- Subway is one of the cheapest restaurants to franchise.
- The company charges a $US15,000 franchise fee and startup costs range from $US105,800 to $US393,600.
- By comparison, McDonald’s charges a franchise fee of $US45,000 and startup expenses can cost up to $US2.2 million.
Subway is one of the cheapest major fast-food restaurants to franchise.
Subway’s fee for becoming a franchisee is $US15,000 and startup costs, which include construction and equipment leasing expenses, range from $US105,800 to $US393,600, according to the company.
But Subway restaurants generate less revenue than McDonald’s units.
A Subway restaurant, on average, generates $US422,000 in sales annually, compared to $US2.6 million in average annual revenue for McDonald’s restaurants, according to QSR magazine.
Subway also charges its franchisees hefty ongoing fees.
The company charges an ongoing royalty fee equal to 8% of gross sales, as well as an advertising fee equal to 4.5% of gross sales, according to Franchise Direct. That means 12.5% of each restaurant’s revenues go to Subway corporate.
Here’s a breakdown of startup costs, from the company:
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