It’s not hard to find a Subway franchise. That’s because they’re everywhere.
That’s one of the reasons they’re one of the top fast food franchises people look at buying. That’s right; lots of people look into owning a Subway.
That said, if you want to learn more about Subway franchising, including how to buy a Subway franchise, read this post in its entirety.
That way, you can learn about the initial investment-including the Subway franchise fee, along with the qualifications needed to buy this wildly-popular food franchise.
Subway Franchise: Rumors Of An Imminent Sale?
According to Kate Taylor, retail and food correspondent at Business Insider, rumors are rampant among Subway insiders that Subway may be for sale.
Why is this important?
Because if you’re thinking about buying a Subway franchise…you may want to hold out for a bit. Take a step back and observe.
But if you’re a current Subway franchisee, here’s what you need to do:
Stay and Pray.
I mean it. But don’t worry, I’m not going to get all religious on you.
Why Should Subway Franchise Owners Stay?
Because they have nothing to lose. From Business Insider:
“Subway’s US sales plummeted to $8.3 billion in 2020, down from $10.2 billion in 2019, according to Technomic. The market-research firm’s data indicates that 1,796 Subway locations closed in the US last year, with store count dropping to 22,005 from 23,801.”
Wait! Almost 1,800 Subway locations in the U.S. have closed?
The thing is, most Subway franchisees are well aware of the closings. And they’re also very aware of what John Chidsey, the newest CEO, is doing. Especially if you know his recent history. His history as a hatchet-man. A slasher.
From Business Insider’s Kate Taylor:
Chidsey’s last job before Subway was leading the Miami-based Burger King almost a decade ago, where he slashed costs and ultimately sold the brand to 3G Capital in 2010.
And that’s the reason why the “Subway may be for sale” rumor mill is becoming so active.
The bottom line:
If you own a Subway fast food franchise, stay put. Because whoever buys it will know how to do math.
Translation: monthly royalty checks from 22,000 locations (in the U.S) adds up to a lot of money. And don’t forget that there are thousands of international locations, too.
You’d think that a new owner would want to make things better, right?
Furthermore, I’d be willing to bet that the new CEO would involve franchisees in decision-making…a lot.
To summarize, the potential sale of Subway changes things a lot-for current and future Subway franchisees.
For the better.
If you’re a Subway franchisee, pray for a new owner who “get’s it.” Someone who understands how important you are, and will let you have a big say in how things need to change.
How Much Does It Cost To Buy A Subway?
*According to the Subway franchising website, “Subway restaurant franchises have some of the lowest start-up costs in the industry“, which is one of the reasons a good number of people look into owning a Subway.
Specifically, $100,550-$342,400 in initial fees. I’ll go into the specific initial investment (including the Subway franchise fees) later.
That said, I think you’ll like this step-by-step article on exactly how to open a Subway franchise… which is one of the most popular Quick Service Restaurant (QSR) franchises in the world.
You never know; maybe owning a food franchise like a Subway restaurant, is in your future!
Important: This is a detailed, step-by-step franchising post.
With that in mind, if you’re serious about buying this top food franchise, I encourage you to read it in its entirety. And just so you know, I’ve included lots of useful tips you can use immediately.
Subway Franchises For Sale: This Restaurant Franchise Is Humongous
Do you know how big Subway is?
Check out the information Wikipedia has regarding the size of Subway:
“Subway is one of the fastest-growing food franchises in the world, with 44,882 restaurants in 112 countries and territories as of December 27, 2016. The United States alone has 26,646 outlets. It is the largest single-brand restaurant chain and the largest restaurant operator in the world.”
Equally important is the the brand-which is powerful and recognizable.
As a matter of fact, it comes in at #7 out of 25 for top restaurant brand value (2017) according to Brand Finance. It’s also huge.
As shown below, this fast food brand has a bigger footprint than “other” well-known Quick Service Restaurant brands.
As you can see, this food brand (with almost 45,000 restaurants worldwide) is a sight to behold.
Are you interested in possibly owning one of the top food franchises around? (Or several?)
The “Old” Subway Franchising Opportunity
Check out what I wrote about buying a Subway restaurant franchise a few years ago.
“It used to be ‘pretty easy’ to buy a Subway® franchise, but I’m not sure if it still is. I’m from the school of thought that franchisors should only sell franchises to the best of the best. I would actually like to see less franchises sold, but to higher-quality franchise candidates who could potentially make more profit. Franchisors generally like to see more franchises sold to more people.”
Important: When I got started in franchising, word on the street was that the Subway franchising development team would
award sell “practically anyone” a franchise. Even those with limited financial resources. Now, that may have been true back in the day-I don’t have any concrete facts to back it up, but I believe it. (But not in a conspiracy theory type of way)
So for the purpose of this article, let’s assume that the team tasked with selling these popular QSR franchises these days only awards franchises to people who have the financial resources required for the initial investment, along with the right skills and personal traits to be successful.
With that in mind, let’s dig in.
Buying A Subway Franchise: The Process
The process of buying this business is no different than buying any other franchise business opportunity that’s currently for sale. The purchasing and researching steps are exactly the same.
Wait: scratch that. There is one difference: Subway is a fast food franchise. And a lot of people who are interested in this huge brand have never worked in the fast food industry. Have you?
In other words, the food-service industry is a tough one. The hours are incredibly long, the human resource issues are super-frustrating, and most food franchisees find themselves working in the business, way more than they thought they would.
The Quick Service Restaurant (QSR) Business Is A Tough One
I’m going to assume that you’re not afraid of hard work.
Having said that, it’s important to know that your vision of what your role is going to be as a food franchise owner may not mesh with what it will actually turn out to be. As a result, as much as you’d like to be the person who gets to schmooze your customers during peak traffic times, attend local daytime business networking events, and work on your local marketing efforts-you may not be able to do those things. Are you going to be alright if that happens? Or, will you be a person who wishes she’d never bought a Subway?
“Joel, you are really scaring me. It’s almost like you are trying to talk me out of buying this business…or any food franchises.”
On the contrary-I’m not.
To clarify, I just want you to know what you’re getting yourself into if you choose to go down the QSR ownership route. And since I worked in food service for years…
The bottom line: wouldn’t you like to know as much as humanly possible about Subway-or any food franchise,before you invest $150,000+ into a business you can call your own?
Subway Franchising Cost: How Much Is A Subway Franchise?
As promised, I’m going to share the initial investment costs, as it’s important for you to know how much money it will cost you to open this restaurant in your hometown.
From Their Franchising Website
The initial Subway franchise fee is $15,000. And the total initial franchising investment ranges from $100,550-$342,400.
The reason that there’s such a large cost spread? You have lots of different choices when it comes to the specific type of commercial location you can open your restaurant in, including non-traditional ones. Plus different parts of the country have different costs for real estate space etc.
How Do You Buy A Subway Franchise?
If you want to do this right, the first thing you need to do, is perform a self-check. This involves taking a hard look at yourself-and your past.
For example, how do you feel about rules?
A. Do you believe in them?
B. Have you followed them in the past?
C.Do you follow them now?
The reason I’m asking is because the franchise business model
is a rule-based, highly-structured one. There’s not a lot of wiggle room in how you operate your business.
In the case of Subway, if the operating manual calls for 3 scoops of tuna salad on their famous 6-inch tuna sub, (using the official Subway scooper, of course) that’s how much tuna salad is put on the sandwich. Not 2 scoops. Not 4 scoops. Got it? Do you need another example?
I didn’t think so.
Next: Assuming you’ve determined that you’re a rule-follower, (either on your own, or by taking my free franchise quiz) you can move to the next part of the purchasing process.
One of things you need to do when you’re investigating a specific franchise opportunity is to stay up-to-date on any changes the brand is making. And when it comes to Subway, you always need to check costs, as they may increase.
For instance, did you know that the company has been making a lot of changes in the way they present their products? Did you also know that the store design has been updated?
In fact a lot of things are changing there.
To find out what they are-and more, view this highly-watched Business Insider video.
Your Experience In Restaurants
Have you ever worked in a restaurant?
The reason I’m asking is that if I was charged with awarding franchises for Subway, food-service experience is something I wouldpreferto see on your application.
Notice I wrote the word, “prefer.”
On the whole, I feel it’s advantageous for people interested in owning a restaurant franchise to have food-service experience. The reason: People who have worked in restaurants know how hectic things can get; they also know about (and have experienced) many of the things that can (and do) go wrong during a busy lunch or dinner hour.
Chiefly, that in the food-service business, a bad day is reallya bad day.
On the other hand, if you’ve never worked in a restaurant, but you’ve managed people and things, I wouldn’t turn you away. That’s because all restaurant owners need to be good managers.
Are you a good manager? Are you highly organized? Are you good at keeping track of costs?
If so, keep going.
If not…maybe you shouldn’t be looking into a food franchise.
How To Request Information on Subway Franchises For Sale
This is where things get interesting. And exciting!
First off, go to the Subway franchising website- http://www.subway.com/en-us/ownafranchise
You’ll see a button that says “Register Your Interest.” Go ahead and click it.
This is what you’ll see.
As you can see, the information Subway wants is pretty basic. Their franchising information request form is pretty standard. Notice you’re not asked anything about your financial* capability. Yet. But you will be. As a matter of fact, a Franchise Development Agent WILL follow up with you and explain the process. In addition, the Development Agent will ask you for a net worth statement* when you get asked to fill out the formal franchise application.
*If you haven’t calculated your net worth, now would be a great time to do so. Just use my free net worth calculator.
Are you with me so far?
FYI: This is the point of the franchise investigating/purchasing when most people start freaking out a bit.
“I’m really doing this?”
In this case, there’s something about physically filling out a “Request for information” form that increases one’s blood pressure.
It’s like a “This sh*t is real” button has been pressed and reality rears it’s ugly head.
Attend The Video Seminar
While you’re waiting to hear back from a member of the Franchise Development Team, set aside some time to watch the Video Seminar. You’ll be glad you did.
The recorded online seminar includes a good deal of information about the opportunity, and more. And it’s located on the right-hand side of this webpage. Do it!
Bonus: the franchise development team may take you more seriously than someone who didn’t watch the video. That’s because watching it really prepares you for the franchise purchasing process…the “how-to’s.”
International Franchising Opportunities
Subway franchise opportunities are available all over the globe.
So if you’ve landed on this post from another part of the world-and you’re interested in how to buy a Subway® franchise in your neck of the woods, click one of the links below for franchise fee information and more.
Profits Overseas: Global Subway Quick Service Restaurant Franchise Opportunity Links
Subway Franchise Opportunities Canada
Subway Franchise Opportunities Australia
Subway Franchise Opportunities U.K.
Subway Franchise Opportunities New Zealand
Subway Franchise Opportunities South Africa
Subway Franchise Opportunities Israel
Subway Franchise Opportunities Russia
Subway Franchise Opportunities Pakistan
A Quick Note About This Subway Franchises For Sale Article
I feel that it’s important for you to know that I don’t work for Subway. I don’t do any paid marketing for them either.
With that in mind, the primary reason I wrote this article because there’s always a lot of interest in food franchises like Subway from people who want to be their own boss. I’m providing this information so you can use right away if you want to buy a Subway franchise business. Please know that I’m not promoting Subway as the right franchise for you.
In view of that, if you’re interested in buying this restaurant franchise, use the step-by-step information I’ve provided here as a guide. Ultimately, you’re the person who has to make the yes or no decision on purchasing a Subway franchise business. (Or any business) You have to do the research. And you’re the one who has to determine your ability to pay the franchise fee and finance the venture.
Your First Call
The first call you have with your local Subway franchise representative should be pretty informal. You’ll get to know one another a bit. Your rep will ask you a few questions. You’ll get to ask questions, too.
If you like what you hear on the Subway franchise sales call, (and the rep likes you-and feels you’re qualified for a franchise) you’ll be told what the next steps are and how long they’ll take to complete.
For instance, you may be asked to participate in pre-planned conference calls with existing franchisees.
In addition, you may be asked to get on a few calls with Subway staff members from operations, marketing, IT, customer service, and Real Estate. These calls are great because you get to know what their roles are within the company, along with how they’ll be able to help you now and in the future.
Generally speaking, you should plan on being on your phone a lot during the franchise purchasing process.
Subway Franchises For Sale: Purchasing Steps
The next sentence is important.
Make sure you follow the franchise purchasing steps as they are laid out by Subway to the “T.” Here’s why.
Remember what I said about The Rules-and that the franchise business model is a rule-based one? In this case, The Rules are the specific steps that all prospective Subway franchise owners have to go through.
For example, if your Franchise Development Agent tells you to be on a group conference call with other prospective franchisees next Thursday at 7:00 PM, be there!
Or if your Agent tells you to do a preliminary search for a location, and she expects you to have 3 choices ready to discuss in 2 weeks, you need to have them picked out and ready to discuss about.
What I’m getting at is this: Your Agent will be watching you. She wants to make sure you can and will follow the steps as they’re laid out.
The way I see it is if you’re serious about the opportunity…serious as in you’re willing to write a check for the Subway franchise fee, and get a small business loan for the rest of the initial investment, (as long as you like what you see) you’ll happily do what’s being asked of you.
If you’re “kind of” interested in the franchise, you’ll do the minimum-or you’ll do things you’re own way.
Subway Franchise Research
Researching this franchising opportunity is all on you.
With that in mind, I have a question: Do you know how to do franchise research?
If so, go ahead and start your research!
If you don’t know how, I suggest that you go here for the best tips on researching franchises.
Great News About Researching This Restaurant Franchise!
Subway is an easy franchise opportunity to research. That’s because there are so many franchises around-so many franchisees* to talk with, including at least a few restaurants in your own local area.
*Talking to existing Subway franchisees is the best way to get the facts you need about the Subway franchise opportunity, how their businesses are run, and how much money they’re making.
How Much Can You Make?
Just so you know, I’m often asked questions regarding Subway franchise profit. People want to know how much money they can make owning a Subway franchise. But not because they’re necessarily interested in owning a Subway.
On the contrary, the main reason people ask me about potential earnings of a Subway franchise has to do with its popularity. And because of that, it’s easy for people to visualize themselves owning a Subway franchise. There are so many of them-and they’re usually busy!
That’s why, whenever I tell someone I’m involved in franchising, one or more of the following questions are usually asked of me;
- “So, do you work with Subway franchises?”
- “What do you think of Subway, Joel?”
- “Can I make money with one of these franchises?”
- “Why are there so many Subway franchises around?”
I suppose you’d like to see my answers now, right?
Subway Franchise Profit: How Much Can You Make?
1. I don’t do any work with Subway. I’ve never brokered a deal with a Subway franchise, and I’ve never been paid to help them with franchise marketing. (But, I’d gladly accept payment from them, if they wanted some marketing assistance!)
2. This is a tough one. What do I think of Subway? MMMMM Well, for one, I was in the food business, and I have absolutely no desire whatsoever to own a food franchise. That’s just me. Now, if you ask me what I think about the operation…
Subway has over 35,000 restaurants open in 95 different countries. I don’t. They may know a little more about growing a franchise empire than say, me. Now, inside the industry, they’re respected, based on their numbers, but that may be about as far as it goes. I’m not really sure how well they do their franchisee selection. In other words, I don’t really know if they consistently sell their franchises to the most-qualified candidates, or if they just like to see lots of franchises sold.
Subway Franchise Update: Franchisees Are NOT Happy About This Sandwich
It used to be pretty “easy” to buy a Subway franchise. I’m not sure if it still is. I’m from the school of thought that franchisors should only sell franchises to the best of the best. I would actually like to see less franchises sold, but to higher-quality franchise candidates-who could potentially make more profit. Franchisors generally like to see more franchises sold to more people.
Subway is a very successful operation. They are usually right on top in almost every franchise rankings list.
Now, back to my answers…
3. Why do you want to know how much you can make as the owner of a Subway franchise? (Like it matters.) Kidding. One way to find out is to see how many Subway® franchisees own more than one Subway store. (Lots.) Another way is to ask. Carefully.
Here’s exactly how to ask the “How much can I make?” owning a Subway franchise question. If you use the technique I just showed you (you have to click that link above to learn the technique), the Subway franchisees you talk with will tell you how much they’re making.
4. As I stated up above,there are over 40,000+ Subway® franchises worldwide. That’s an amazing number. How does Subway continue to add new franchises to the mix?
In a word; branding. The Subway® franchise name is recognized worldwide. Subway has been around for over 40+ years. That’s how. And Subway franchises are usually busy places. That’s because Subway spends oodles on marketing and advertising.
Actually, the Subway company doesn’t pay allthe advertising fees out of their own pocket.
From the Subway website, as of 2-8-2011;
SUBWAY Franchisees pay 12.5% every week (gross sales minus the sales tax); 8% goes toward the franchise royalties and 4.5% goes towards advertising.”
Subway is super-popular, and as a company, they’re super-successful.
Just do great research before you buy one. My top franchise research techniques along with the top questions to ask Subway franchise owners can be found in my powerful franchise research guide.
A Word of Warning
Do not call and/or visit Subway franchises in your neighborhood early on in your research. The franchisees you approach may feel that you’re going to be
encroaching trespassing on their territory.
(You’re probably not going to encroach on their territory-but lots of franchisees get paranoid about too many Subway franchises for sale-and being sold, in one area.)
Instead, when you do your research calls with franchisees, crack open your FDD* and contact franchisees randomly-from other parts of the country. And make sure you call at least a dozen of them.
After you talk to a lot of franchisees (who aren’t in your area) by phone, you can pay a visit to a franchisee in your (general) area. I suggest visiting one who owns a franchise at least 5 or more miles away from where you’re thinking of opening one.
You Want To Be Taken Seriously
The other reason I don’t suggest calling or visiting franchisees in your local area too early in the process is because you’ll sound like a total newbie. Your questions will be very basic-which may lead to franchisees not taking you very seriously-and not talking to you for very long.
But you will be taken seriously after you talk with a dozen or so franchisees from other areas of the county (before you visit your local Subway restaurant), because you’ll have a better understanding of the business-and with it, much better questions to ask. Make sense?
Next: The FDD
*The FDD, short for Franchise Disclosure Document, features hundreds of pages of sometimes complicated legalese, initial investment numbers-and more, along with (here’s the good part) contact information for every living, breathing franchisee of the franchise opportunity you’re investigating. You can call as many franchisees as you want! The franchisees will give you lots of information. Lots of good information-if you know how to ask for it.
Existing Subway Franchises For Sale
As you’re looking into this opportunity, it’s almost guaranteed that you’ll hear about existing Subway franchises for sale-maybe even in your own neighborhood. If you do, they’re worth checking out.
The reason Subway franchises for sale are worth checking out has to do with cash flow.
For example, a Subway that’s already up and running has existing customers and revenue. Buying an existing Subway means you’ll have cash flow from day one. You’ll have a business that’s already doing business. Good stuff!
In the event you’re interested in learning more about existing Subways for sale, check out the Subway franchise website. There’s an entire section devoted to Subway franchises for sale. All you have to do is type in the area of the country you’re interested in. You can also go to a website like this and perform a search for Subway franchises for sale.
Buying A Subway Franchise: Your Next Step
If your research has gone well, and you’ve been able to find more happy, successful Subway franchisees than unhappy, struggling ones, here’s what you need to do next.
Write your business plan. (Yikes!)
But don’t worry if you’ve never written a formal business plan. You just need a template (included with most business planning software) along with easy-to-follow instructions. You can find business plan templates for sandwich shops here.
Business Planning Software
And speaking of software, my friend, Tim Berry, co-created the top-selling business planning software in the world. Here’s what he says about the importance of writing a business plan.
The business plan, done right, breaks the uncertainty into manageable pieces.
- It sets the most important elements of strategy, including business offering, target market, and differentiators.
- It sets the most important tactics for execution, and matches them to strategic focus.
- It sets up and defines the important steps for the future.
- It defines the key assumptions and resulting projections for sales, direct costs, operating expenses, and cash flow.
Finally, it’s a great tool for moving forward, figuring out what’s important, managing the important flow of tasks responsibilities, and money, and then—on a regular basis—checking results with review and revision.
Why A Business Plan Is A Must
These days, business plans are a must. You’ll definitely need to have one when you apply for a small business plan. Notice I wrote “need.”
In other words, business plans are not “optional” these days.
Bonus:A business plan is not just a one-time thing. You can even use it after you’re in business. It will help you stay on top of your financial metrics. Big time.
Please take the time to put together a business plan for your franchise. You’ll come out a winner!
Your Small Business Loan
The next step in the purchasing process is the money step. In particular, obtaining financing for your franchise business.
Important: in spite of the fact that I don’t have any evidence to back it up, my guy tells me that it shouldn’t be too difficult to obtain a small business loan for a Subway franchise. Part of the reason, in my opinion, is because of the brand.
To demonstrate what I mean, try to imagine a scenario in which a loan officer (who specializes in small business loans) has never heard of Subway. Can you do it? My point exactly. However…
With that in mind, there’s still no guarantee that your loan for a Subway franchise business will be approved. That’s because every situation…every loan-and every borrower is different.
For example, no one has the exact same credit score/credit ranking. And no one has the same net worth/liquid capital.
In addition, different parts of the country have different commercial space pricing, and different costs of living etc.
In summary, when it comes to franchise financing, there’s really not a one-size-fits-all solution. That’s why it’s important to work with an experienced, credible lender.
The U.S. Small Business Administration is a powerful ally of small business. They’re also an important economic driver because of the power they have as guarantors of some small business loans.
That’s right. As I explain in this post, the SBA doesn’t loan money; they guarantee loans that lenders make. (In some situations)
In other words, when someone suggests that you get a SBA loan, your loan isn’t coming directly from the SBA. Your loan is backed (up to a certain percentage) by the SBA.
For more information on SBA loans-and there are a few types, go to SBA.gov.
(Disclosure: I write monthly articles on franchising for the SBA blog-and have been for 7+ years)
Once you’ve completed the steps I’ve laid out, it’s decision time.
But before you say yes or no to buying a Subway franchise, you need to hire an experienced franchise attorney. Why?
Because a competent franchise attorney will protect your interests. She’ll also negotiate* on your behalf.
Contrary to what you may have heard about franchise agreements, there maybe things in your agreement that are negotiable.
In addition, even if nothing can be negotiated on your behalf, you need to know that today’s franchise agreements are complex legal documents. It’s crucial you understand what yours states.
The first thing to remember is that your franchise agreement lays out exactly what your obligations are as a franchisee, and what your rights are.
Your agreement also states what the franchisors obligations are…how they’ll support you.
Another thing: In addition to going over your franchise agreement (and the FDD, of course), your attorney should be able to help you with your commercial lease once you secure a location. (Which is another complicated document!)
Facts Concerning Commercial Leases
Here are two important things (facts) you need to know about commercial leases, courtesy of Nolo.com.
- Many commercial leases are not based on a standard form or agreement; each commercial lease is customized to the landlord’s needs. As a result, you need to carefully examine every commercial lease agreement offered to you.
- You cannot easily break or change a commercial lease. It is a legally binding contract, and a good deal of money is usually at stake.
Hire an attorney. You’ll sleep better at night knowing you’re protected.
June 6th, 2021- Subway may now require franchisees to keep their doors open even during a snowstorm, electrical outage or terrorist attack. Read more
What do you think?
Signing Your Subway Franchising Deal
If everything looks good, you’ll sign the franchise agreement, and send in your check for the franchise fee along with whatever else Subway initially requires upfront. Once that’s done, you’re officially a Subway franchise! Congratulations!
Next, your training classes will be scheduled.
Then the location of your franchise business will be finalized. (Subway has a real estate department you’ll work with.)
You Are in Business
You’ve done it. You are now the proud owner of a Subway restaurant.
All in all, the entire process, from start to finish, took around 7 months. Hopefully it went fast.
In conclusion, you now know how to buy a Subway franchise. I laid out the steps on to buy this popular quick service restaurant business one by one.
The bottom line: If you feel that owning a Subway restaurant is right for you, do
good great research, snag a high-traffic location, and go, go, go! (Obtain the services of business professionals, too!)
To that end, who knows: Maybe you’ll end up owning several Subway franchises.
Subway restaurant image by Andrevruas (Own work) [CC BY 3.0 (http://creativecommons.org/licenses/by/3.0) or GFDL (http://www.gnu.org/copyleft/fdl.html)], via Wikimedia
Additional Subway Franchises For Sale Questions On Investment Costs And More
You need to contact headquarters and fill out their online franchising information form. A Franchise Development Agent will follow up with you and explain the process.
The total upfront investment for a Subway franchise in the U.S. ranges from $116,000 to $263,000.
The Site Selection team will show you how to find locations. Once you find one, your Franchise Development Agent will make a recommendation to headquarters on whether or not the site should be approved.
It’s up to you, the Subway franchisee, to hire a local contractor to build out your store. Once you’ve hired one, the Store Design team will provide blueprints for the contractor to follow.