How Much Does it Cost to Open a Subway?

Opening a franchise business offers many advantages. You won't have to struggle to establish brand loyalty and recognition, the corporation takes care of all advertising and promotions, and you have a solid foundation at the corporation for assistance. A franchise also has several disadvantages as well, such as zero product and pricing flexibility and you will pay to use the company's name. Of available franchise opportunities, Subway Restaurants offer one of the lowest initial investment requirements.

To Begin

To begin, submit an application to the Subway Restaurant corporation. This is basically a job interview, so include references, work experience and education. Upon acceptance, you will pay a $15,000 franchise fee for using the Subway name.

Total Startup Costs

At Subway's franchise center, you can download a PDF for your region. This document outlines total costs associated with opening and operating a Subway, including the franchise fee, estimated rental and lease costs, leasehold improvements, equipment lease security deposit, security, freight charges, signs, opening inventory, insurance, supplies, training expenses, legal fees, opening advertisement and miscellaneous expenses. There are three cost levels in each category. In the United States, these costs range from $114,800 to $258,300.

When Are Fees Due?

If you open your Subway in a high-cost market, you won't need all $258,300 on the first day. Certain fees are due before your doors open, and others are costs incurred throughout the operating process.

Fees Due as a Lump Sum

The Subway franchise fee, rental and lease costs, equipment lease security deposit, security, freight, signs, inventory, legal fees and your opening advertisement are all costs to be paid in a lump sum. The franchise fee is to be paid upon acceptance into the franchise, while the lease costs are to be paid upon signing the lease. The security deposit has to be paid before ordering your security system and security costs must be paid when ordering your security system. Freight charges are paid when orders are delivered or sent out and signs have to be paid for when ordering. Opening inventory must be paid within a week of opening. Legal fees and opening ads must also be paid before opening your doors. These lump sum fees will run you $48,000 to $108,000.

Fees Due as Incurred

Other fees will be due as time passes, including leasehold improvements, insurance, supplies, training expenses and miscellaneous expenses, such as your business license, utilities, small equipment and surplus equipment. These vary among regions and can cost from $66,800 to $150,300.

In Closing

If you want to start your own business but don't know quite where to begin, franchise opportunities might be for you. Research your company before committing, and make sure you have the time and industry experience to run a successful business.