Instant Alert: Here's what it costs to open a Subway restaurant

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Here's what it costs to open a Subway restaurant

by Hayley Peterson on Sep 27, 2015, 11:19 AM

Subway is one of the cheapest major fast-food restaurants to franchise.

To open one restaurant, the company requires that potential franchisees have liquid assets of at least $30,000 and a net worth of $80,000 to $310,000, according to Entrepreneur.

By comparison, McDonald's requires its franchisees to have at least $750,000 in liquid assets.

Subway franchisees need less money because the sandwich chain's restaurants are cheaper to open.

Subway's startup costs, which include construction and equipment leasing expenses, range from $116,200 to $262,850, according to the company.

Opening a McDonald's restaurant requires as much as $2.3 million in startup costs alone, by comparison.

But Subway restaurants generate less revenue than McDonald's units.

A Subway restaurant, on average, generates $490,000 in sales annually, compared to $2.5 million in average annual revenue for McDonald's restaurants, according to QSR magazine.

Subway also charges its franchisees hefty fees.

The company charges an ongoing royalty fee equal to 8% of gross sales, as well as an advertising fee equal to 4.5% of gross sales. That means 12.5% of each restaurant's revenues go to Subway corporate.

Here's a breakdown of startup costs, from the company:

Subway