Starting a Subway Franchise Business

Interested in small restaurant franchise business ideas? If YES, here is how to open a subway with no experience. How much does it cost to start up?

How to Start a Subway Franchise Business – Requirements, Startup Cost and Profit

Do you what it takes to start a Subway sandwich shop? How much does a Subway owner make a year? Subway is a leading eatery name in the food industry that has been franchising for many years. Though they reached the peak of success in the food business in record time, Subway continues to have increased demand and is expanding faster than ever before.

If you are an entrepreneur with a good eye for lucrative business and a desire to play in the food industry, owning a franchise with Subway is the best thing to do.

This article serves as a guide to buying and running a Subway franchise, so read further with rapt attention to know and understand the company and their system of doing business and see how well you can fit in.

You should know about the organization you want to start business with, so let me introduce the company before I go into the business model of Subway franchise.

About Subway Franchise

It all started in the year 1965 when a young man went to a family friend to solicite for college funds. The founder of Subway, Fred DeLuca got the money he asked for, but his benefactor, Dr. Peter Buck, gave him $1,000 on the condition that he opens a sandwich shop.

This led to the birth of Subway, as both men became business partners, but the name was not always Subway, it started as Pete’s Super Submarines, a name which was replaced by Subway in the year 1974.

The first shop was opened in Bridgeport, Connecticut and about nine years after the first opening, they had managed to open 16 other branches all over the state of Connecticut. This progress looked slow to the founders and they decided to start offering franchising opportunities to boost the expansion of the business.

Since the first franchising unit was opened in Wallingford in the year 1974, Subway started to experience a rapid expansion and as at 2013, this business was opening more than 50 new franchising units every week!

With a global recognition as a nutritious substitute to the traditional fast foods we have around, Subway continues to feed customers with the improvement of their health in mind.

A Subway menu contains breakfast, salads, all sandwiches, guest subs, kids pack, side drinks and extras. There is also Platters available for all kinds of occasions with any size of crowd.

Currently, there are over 44,000 Subway franchises scattered all over 111 different countries in the world.

What you Should know about Subway Franchise

These are the vital things you need to know about Subway franchise;

  • First of all, you do not need any previous experience with business ownership to start a franchise with Subway, but good leadership skills and business management is an added advantage.
  • Even if this is a food business, you don’t need to be a cook because Subway manual clearly states that there is no cooking or use of grills.
  • Being a Subway franchisee means you will pay an ongoing royalty fee of 8% and an Ad royalty fee of 4.5%.
  • You are allowed to have absentee ownership.
  • You will need eight to twelve employees to run your Subway franchise.
  • You can build your own restaurant by using your own contractor or letting Subway recommend one for you.
  • You can choose to sell your restaurant any time you feel like, the company just has to approve the buyer.
  • You will have proper training and support before you launch your business and even after you start, there will be periodic trainings for you and your staff.
  • Lending services are available for you in case you need them.
  • Subway deos not explicitly publish any earning claims for their franchisees. You can refer to the Franchise Disclosure Document (FDD) for more information.

Starting your Subway Franchising Business

How much does it cost to own a subway? To start your Subway franchise;

  • You must have a net worth ranging from the sum of $80,000 to $310,000 along with other financial requirements.
  • You will need a liquid cash ranging from the sum of $30,000 to $90,000.
  • You will make an initial investment of $147,050.

These are the steps to acquiring and running your Subway business;

How do I become a subway franchisee?

  1. Attend the free seminar organized by the company and meet Subway representatives.
  2. Fill the franchise application form on this website https://subapps1.subway.com/AdditionalInfoApp/index.aspx
  3. You will pay a franchise fee of $15,000. It is a one time payment which will give you the right to use Subway trademark and brand name anywhere in the world.
  4. Sign the Subway franchise terms of agreement and renewal which seals your 20 years contract that can be renewed on expiration with the company.
  5. Attend the two weeks Subway training course where they groom you and your staff on basic management skills and Subway system of doing business.
  6. Secure a location for your business. Subway will will provide a list of approved locations to you during your qualifying process.
  7. Purchase food for your restaurant by ordering from a Subway approved vendor.
  8. Launch your business

Subway is headquartered in 325 Sub Wy. Milford, CT 06461 and the present Chief Executive Officer is Suzanne Greco.

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