Investors have business ideas, but there are various factors to consider when finding the best strategic location for starting a new business. People have considered Subway as a good franchise to invest in, as it draws a lot of regular business; hence, there is an increased market. Reading this article will help you understand the basics requirements and also the costs and factors to consider when starting a Subway franchise.
What Is a Subway Franchise?
In our society, a Subway franchise is among the top growing businesses. A Subway franchise is a business that sells sandwiches, often known for its foot-long sub deals. There will be a wide range of market with no dead stock, and the costs for starting a subway franchise are relatively low.
Most Subway franchises are privately owned and thus, easily managed. There are traditional locations and non-traditional locations.
Average Costs for Starting a Subway Franchise
The charges for the startup fee range between $105,800 and $393,600. The franchise fee is $15,000. McDonald's is among the prominent franchise businesses in the United States; hence, it’s the best option for comparison of costs. It charges a much higher franchise fee of about $45,000 and a startup fee of $2.2 million.
Subway Franchise Cost Breakdown
To join investors with Subway franchises, it’s essential to consider high individual costs. It involves the franchise fee of $15,000. The startup costs vary based on the construction, as well as the equipment purchased on leasing expenses. According to research, the startup can be up to $393,600, inclusive of the building and equipment.
Subway franchises have royalty fees around 8% of the total sales. Advertising costs are equal to approximately 5% of the total sales. The Subway corporation therefore takes about 13% of your franchise revenue.
Factors Affecting the Cost of Starting a Subway Franchise
Some of the factors that will go into the cost of starting your own Subway franchise include
- Number of employees you pay - About 8 to 12 employees are needed when starting a Subway Franchise, and their salaries are based on the work they give to the customers. The skills and qualifications of the employees vary. If an employee has more experience, you will need to pay them a commensurate rate.
- Type of equipment - When leasing equipment, the startup costs can be relatively low as compared to when you purchase, but when you have enough profit, it’s essential to consider a permanent purchase.
- Location - The location of the franchise also determines the costs, including rent price variation and business ownership taxes.
Additional Costs Associated with Starting a Subway Franchise
The liquid cash of about $30,000 is a requirement. It’s essential to have savings to meet all the cost expectations. You must also have savings to account for downfalls in the economy, slow startup business, and unexpected issues that come with running businesses, like store damages, employee injuries, and more.
Conclusion
The Subway franchise is among the cheapest modes of investing, since the startup costs are relatively low. The sales are more, and when you start a Subway franchise, for instance, a restaurant in a year might yield thousands in profit. Starting a Subway Franchise is straightforward; hence, it's recommendable. This article explains the costs involved, which are the most significant factors to take into consideration when starting any business.
