Your investment – financial information
The SUBWAY® chain’s start-up costs are exceptionally low for a franchise of the size and stature and franchisees can often purchase dependable outlet equipment through the SUBWAY® chain’s purchasing power. In fact, in some cases, traditional SUBWAY® outlets can be opened for as little as c. £100,000.
The total initial investment will depend on many factors including location, rent, outlet size and equipment. The franchise agreement is for 20 years and renewable for 20 years (subject to terms and conditions).
An important consideration in purchasing your first SUBWAY® outlet is how to finance your investment. A good arrangement is to have 50% of the total capital requirements available in cash and sufficient collateral to obtain funding for the balance. Below are links to lenders that can offer support.
Royalties and fees paid to the SUBWAY® chain are based on gross sales minus sales tax. The royalties are 8% to the SUBWAY® chain. A 4.5% advertising fee is paid to the 'International Franchisee Advertising Fund (iFAF)'. Franchisees in some markets may vote to increase the marketing fee percentage for local advertising purposes.
The franchise fee of €10,000* for outlets is one of the lowest on the market, despite the size of the chain.
One reason the costs are so low is that SUBWAY® outlets feature a very simple operation. No cooking is involved so franchisees don’t have to invest large sums in expensive grills and fryers. Also, the décor package is streamlined so that money isn’t wasted on non-recoverable assets.
* See SUBWAY® Capital Requirements in the
Franchise Sales Brochure »
Useful links to financial lenders
Natwest »
RBS »
Lombard »
HSBC »
Lloyds TSB »
Bank of Scotland »
General breakdowns for: |
POUNDS* |
Lower cost |
Moderate cost |
Higher cost |
When due |
Initial Franchise Fee*
|
£9,400 |
£9,400
|
£9,400 |
upon signing Franchise Agreement |
Real property** |
£2,500 |
£8,000
|
£16,000 |
upon signing Intent to Sublease |
Leasehold improvements |
£18,500 |
£32,000 |
£50,000 |
pro rata during construction |
Equipment |
£20,000 |
£30,500 |
£45,500 |
when you place the order |
Security system (not including monitoring costs) |
£1,000 |
£2,500
|
£3,500
|
before order placed |
Freight charges (varies by location) |
£2,000 |
£2,500
|
£3,500
|
when you place the order or on delivery |
Outside signs |
£1,500 |
£2,500 |
£4,500 |
when you place the order |
Opening inventory |
£2,500 |
£3,000
|
£4,500 |
within 1 week of opening |
Insurance |
£1,000 |
£1,500 |
£1,500
|
before opening |
Supplies |
£1,000 |
£1,500
|
£2,000
|
before opening |
Training expenses (including travel and lodging) |
£2,000 |
£3,500
|
£4,500 |
during training |
Legal and accounting |
£500 |
£1,500 |
£2,500
|
before opening |
Opening advertising |
£1,500 |
£2,500
|
£4,000 |
around opening
|
Miscellaneous expenses (business licenses, utility
deposits, small equipment and surplus capital) |
£1,500 |
£4,000
|
£6,500 |
as required |
Additional funds - three months |
£6,000 |
£12,000 |
£16,500
|
as required |
Estimated total investment |
£70,900 |
£116,900 |
£174,400 |
|
** This amount is the estimate deposit of two month’s rent payable upon signing the Intent to Sublease
* Based on Euro exchange rate on 27 January 2009 (Initial Franchise Fee €10,000)
THESE FIGURES ARE ESTIMATES OF THE COMPLETE INVESTMENT IN SETTING UP A SUBWAY RESTAURANT AND OPERATING IT FOR 3 MONTHS. IT IS POSSIBLE TO EXCEED COSTS IN ANY OF THE AREAS LISTED ABOVE.
Some costs will vary in relation to the physical size of the restaurant. A lower cost restaurant is one that would require fewer leasehold improvements, less seating and fewer equipment expenditures. Moderate and higher cost restaurants may require extensive interior renovations, extensive seating and additional equipment. If you are purchasing a franchise for another location opportunity, such as a non-traditional, satellite or school lunch program location, the above listed capital requirements may vary and could be substantially lower depending upon the necessary equipment you must acquire or changes in leasehold improvements you must make. The above figures do not include extensive exterior renovations.