Saving Taxes Home Ownership View All NewsNews Markets Companies Earnings Economy Crypto Personal Finance Government View All ReviewsReviews Best Online Brokers Best Life Insurance Companies Best CD Rates Best Savings Accounts Best Personal Loans Best Credit Repair Companies Best Mortgage Rates Best Auto Loan Rates Best Credit Cards View All AcademyAcademy Investing for Beginners Trading for Beginners Become a Day Trader Technical Analysis All Investing Courses All Trading Courses View All Financial Terms Newsletter About Us Follow Us Facebook Instagram LinkedIn TikTok Twitter YouTube Table of ContentsExpandTable of ContentsSubway: An OverviewThe Cost of a Subway FranchiseSubway Franchising ProcedureSubway Franchise SalesSubway Franchise FAQsThe Bottom LineSmall BusinessHow to Start a BusinessThe Cost of Buying a Subway FranchiseByTK McDonaldFull BioTK McDonald has 13+ years of experience as a financial advisor for the U.S. Army. She is currently a writer for District Media.Learn about our editorial policiesUpdated January 15, 2023Reviewed byEric EstevezFact checked byTimothy Li Fact checked byTimothy LiFull Bio LinkedIn Timothy Li is a consultant, accountant, and finance manager with an MBA from USC and over 15 years of corporate finance experience. Timothy has helped provide CEOs and CFOs with deep-dive analytics, providing beautiful stories behind the numbers, graphs, and financial models.Learn about our editorial policiesMany entrepreneurs favor franchise ownership over starting unique businesses in the small business industry. With franchise ownership, franchisee entrepreneurs benefit from licensing an established business's procedures and processes from the franchisor. These licensing benefits give the business owner numerous advantages, including an association with an established business and the help of an already established branding strategy.
Subway, Inc. is owned and run by the DeLuca family. Subway was founded in 1965 by 17-year-old Fred DeLuca. Headquartered in Shelton, Connecticut, each Subway franchise is independently owned and operated. Because it is privately held and stores are owner-operated, Subway is not listed on a stock exchange.
From the income statement, we see that the franchisor made $634,329,000 in franchise royalties in 2020 and $ 834,117,000 in 2019. With an 8% royalty fee, we can calculate the estimated average gross sales for the 22,201 franchised outlets that were open in 2020.
Another difficulty with the Subway operator or Subway franchisee is that there is a high employee turnover. Like many other food services and food businesses, there is a lot of employee turnover. They work for a short period of time and then they leave. And then, as an owner or operator, you have to keep hiring people and constantly train them.
And one of the biggest problems for someone looking to make an investment in a Subway franchise is if they are a foreign national seeking and holding an E-2 , L-1 or EB-5 investor visa . Subway does not allow foreign nationals as franchisees in the U.S. The person must be a green card holder or be a U.S. citizen. Which means it is not even an option for someone seeking to obtain an investor visa such as the E-2, L-1 or EB-5. I hope you found this insightful.
Your total investment to open a new Subway franchise will range between $150,000 to $328,700. Be prepared for a $200,000 plus investment on average. Your payments to Subway will include 8% of your total gross sales as well as 4.5% of your gross sales that will be allocated to advertising. There are other fees including your local rent/license fee, equipment leases, software maintenance call us for specific details.
As Franchise brokers and consultants we are in a unique position in that we have access to every Franchise Disclosure Document, including financials, of most franchises. We have access to see the failure rates, transfers, average unit volumes, how much an average Subway store generates in revenue, bankruptcies, lawsuits and many other data points. Thatès why it makes sense to call a broker when you are exploring franchises as we have all this information available to our candidates.
We also speak regularly with existing Subway franchise owners who are selling their locations and often hear the reasons behind their desire to sell. One of our partners here at Franchise City was also a multi unit Subway owner for a number of years before selling his stores.
The first question I ask is why. Why do you want to invest in a Subway. Most of the time people suggest \"Because it's busy when I go at lunchtime\" or \"They make great subs\" which may possibly be the worst reasons to invest a couple of hundred thousand dollars. Some say they are getting a \"deal\" on a resale location, and I would be especially wary of those, and another popular reason is \"Because they are the most successful franchise\" having more locations than any franchise in the world. But what does that success really mean It means they have thousands of locations -and that means that you will very likely have a competing Subway store very close to your own.
Then I ask if they have previous food service experience. Most don't. They often have visions of traveling the world on luxury cruises while their Subway franchise back home earns them millions of dollars on auto pilot. .
If you want your Subway store to do well you will have to work in it. It's a business like any other and is not a magical ticket to wealth and single locations do not make anywhere near as much money as you may think. In fact right on their website when asked how much can you make with a Subway franchise they suggest speaking with \"multi unit owners\" to see how much you can earn with a Subway. They prefer you do not speak with single store owners because the numbers are low, we'll look at those in a minute.
1. Massive Competition. If you live in any major city and have a desire for a Sub you won't drive very far before seeing another Subway Franchise. That is convenient for you as a consumer but for franchisees not so great.
When you combine the fact that your store is competing with many other Subways with the very low margins seen on promotions like the $5 sub - you have a recipe for working hard for little payback. Recently, Subway, under pressure from franchisees, finally allowed stores to make the decision at the store level on whether to sell $5 subs,as for the longest time they were forced to do it. But ask yourself this, if the store down the street sells $5 subs, you do not, where will the customer go
and you see this type of behavior in real estate speculation, cryptocurrency, as well as in stock market investing. Right before the decline, at the height of public popularity, there is a massive influx of investors who throw money at a supposedly \"incredible opportunity\". But the opportunity only looks incredible because everyone else is doing it. And you can't blame investors as they see franchises everywhere and assume that equates to success - when all it really means is intense competition. 781b155fdc