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.