Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
  • CruiseOne
  • Firehouse Subs
  • Jimmy John's
  • Massage Envy
  • Menchie's
  • Orange Leaf Frozen Yogurt
  • Planet Fitness
  • The UPS Store
  • Yogurt Land
  • And Hundreds More...

No, thanks. I'm not interested in uncovering the actual earnings of hundreds of franchises at this time.

Franchise Costs 2013: Detailed Estimates of Subway Franchise Costs (2013 FDD)

by Franchise Chatter on May 12, 2013

in Franchise Costs, Sub Sandwich Franchise



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Detailed Estimates of Subway Franchise Costs Based on Item 7 (Estimated Initial Investment) of Subway’s 2013 Franchise Disclosure Document

  • All figures in Item 7 are estimates only. Actual costs will vary for each franchisee and each location.
  • Subway is in the process of testing certain locations that conform to special dietary preferences. Subway is also testing certain locations that offer delivery. Certain non-traditional locations and locations operating within Walmart stores may participate in a co-branded arrangement with Auntie Anne’s stores. If you are participating in one of these test locations, there may be additional costs and your initial investment costs may be higher.
  • A lower cost restaurant is one that will require fewer leasehold improvements, less seating, and fewer equipment purchases. Moderate and higher cost restaurants may require extensive interior renovations, extensive seating, and additional equipment.

1.  Subway Sandwich Photo by Fred @ SGInitial Franchise Fee

  • Lower Amount:  $15,000
  • Mid Amount:  $15,000
  • Higher Amount:  $15,000

2.  Real Property Costs

  • Lower Amount:  $2,000
  • Mid Amount:  $5,000
  • Higher Amount:  $12,000
  • Subway estimates this amount to be the deposit of 2 months’ rent payable when you sign the Intent to Sublease. This represents a security deposit of one month’s rent and payment of one month’s rent.
  • The typical restaurant measures approximately 1,200 square feet, but some restaurants are as small as 300 square feet and others as large as 2,000 square feet.

3.  Leasehold Improvement Costs

  • Lower Amount:  $59,500
  • Mid Amount:  $102,100
  • Higher Amount:  $134,500
  • Your local law may require use of a grease trap in your restaurant. This may increase your leasehold improvement costs between $8,000 and $12,000 depending upon the location of the grease trap.
  • In limited circumstances, the landlord for the restaurant premises may require that you upgrade the decor of your restaurant in order to lease the premises. This upgrade may increase your leasehold improvement costs by approximately $10,000.
  • The Subway Metro Decor is required for all Subway Cafe restaurants. The Subway Metro Decor is also available as an optional decor upgrade for all new and existing restaurants, including relocations. Subway estimates the total cost of the decor to be an additional $10,500.
  • This cost estimate assumes you will also lease the POS system for your restaurant under Subway’s equipment leasing program.

For a non-traditional location

  • Lower Amount:  $29,900
  • Mid Amount:  $44,750
  • Higher Amount:  $77,000

4.  Equipment Lease Security Deposit

  • Lower Amount:  $4,500
  • Mid Amount:  $6,500
  • Higher Amount:  $7,500
  • Lease payments are due monthly over 60 months.
  • You have the option to purchase all the equipment outright, including the right to finance the purchase with a lender of your choice.
  • If you choose to purchase your equipment, you should substitute $55,000 to $91,000, including a 10% buffer, as the cost of the equipment package, instead of the security deposit.
  • The amount of additional funds for your three months’ operating expenses would also be adjusted to reflect that you will not have to pay three monthly equipment lease payments.

5.  Optional Security System Costs (not including monitoring)

  • Lower Amount:  $2,000
  • Mid Amount:  $3,500
  • Higher Amount:  $6,000

6.  Freight Charges (varies by location)

  • Lower Amount:  $3,300
  • Mid Amount:  $4,000
  • Higher Amount:  $5,500

For a non-traditional location

  • Lower Amount:  $2,800
  • Mid Amount:  $3,500
  • Higher Amount:  $3,800

7.  Outside Signage Costs

  • Lower Amount:  $2,000
  • Mid Amount:  $4,000
  • Higher Amount:  $8,000

For a non-traditional location

  • Lower Amount:  $1,600
  • Mid Amount:  $4,000
  • Higher Amount:  $8,000

8.  Opening Inventory Costs

  • Lower Amount:  $4,400
  • Mid Amount:  $5,225
  • Higher Amount:  $6,050

9.  Insurance Costs

  • Lower Amount:  $1,000
  • Mid Amount:  $1,500
  • Higher Amount:  $5,000
  • You must purchase the insurance that Subway specifies, which presently includes statutory Workers’ compensation in the minimum amount required by law, and comprehensive liability insurance, including products liability and completed operations coverage in the minimum amount of $2,000,000 per occurrence/$4,000,000 general aggregate.
  • You must also purchase business vehicle coverage, including owned vehicle liability and hired and non-owned vehicle liability insurance, in the amount of $1,000,000.

10.  Supplies

  • Lower Amount:  $500
  • Mid Amount:  $900
  • Higher Amount:  $1,300

11.  Training Expenses (including travel and lodging)

  • Lower Amount:  $2,500
  • Mid Amount:  $3,500
  • Higher Amount:  $4,500
  • You do not pay Subway a training fee but you will be responsible for all personal expenses for the training.

12.  Legal and Accounting Costs

  • Lower Amount:  $1,000
  • Mid Amount:  $2,000
  • Higher Amount:  $3,500

13.  Opening Advertising Costs

  • Lower Amount:  $2,500
  • Mid Amount:  $3,250
  • Higher Amount:  $4,000
  • All new, transferred, and relocated restaurants must hold a grand opening sale.

14.  Miscellaneous Expenses (business licenses, utility deposits, and small equipment)

  • Lower Amount:  $4,000
  • Mid Amount:  $6,000
  • Higher Amount:  $8,000
  • You must pay the cost of all permits, licenses, registrations, certifications, or other consents required for leasing, constructing, or operating your restaurant.
  • In addition to these expenses, your municipality may assess impact fees on your Subway restaurant location. Impact fees are charged by your municipality against new development projects, such as your restaurant, in an attempt to recover the costs incurred by the municipality in providing the public facilities required to serve the new development. Subway estimates these fees to be between $5,000 and $25,000.

15.  Additional Funds

  • Lower Amount:  $12,000
  • Mid Amount:  $26,000
  • Higher Amount:  $42,000
  • This is an estimate only of the range of initial startup expenses for three months. These expenses assume you lease your equipment from Subway, and include payroll costs but do not include royalty, advertising fees, or food costs, or any allowance for an owner’s draw.

16.  Total Costs

  • Lower Amount:  $116,200
  • Mid Amount:  $188,475
  • Higher Amount:  $262,850

For a non-traditional location

  • Lower Amount:  $85,700
  • Mid Amount:  $130,625
  • Higher Amount:  $202,150

Costs to Add Additional Menu Items Under the Subway Plus Program, Subway Cafe Program, or Marketwide Option Program

If you offer additional menu items under the Subway Plus Program, Subway Cafe Program, or under the Marketwide or Region Option Programs, you will have additional costs.

Soup

1.  Leasehold Improvement Costs (includes any outside signs):  $0

2.  Equipment Costs (purchase not lease):  $0 (Equipment for the soup program is optional.)

3.  Freight Charges:  $50

4.  Opening Inventory Costs:  $200

5.  Supplies:  $100

6.  Opening Advertising Costs (optional):  $2,000

7.  Miscellaneous Expenses:  $100

8.  Additional Funds – 3 Months (including incremental labor):  $100

9.  Total:  $2,550

Omelet

1.  Leasehold Improvement Costs (includes any outside signs):  $200

2.  Equipment Costs (purchase not lease):  $1,400

3.  Freight Charges:  $200

4.  Opening Inventory Costs:  $200

5.  Supplies:  $100

6.  Opening Advertising Costs (optional):  $2,000

7.  Miscellaneous Expenses:  $100

8.  Additional Funds – 3 Months (including incremental labor):  $1,000

9.  Total:  $5,200

Personal Pizza

1.  Leasehold Improvement Costs (includes any outside signs):  $200

2.  Equipment Costs (purchase not lease):  $0

3.  Freight Charges:  $0

4.  Opening Inventory Costs:  $200

5.  Supplies:  $100

6.  Opening Advertising Costs (optional):  $2,000

7.  Miscellaneous Expenses:  $100

8.  Additional Funds – 3 Months (including incremental labor):  $1,000

9.  Total:  $4,000

 Subway Cafe

1.  Leasehold Improvement Costs (includes any outside signs):  $200

2.  Equipment Costs (purchase not lease):  $22,106

3.  Freight Charges:  $500

4.  Opening Inventory Costs:  $2,500

5.  Supplies:  $100

6.  Opening Advertising Costs (optional):  $2,000

7.  Miscellaneous Expenses:  $100

8.  Additional Funds – 3 Months (including incremental labor):  $1,000

9.  Total:  $28,506

Continuing Fees

1.  Royalty Fee:  8% of total gross sales, payable weekly

2.  Advertising Fee:  4.5% of total gross sales, payable weekly

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