Subway

Subway

Subs, salads
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Franchise 500 2023
2023 Franchise 500 Rank
N/R Not ranked last year
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Initial investment
$140K - $342K
Units as of 2019
41,600 arrow down 7% over 3 years

Start a Subway Franchise | Costs and Requirements

Subway is a franchised restaurant chain known for its delicious subs, catchy jingles, iconic brand colors, logo and, more recently, its star-studded commercials. 

If you’ve ever dreamed of owning your own business and love to eat fresh, opening a Subway restaurant could be the perfect combination of business and interests. Read on to learn everything you need to know about becoming a Subway franchise owner. 

Related: 50 Signs You Need to Start Your Own Business

What Is Subway’s Mission?

Subway prides itself on serving fresh, convenient and affordable food.

They are famous for their freshly baked bread, flexible menu options and customizable style. Subway values listening to its customers and updating its menu, services, and overall experience to ensure they offer top-of-the-line customer satisfaction. 

What Is Subway’s History?

You may have thought that Subway started with sandwiches and passion. While this isn’t technically wrong, it doesn’t paint the whole picture. 

Subway began with a teenager, a college dream, a loan, and a handshake. 

In 1965, 17-year-old Fred DeLuca wanted to attend college but wasn’t sure how he would afford it. When DeLuca asked a family friend for advice, he gave DeLuca a $1,000 investment to open up a submarine sandwich shop in Bridgeport, Connecticut. 

Because the first shop was a success, DeLuca and his investing business partner, Dr. Peter Buck, opened up sixteen more sandwich shops over the next ten years. The pair had a goal to double that number, so they began franchising their sandwich stores. 

Today, Subway is one of the world’s most popular restaurant brands, with over 37,000 stores in more than 100 countries. And since Subway loves to franchise, you could be the one to open their newest location.

The corporation has 20,000 franchisees that contribute to its success. The restaurant chain continues to grow, integrating cutting-edge technology into its business models, such as in-app ordering and curbside pickup. Some locations even offer the age-old food service strategy of delivery. 

Additionally, Subway has expanded to include non-traditional locations in gas stations and convenience stores.

What To Know About Owning Your Own Subway Franchise

Subway franchises typically require less equipment than other restaurants even though their menu has plenty of options. This is because their menu items are variations of each other and do not require extra equipment. And, with the small number of staff required to operate a sandwich counter and the modest location size requirements, the franchise is straightforward to manage.

Related: Considering franchise ownership? Get started now and take this quiz to find your personalized list of franchises that match your lifestyle, interests and budget.

Subway sandwich shops serve fresh, delicious, custom sub sandwiches. This is common knowledge. 

But what else should you know before opening a Subway franchise? Whether you’re a first-time business owner or own many small businesses, starting a franchise location comes with unique perks and some potential drawbacks. Knowing the pros and cons of owning a business can help you decide if it’s right for you. 

Five benefits of becoming a franchise owner include:

  1. Proven successful roadmap for business
  2. Brand name recognition
  3. High rate of success
  4. Broad purchasing benefits
  5. Profit margin potential

Five cons of becoming a franchise owner include:

  1. Building structure limits and restrictions
  2. Limited individual creativity s
  3. Startup costs
  4. Royalty fees
  5. Franchisors have access to your financial records

Why Is Subway a Good Franchise Choice?

There are many franchise opportunities, so many that choosing the right one can be time consuming. If you’re looking for solid reasons to choose a Subway restaurant franchise as your next business opportunity, read on to learn about  some of Subway’s most attractive aspects. 

Core Values

Subway’s success started early. Still, even though the business grew rapidly, its founders wanted to stay true to their original mission. 

Today, the Subway brand still follows the three principles that started it all:

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

Sustainability

Subway is committed to minimizing its environmental impact, and sustainability is at the forefront of this commitment. If sustainable practices matter to you, then Subway is a franchisor that will support you in that effort. 

The corporation tries to be as sustainable as possible by:

  • Making efforts toward 100% recyclable, compostable, and/or biodegradable packaging
  • Increasing use of recyclable paper and decreasing plastic content material
  • Working with franchisees to increase container recycling rates
  • Collaborating with animal welfare organizations to increase humane practices for ingredients
  • Implementing energy-efficient equipment like ovens, refrigerators, and ice machines

Brand Recognition

Brand recognition and success can often seem like cause and effect. Brand recognition can make it a lot easier to grow your customer base, which may provide your new business with a considerable advantage. 

When it comes to brand recognition, Subway is one of the best. With successful locations in worldwide markets, customers are likely to know what you have to offer as soon as you open.  

Community Outreach

Subway prides itself on giving back to the communities it serves. The Subway Cares Foundation aims to empower its franchisees to be active and positively impact various local communities surrounding its locations.

The organization focuses on three goals:

  • Hunger relief
  • Tuition assistance
  • Mentoring tomorrow’s leaders

Craveable Menu

You’ll want to learn the menu inside and out as a franchisee. Fortunately for you, since Subway is so popular, you may already know some of their big-ticket items.

Popular Subway menu attractions include:

  • Fresh Melts
  • No Bready Bowls
  • Wraps
  • Breakfast
  • Salads

And, of course, Subway is known for its six-inch and Footlong sandwich sizes. 

Subway Franchise Requirements

If you’re ready to own a Subway franchise, we’re here to help. Before going over the step-by-step process, ensure you meet Subway’s initial requirements below.

Experience

Subway is looking for seasoned franchisees who have formerly or currently own a restaurant or a Subway franchise location. 

Subway also likes owners looking to open multiple units. It helps if you have at least a basic understanding of how the process works, what the requirements are, and what you’ll need to develop a successful business plan.

Of course, experience isn’t strictly required; however, it is preferred.

Leadership Team

Subway is looking for leaders with an entrepreneurial spirit, proven leadership success, and individuals that love mentoring  teams. Subway is growth oriented and  they want franchise owners that think the same way. 

Shared Values

As a potential franchise owner, you’ll want to ensure the franchisor cares about what you care about. And while not strictly a requirement, Subway also looks for franchisees with shared values.

Subway looks for franchisees who are:

  • Bold
  • Empowered
  • Accountable 
  • Fun

Subway takes pride in what it does, values its employees and wants to give back to its community. If that sounds like you, then your values are in sync with Subway. 

Financial Requirements

Subway is a big name, and it comes with significant financial requirements. Before diving into the process, ensure you have the capital.

Initial Subway franchise costs generally include:

  • Net Worth: $150,000
  • Liquid Assets: $100,000 per location
  • Initial Franchise Fee: $10,000 - $15,000 (depending on location)

However, it’s important to keep in mind how much easier it is to open a Subway location than starting your own small business from scratch. While it may seem like a hefty startup investment, everything that comes with purchase justifies the investment. 

How To Become a Subway Franchise Owner

If you meet Subway’s initial investment requirements and are ready to move forward, take a look at the step-by-step process of becoming a Subway franchise owner. 

1. Inquire and Research

Subway, like any franchisor, will research you as you research them. You will complete a questionnaire with essential information like your name, contact information, experience and why you want to open a Subway location. 

Once Subway completes its initial check, it will provide you with its Franchise Disclosure Document (FDD) to help you with your research. 

Key details of the FDD include:

  • Company’s description and history
  • Current or previous litigations
  • History of bankruptcy
  • Investment costs and fees
  • Products and services details
  • Copyrights, patents, and proprietary information
  • Financial statements

2. Connect and Apply

During this step, you will be partnered up with an experienced Subway franchising team member for interviews. While they’ll ask you questions, this is also a great opportunity to ask them anything you’re curious about regarding the application process or the daily operations of owning a Subway location. 

Related: This Is How You Prepare to Nail the Interview for Your Dream Job

Together, you will continue your research, learn more about Subway’s franchise process, and continue the vetting process as you build your final application. 

3. Select Your Location

At this stage, you should research your ideal area to see if there is space, physically and competitively, for a Subway location. 

What should you research in real estate? Ask yourself these eight essential questions: 

  1. While competition is healthy, too many strong competitors in your area might slow your growth. 
  2. What other sandwich shops are in that area? 
  3. What other fast-food chains are in the area? 
  4. Do your competitors offer a drive-thru option? If not, can your location offer one? 
  5. What kind of traffic does the area get? 
  6. Is the location easily accessible to customers?
  7. What are Subway’s guidelines for its locations?
  8. Will the space accommodate the setup, appliances, and amenities?

4. Sign the Paperwork

Once you have selected the perfect location, it’s time to make things official by signing the franchise agreement. 

Make sure you take the time to celebrate your new business's success. This is just the beginning, but getting to this stage is already quite an accomplishment. 

5. Build and Prepare Your Subway Location

Before opening, you’ll acquire, remodel, or build a store, depending on the location. Subway will provide you with design and construction teams to ensure the brand stays intact. 

6. Training

You will be assigned a training center and complete online learning based on your location and language preference. You and your management team will attend Subway’s online training program, the University of Subway, for three weeks. 

7. Open

The research is finished, the paperwork is signed and the building is set. Your training is complete. Now, it’s time to open a Subway store franchise. 

Subway will supply you with an experienced operation team during your opening process to ensure everything goes smoothly and you feel supported as you open up your new franchise.

If you have the drive and financial means, Subway could be a rewarding new business venture.

Looking for more info on all things franchising? Explore Entrepreneur’s Franchise Center here for more resources

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Company Overview

About Subway

Industry
Food
Related Categories
Sandwiches
Founded
1965
Parent Company
Doctor's Associates
Leadership
John Chidsey, CEO
Corporate Address
325 Sub Wy.
Milford, CT 06461

Business Overview

Franchising Since
1974 (2023-1974 years)
# of employees at HQ
975
# of Units
41,600 (as of 2019)

Information for Franchisees

Here's what you need to know if you're interested in opening a Subway franchise.

Financial Requirements & Ongoing Fees

Here's what you can expect to spend to start the business and what ongoing fees the franchisor charges throughout the life of the business.

Initial Franchise Fee Information Circle
$15,000
Initial Investment Information Circle
$140,050 - $342,400
Net Worth Requirement Information Circle
$80,000 - $310,000
Cash Requirement Information Circle
$30,000 - $90,000
Veteran Incentives Information Circle
Franchise fee waived if opening on a military/government location; 50% off franchise fee if opening on non-government location but receiving government financing
Royalty Fee Information Circle
8%
Ad Royalty Fee Information Circle
4.5%
Term of Agreement Information Circle
20 years
Is franchise term renewable?
Yes
Take Our Free Franchise Quiz!

Financing Options

Some franchisors offer in-house financing, while others have relationships with third-party financing sources to which they refer qualified franchisees.

In-House Financing
Subway offers in-house financing to cover the following: franchise fee, equipment
Third Party Financing
Subway has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment, inventory

Training & Support Offered

Franchisors offer initial training programs and a variety of ongoing support options to help franchisees run their businesses.

On-The-Job Training
20 hours
Classroom Training
80 hours
Ongoing Support
Newsletter
Meetings & Conventions
Toll-Free Line
Grand Opening
Security & Safety Procedures
Lease Negotiation
Field Operations
Site Selection
Proprietary Software
Franchisee Intranet Platform
Marketing Support
Co-op Advertising
Ad Templates
National Media
Regional Advertising
Social Media
SEO
Website Development
Email Marketing
Loyalty Program/App

Operations

Additional details about running this franchise.

Is absentee ownership allowed?
Yes
Can this franchise be run from home/mobile unit? Information Circle
No
Can this franchise be run part time? Information Circle
No
# of employees required to run
8-12
Are exclusive territories available? Information Circle
No
Take our quick quiz to find your ideal franchise

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Franchise 500 Ranking History

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Disclaimer
The information on this page is not intended as an endorsement or recommendation of any particular franchise or business opportunity by Entrepreneur Media. Our listings and rankings are solely research tools you can use to compare opportunities. Entrepreneur stresses that you should always conduct your own independent investigation before investing in a franchise or business opportunity. That should include reviewing the company's legal documents, consulting with an attorney and an accountant, and talking to former and current franchisees/licensees/dealers.
Updated: December 12th, 2022