Here's what it costs to open a Subway restaurant

pulse

April 20, 2018 4:47 PM

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

The company charges a $15,000 franchise fee and startup costs range from $105,800 to $393,600.
By comparison,

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

Subway's fee for becoming a franchisee is $15,000 and startup costs, which include construction and equipment leasing expenses, range from $105,800 to $393,600, according to the company.

Opening a McDonald's restaurant requires as much as $2.2 million in startup costs alone, by comparison, and the company charges a $45,000 franchise fee.

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

A Subway restaurant, on average, generates $422,000 in sales annually, compared to $2.6 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:

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