The Great Expense Of A Subway Franchise Cost
Take A Long Hard Think About Your Subway Franchise Cost
There were quite a few lesser known facts found within the classic book FAST FOOD NATION and one of the more interesting items pointed out would be the total figure on a Subway franchise cost. In short, the Subway costs for a franchise are among the most expensive of all the franchises in the fast food industry. Among the reasons for this would be the fact that the Subway corporation takes a huge percentage of your monthly gross.
This may seem to be truly shocking information to many because most will look at the long lines in a local Subway shop and wonder how profits are not earned. Again, the issue here is the enormous franchise costs associated with acquiring a Subway agreement. This can cut deeply into any profit potential. When profits are very slim success can only be procured via volume. What happens when the volume of customers is limited? Earning potential declines and may decline greatly. Consider that another drawback associated with this particular franchise.
Based on statistical data, the costs to open a Subway Franchise will range between
$108,000 and $300,000. Subway generally prefers you pay half of your cost in cash while the remaining half can be borrowed from a lending institution.
Please be aware that this initial cost of opening a Subway franchise may only cover the first three months. After that, the ability to break even will be based on the cash flow that comes into the restaurant. Obviously, the profits of the venture will need to cover all the initial costs which were incurred at the startup period.
After this initial 90 day period has ended, you will be required to cover the monthly fees that have to be paid to the corporation. The cost is 8% a month. That is a tremendous fee to cover. Many Subway franchise owners will consider such high fees a drain on their profits but there is no other way around this.
Of course, Subway does have to make money. If it did not then it would file for bankruptcy and no one would be able to make money via Subway. However, the costs with Subway are so significant that it might be much better to look towards another major franchise corporation for opportunities. The key word here is opportunity because unless you are able to gain a solid return on your investment you will not find this franchise very beneficial to partner with.
A Subway restaurant is also incredibly difficult to operate. It requires an enormous amount of work to keep such a store afloat and even those that are highly motivated will discover such operations are incredibly draining. This does not set the stage for gaining a great deal of job satisfaction which is reduced even further when you examine all the costs involved.
Yes, there have been many that have made huge sums from running a Subway franchise. Yet, not all people have experienced tremendous success which is why it may be better to look elsewhere for opportunity. Subway franchise cost issues just may be too much to overcome.