Overall costs for Subway run anywhere from $98,850 to $337,400. See how the costs break down and what funding options might be right for your new venture into the franchise foray.
How COVID-19 affects franchising costs
Strict sanitation and employee protection measures during the coronavirus outbreak add to the typical costs you face when opening a new franchise. Paired with the unusually heavy amount of promotions that may be required by the franchise, you may not see as much in the way of profits starting out. For more information on what support is out there, read our guide to
loans for businesses affected by the coronavirus.
Estimated initial costs
Our cost estimates are accurate as of 2019 from
https://www.franchisedirect.com and include opening fees and expenses only. Your location may result in higher or lower fees.
Franchise fees
Subway franchise fees total around $15,000, which beats out the $37,000 average for the 200 largest franchises nationwide.
| Initial franchise fee |
$15,000 to $15,000 |
| Royalty |
8% of total gross sales. |
| Estimated total |
$15,000 to $15,000 |
Equipment fees
Equipment fees total $27,800 for Subway. This is less than the $180,023 average for the top 200 franchises.
| Equipment lease security deposit |
$7,500 to $15,500 |
| Optional security system |
$2,450 to $3,550 |
| Freight charges, varies by location |
$3,000 to $14,000 |
| Outside signage |
$1,600 to $8,000 |
| Estimated total |
$14,550 to $41,050 |
Real estate fees
Real estate will set you back $127,450 for Subway, thought it's less than the average of $788,376 for the top 200 franchises.
| Real property |
$2,000 to $12,000 |
| Leasehold improvements |
$40,900 to $200,000 |
| Estimated total |
$42,900 to $212,000 |
Training fees
Subway initial training costs total $3,500, which comes in under the nationwide average of $9,788.
| Training expenses, including travel and lodging |
$2,500 to $4,500 |
| Estimated total |
$2,500 to $4,500 |
Inventory costs
Initial inventory for Subway shakes out to $6,125. This is less than the nationwide average of $53,119.
| Opening inventory |
$4,400 to $6,050 |
| Supplies |
$500 to $1,300 |
| Estimated total |
$4,900 to $7,350 |
Marketing costs
Advertisement and marketing costs total up to $3,000 for Subway, beating out the nationwide average of $9,938.
| Opening advertising |
$2,000 to $4,000 |
| Advertising |
4.5% of total gross sales. |
| Local advertising |
Established by franchisees. |
| Grand opening advertising |
$2,000 |
| Estimated total |
$2,000 to $4,000 |
Administrative fees
Subway administrative fees total up to $2,250 — which comes in under the overall nationwide average of $6,761.
| Legal and accounting |
$1,000 to $3,500 |
| Audit |
Overdue amount. |
| Estimated total |
$1,000 to $3,500 |
Other expenses
Miscellaneous expenses for Subway total $33,000 — less than the nationwide average of $69,970.
| Miscellaneous expenses, including business license, utility deposits and small equipment |
$4,000 to $8,000 |
| Three months' additional funds |
$12,000 to $42,000 |
| Additional funds |
Established by franchisees. |
| Estimated total |
$16,000 to $50,000 |
All costs were found using the 200 largest franchises nationwide using Franchise Direct's list of more than 300 franchises, and are accurate as of 2019.
How to finance
The best way to finance Subway comes down to your personal financial situation. What assets you have available will largely determine how much you need to borrow, and which option suits you best. Potential solutions include:
- Bank loan. Your personal credit plays a large role in getting a business term loan from a bank. Typically this type of funding is for larger amounts.
- Online loan. Credit requirements may be more flexible for an online loan than a bank loan, but amounts may max out at a lower amount — typically around $1 million.
- SBA loan. The good part about SBA loans is that they top out at $5 million, but your business has to meet a number of requirements.
- Credit card. Small costs that aren't fixed, such as stray inventory and supply purchases, may be better off on a business credit card. Just make sure you can pay it off quickly to avoid high APRs.
Also check if Subway franchise financing is available. You may be able to get some of the costs covered for less than you would with other traditional funding options.
Compare small business lenders
How Subway stacks up
Compare how Subway holds up against two similarly sized franchises.
| Average Franchise fees |
$500,000 |
$15,000 |
$22,500 |
| Average Equipment fees |
$1,375 |
$27,800 |
$937,500 |
| Average Real estate fees |
NA |
$127,450 |
NA |
| Average Training fees |
$4,500 |
$3,500 |
NA |
| Average Inventory fees |
$49,800 |
$6,125 |
$22,500 |
| Average Marketing fees |
NA |
$3,000 |
NA |
| Average Licenses and permits fees |
$9,000 |
NA |
NA |
| Average Insurance fees |
NA |
NA |
NA |
| Average Admin fees |
NA |
$2,250 |
NA |
| Average Personnel fees |
NA |
NA |
NA |
| Average Other fees |
$31,000 |
$33,000 |
$51,500 |
Bottom line
Subway franchise costs run a total of $218,125. Before you decide to become a franchisee, compare the total costs against industry averages. And to learn more about financing
read our guide to franchise financing.
