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Here's what it costs to open a Subway restaurant

Hayley Peterson   

Here's what it costs to open a Subway restaurant
Retail2 min read

Subway is one of the cheapest major fast food restaurants to franchise.

To open one restaurant, the company requires that potential franchisees have liquid assets of at least $30,000 and a net worth of $80,000 to $310,000, according to Entrepreneur.

By comparison, McDonald's requires its franchisees to have at least $750,000 in liquid assets and a minimum net worth of $700,000.

Subway franchisees need less money because the sandwich chain's restaurants are cheaper to open.

Subway's startup costs, which include construction and equipment leasing expenses, range from $116,200 to $262,850, according to the company.

Opening a McDonald's restaurant requires as much as $2.3 million in startup costs alone, by comparison.

But Subway restaurants generate less revenue than McDonald's units.

The average Subway restaurant generates $490,000 in sales annually, compared to $2.5 million in average annual revenue for McDonald's restaurants, according to QSR magazine.

Subway also charges its franchisees some hefty 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. That means 12.5% of each restaurant's revenues go to Subway corporate.

Here's a breakdown of startup costs from the company:

Subway

Subway


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