Here's what it costs to open a Subway restaurant

Subway on FacebookSubway charges a franchise fee of $US15,000.
  • 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.

Opening a McDonald’s restaurant requires as much as $US2.2 million in startup costs alone, by comparison, and the company charges a $US45,000 franchise fee.

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:

Subway franchise costsSubway

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