SUBWAY Franchise Startup Cost, Revenue and Profit Margin
Subway Franchise is the largest global fast-food chain that offers some exciting prospects for those seeking to partner as a franchisee. This has seemed to be the destination of choice for all who desire healthy meals, which are affordable and qualitative. Interestingly its motto is “Eat Fresh”.
The following are historical shots of the Subway fast-food chain of restaurant franchises:
Do you know how much franchising a Subway cost? As a startup entrepreneur, it is most of the time advisable to tap into a franchise than starting up your own business, especially if you want to go into the food or restaurant business.
When you buy into a franchise, you are presented with the opportunity to get the license to established business and then have uninterrupted access to their business procedures and processes. One of the businesses you can delve into is the Subway Franchise. Now the question is how much is a Subway Franchise?
In this article, we will be taking an in-depth look into the Subway franchise, its history, the procedure of getting a Franchise with the company and the cost of starting a Subway Franchise.
HISTORY OF THE SUBWAY
Subway can be considered to be a well-established licensor of its numerous franchise stores. They have very high popularity in the franchise business and are known to have one of the lowest franchise costs across the United States.
The Subway Franchise opened its first restaurant in the year 1965 and was founded by Fred DeLuca. He was born in the year 1947 in New York and thereafter moved to Connecticut where he spent most of his childhood.
When he was 17 years old, he requested a $1000 loan from a family friend, Dr. Peter Buck to open a sandwich shop. He gave the shop the name Pete’s Super Submarines. In the year 1974, it changed the name to become Subway and had 16 different store units opened across the state of Connecticut.
THE SUBWAY FRANCHISE
In the same year 1974, Subway opened its first franchise store in Wallingford, Connecticut and since then the concept has continued to grow. As at the year 2013, Subway was launching at least 50 new restaurants every week.
They have been able to build a strong strategic concept round their sandwiches and the overall fast-food experience. The exponential growth the company enjoyed has allowed it to grow to about 43,000 stores open in about 100 countries across the world as of the year 2016.
HOW TO BUY A SUBWAY FRANCHISE
Subway offers qualified franchisees the license to establish and run a retail franchise business using their brands and concepts. This can be operated from a single location selling foot-long and special sandwiches and salads.
If you want to buy a Subway Franchise, you will be expected to complete an application form on the internet or you could request one from their development office. You will be offered a Franchise Disclosure Form.
You will then be expected to take a basic skills test. If you can pass this after the assessment, you will then be allowed to investigate into the Subway Business Opportunity with the assistance of a local development officer. The development office and the Doctor’s Associates Inc, which is the parent company of the Subway Franchise will then be the ones to determine if you can meet up with the standards required to get a Subway Franchise.
COST OF A SUBWAY FRANCHISE
Before applying for the Subway Franchise opportunity, one thing you will need to bear in mind is the cost of the Subway Franchise and then decides if you have the financial capacity to embark on the financial implications of getting/buying a Subway Franchise.
One of the major selling points that Subway enjoys is the low-cost offering of its franchise. The first step that is expected of the franchisee for Subway is to identify a store and then pay the initial cost. The initial cost will include the real estate value and also construction expenses of the identified store. This is estimated to be between the range of $120,000 to $270,000 and when you compared this with other fast-food franchises, it is extremely lower.
The initial startup fee of a Subway Franchise is $15,000. You will also be expected to make an annual royalty fee of 8% of the annual gross sales. And you will also need to make provisions for an Advertisement fee of about 4.5% of the total gross sales.
HOW MUCH DOES A SUBWAY FRANCHISE MAKE?
As an entrepreneur, you might want to feed yourself with the information on the profit margin for any business you want to go into. If you have decided to become a Subway Franchisee and would want to know how much a Subway Franchise makes in a year.
You should be aware that the company is quite profitable due to its reputation as being one of the foremost franchises with the best fast-food sandwich in the industry.
With the rate at which the Subway Franchise is ranked and the level of mind-blowing services they render to their customers, you as a franchisee should expect a very high return from your investment into the brand.
Annually, it is reported that a typical Subway restaurant averages total sales of approximately $500,000.