Naturally, many of your questions will revolve around Subway franchise costs.
So we’ve compiled this in-depth guide to Subway franchise costs in the UK to help with your planning and budgeting.
One of the first questions we always get from aspiring Subway franchise owners is ‘How much does it cost to start a Subway franchise?’ Well, as you can imagine, Subway restaurant franchise costs vary from location to location. But we’ve detailed all the common initial, ongoing and miscellaneous Subway franchise costs to give you a better idea.
As with any new business, there are some initial set-up costs involved with launching your new Subway franchise.
When it comes to setting up your business, you’ll need to budget for a range of upfront Subway franchise costs, including your Subway franchise fee, liquid assets, property costs, equipment and supplies, and training costs.
The first Subway franchise cost you’ll need to factor into your budget is the franchise fee. The fee for all new franchise agreements in the UK and Ireland is currently £13,000. As with everything we do, we’ve tried to keep our Subway franchise fee extremely competitive to make owning your Subway franchise as accessible as possible.
As part of your funding proposal, you’ll be required to demonstrate a reasonable amount of liquidity to cover your initial capital outlay and ongoing Subway franchise costs. As a rule of thumb, we would expect prospective Subway franchise owners to be able to demonstrate a net worth of £150k and £100k of liquid assets.
Of course, one of the biggest Subway franchise costs will be your property. Whether that be acquiring an existing Subway franchise restaurant as part of an approved sale or by developing your new restaurant location (either from the ground up or through the conversion of an existing property), purchase and build-out fees will apply.
Another major Subway franchise cost will be your equipment and supplies. Therefore, you’ll need to set aside some budget to purchase your equipment and ongoing supplies. Thankfully, we’ve made this process straightforward, thanks to our partnership with the independent non-profit making organisation, IPC Europe.
All new Subway franchise partners take part in a three-week franchise partner training programme, two weeks of which are completed as intensive training in a regional, certified training restaurant. Our London training centre and University of SUBWAY e-learning system also provide comprehensive training opportunities.
Once you’ve passed all our due diligence checks, secured your Subway franchise, and invested in a Fresh Forward new design and training for your employees, there are some ongoing Subway franchise costs worth bearing in mind.
These are the everyday running costs of a Subway franchise that help keep your business ticking along.
As with any franchise model, the main ongoing Subway franchise cost is your royalty fees. All Subway franchise owners are required to pay an 8% fee on their net turnover. Your investment gives you access to one of the world’s most successful and well-established franchise models, not to mention an instantly recognisable global brand.
As well as your ongoing royalty fees, Subway franchise owners are also obliged to contribute 4.5% of their net turnover towards advertising and marketing costs. Remember, that you have the full might and support of our world-beating in-house advertising and marketing campaigns to help entice your customers over the threshold.
We’re passionate about our people at Subway, they’re our most important assets – bar none. Our incredible Sandwich Artists, store managers and hygiene teams are the heart and soul of our business. So it stands to reason that a fair proportion of your Subway franchise costs will go towards remunerating your exceptional workforce.
You’ll need to invest in business insurance to cover you for all eventualities. Some of the main types of insurance to consider include public liability insurance, employers’ liability insurance, and buildings and contents insurance. You may also benefit from stock insurance, business interruption insurance and business legal protection insurance.
Working capital is the difference between your Subway franchise’s current assets and liabilities. It’s an excellent gauge for the operational efficiency and short-term financial health of your Subway franchise. It’s important to maintain a positive working capital to ensure you can fund your present operations and any future growth.
Sometimes life (and business!) throws you a curve ball. But that doesn’t mean you can’t prepare for the unexpected.
With that in mind, it’s a good idea to set aside funds to pay for various miscellaneous expenses that can often form part of your overall Subway franchise costs. Here are just a few examples to factor into your budget.
As a Subway franchise owner, and business owner in general, you never know when you may need some legal expertise. Whether it be to close the purchase of a Subway franchise location, oversee contractual matters, or settle a dispute, legal fees are an unavoidable expense. We recommend keeping some budget aside, just in case.
Running a successful business like a Subway franchise takes a certain degree of financial acumen. But you’re likely to need the support of a professional accountant to help with the financial aspects of running your business, such as submitting your annual accounts and VAT returns correctly and paying your Corporation Tax on time.
Sometimes it can pay to enlist the services of third-party professionals in certain situations. For instance, you might choose to work with a recruiter to fill any vacancies or a tax adviser to make your enterprise more tax-efficient. Either way, you’ll want to set aside some budget to cover these sorts of miscellaneous Subway franchise costs.
The total investment for a Subway franchise starts at around £150,000. However, subway franchise costs can vary greatly depending on size and location requirements. As a general rule of thumb, it’s worth bearing in mind that most of the cost of a Subway franchise goes towards the purchase of equipment and building conversion work.
Some Subway franchise costs are non-negotiable. For instance your franchise fee, royalty fee and marketing fees are all binding elements of your Subway franchise agreement. However, many of the Subway franchise costs listed in this guide will have a degree of flexibility and will be subject to your own discretion and negotiation skills.
The purchase price for an existing Subway franchise is agreed between the seller and buyer. It can vary greatly depending on various parameters and Subway has no influence on the agreed purchase price. Although, we will need to approve the transfer. Deals are available for experienced Multi-Unit Owners (MUOs) who are interested in expanding their portfolio. If you’re interested in finding an existing site that’s available for sale, please contact us.
Yes, certain areas and locations are definitely more expensive than others. For instance, a Subway franchise in London will inevitably cost more to buy and build out. However, our incredible site team is here to support you to find the best possible Subway franchise location(s) for your budget expectations and long-term goals.
The sheer scale of the Subway Franchise system gives you incredible advantages when sourcing furniture, fixtures, and equipment. With the overarching stability, support and buying power of our global Subway franchise network, we can provide attractive Subway franchise packages that are extremely competitive compared to other brands.
