Subway is a recognizable sandwich chain with over 37,540 locations in over 100 countries. In fact, they are one of the fastest growing franchises in the entire world, and over half of their locations are in the United States.
If you’re the enterprising sort, then you may have wondered at one point or another whether or not Subway owners make a lot of money. The Subway model is franchised, meaning that individual locations are partially owned and operated by independent owners.
How Much Do Subway Owners Make?
Most Subway locations earn an average of $400,000 each year in gross revenue, with profit usually landing somewhere around $41,000. This profit excludes fees and such that are paid by the owner to Subway corporation.
These numbers do not take into account the costs involved in purchasing and starting up your own Subway location, which includes franchise fees and financial requirements that must be met before someone is considered for franchising.
Keep reading to find information on franchising at Subway, as well as details about how much you can expect to pay when purchasing a Subway location.
Is Subway a Franchise?
Subway does in fact follow the franchising model for their business. This means that the actual business owner, or franchisor, allows franchisees that invest in their business the right to operate locations according to a set guideline established by the franchisor.
Sunway is a franchise. Investors that meet certain financial criteria may purchase Subway locations and operate them according to Subway’s established management style.
Franchising is a great way for large businesses to expand their operations while giving franchisees the opportunity to profit from the business as well. However, there are many fees and requirements associated with being a franchisee that might make it less profitable than establishing your own brand.
Read: Is Subway Fast Food?
Is Owning a Subway Franchise Profitable?
Although there are a number of fees and requirements associated with owning a Subway franchise, it can still be profitable depending on how well your store does. The average Subway owner makes about $41,000 each year in profits.
Owning a Subway franchise can be profitable depending on how much food you sell. Although the average profit for Subway locations is only around $41,000 per year, many Subway locations manage to make much more.
The costs associated with purchasing a Subway restaurant include franchise fees, the purchase price for the location, and financial requirements such as a minimum net worth. Many of these costs will vary depending on the location and size of your Subway restaurant.
Read: Does Subway Take Apple Pay?
How Much Does a Subway Franchise Cost?
According to Investopedia, the costs associated with opening a franchise are relatively low. However, conversely, the actual profit margins for franchisees on average is a great deal lower than for other franchises such as McDonald’s.
A Subway Franchise costs between $116,000 and $243,000. These costs include a startup licensing fee, royalty fees (8% of annual gross sales), and an ad fund fee (4.5% of annual gross sales).
In addition to these costs, the Subway franchisee must meet certain financial requirements. These include a minimum net worth of $80,000, with at least $40,000 of liquid capital. More information on the costs of franchising can be found on the Subway website.
Conclusion..
Owning a franchise can be profitable for some people if they are ready to shoulder the initial and ongoing costs of ownership and operation. Subway is not one of the most profitable franchises to own, but they are relatively cheap to start up compared to other franchises.
Costs associated with owning a Subway franchise include startup fees, annual royalties and ad funds, as well as financial requirements such as a minimum net worth. The average annual profits for Subway restaurants is quite low; around $41,000.
If you are interested in owning a Subway location, it is important to do your due diligence and make sure it is a good financial decision before getting started. Running a restaurant is a lot of work, and it might not be worth it for you if you are not working hard to turn a profit.
If you have any questions or concerns, feel free to ask away in the comments section.