Q:

Is it profitable to own a Subway franchise?

A:

Quick Answer

Subway stores brought in an average of $445,000 in annual sales in 2010, notes Franchise Marketing Systems, and the annual profit per store was about $56,925. The franchise fee was $12,500 in 2010, with an initial investment of approximately $213,000. The initial total investment in the store ranges from $116,600 to $263,150, notes Entrepreneur.

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Full Answer

As of 2014, owners pay a franchise fee of $15,000 and pay 8 percent royalties to the corporation, says Entrepreneur. Financial requirements for owners include a net worth of $80,000 to $310,000, plus $30,000 to $90,000 of liquid cash available on hand. Business people usually need eight to 12 employees to run a single store, and absentee ownership is allowed. Every Subway store is owned by an owner/operator as opposed to the corporate office.

Subway has 26,617 franchised stores in the United States, as of data from 2014, according to Entrepreneur. The term of a franchise agreement lasts 20 years. The company gives discounts for owners who open a store on military or government property. Operators get half off the franchise fee if they receive government funding for financing. Subway has approximately 3,117 stores in Canada, with about 12,493 stores in other countries across the world.

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