Food & Beverage

Subway Franchise

Name: Subway Franchise
Brand: Subway

The world's largest submarine-sandwich quick-service chain by unit count, built on a low initial-fee, made-to-order sandwich model. Founded by Fred DeLuca in 1965 and majority-acquired by Roark Capital Management in an April 2024 transaction; franchisor Doctor's Associates LLC also sells Subway master franchise rights outside the U.S. The U.S. system has been shrinking every year shown here, losing a net 1,803 franchised restaurants across 2023-2025 as the chain works through a multi-year store-closure and remodel push.

Losing locationsFounded 1965HQ: Shelton, CT

Every franchisor has to file a document called an FDD before they can legally sell you a franchise. Buried in it are the two things a sales rep won't volunteer: what you'll actually spend to open, and whether existing locations are opening or closing. That's what's below, pulled straight from Subway's own filing.

What it costs to open

From the filing's investment breakdown -- not a "starting at" number a sales rep quoted you.

Franchise fee

$15,000

Total to open

$263,000–$630,000

Ongoing royalty

8% of gross sales

What you'd actually spend, over time

The upfront cost is only part of it. Plug in what you expect a location to bring in, and see the real total once royalties over a few years are added on top.

Your estimated annual revenue

Defaulted to a rough food & beverage industry average, not a figure from Subway's own FDD -- change it to your own estimate.

Years of ownership

Total cost of ownership over 5 years

$663,000 – $1,030,000

Startup investment

$263,000–$630,000

Royalty per year (8%)

$80,000

Total royalty, 5yr

$400,000

When would you break even?

Revenue alone doesn't tell you this -- it depends on what's left after rent, labor, and everything else. Subway's FDD doesn't disclose a reliable profit figure (most franchisors don't), so this starts from a typical food & beverage profit margin (~8%) and applies it to the revenue you entered above -- adjust the percentage to your own realistic estimate.

Estimated profit margin (% of revenue)

%≈ $80,000/year

Defaulted to a general food & beverage industry benchmark, not a figure from Subway's own filing -- this is a starting point to adjust, not a promise about what franchisees actually make.

At that profit, you'd break even in about

3.3–7.9 years

Weigh that payback period against what you already know: Subway is currently losing locations. A long payback period on a shrinking brand is a very different bet than the same payback period on a growing one.

Is Subway actually growing?

Franchisors have to report, every year, how many locations opened, closed, or changed hands. Most franchise sites never show you this. Here it is:

Locations opened vs. closed, by year

Shrinking

From Item 20 of Subway's FDD, the section franchisors use to disclose real openings and closings.

-443

-631

-729

202320242025

Year	Franchised units, start	Franchised units, end	Net change
2023	20,576	20,133	-443
2024	20,133	19,502	-631
2025	19,502	18,773	-729

Most recent year (2025): lost 729 franchised units, ending the year at 18,773 total.

What you're actually signing up for

The cost and growth numbers above are only part of the picture. These three FDD items are the ones a prospective franchisee tends to weigh most heavily once they're past the sticker price.

Training & ongoing support (Item 11)

Support and services (training, marketing, and other Item 11 obligations) are delivered on Subway's behalf by contracted Managers under a Management Agreement, though Doctor's Associates remains ultimately responsible for them; initial training is required before opening, at times and locations Subway designates.

Territory protection (Item 12)

You will not receive an exclusive territory, any territorial rights, or any radius/population restriction limiting where Subway can license or open another restaurant (absent contrary state law). Subway and its affiliates retain unlimited rights to compete with you, including through other distribution channels such as a call center, internet sales, or catalog/telemarketing sales.

Renewal & termination terms (Item 17)

The Franchise Agreement term is 20 years. Subway may terminate if it does not approve your location within 6 months of signing. Successor/renewal terms and fees vary by which Franchise Agreement Rider part applies to your restaurant (standard, school-lunch, or satellite formats each have their own term and extension rules).

How Subway compares to other Food & Beverage franchises

Across the 28 food & beverage franchises we've hand-verified so far, the typical range to open runs $837,269–$2,125,953, with royalties averaging around 5.7% of gross sales (based on the 25 of them that charge a flat %-of-revenue royalty).

Dave's Hot Chicken

$617,800–$2,170,000 · 6% royalty

Slim Chickens

$1,188,900–$4,944,000 · 5% royalty

Ziggi's Coffee

$315,830–$2,093,361 · 6% royalty

Crumbl

$848,566–$1,472,533 · 8% royalty

Little Caesars

$376,500–$1,769,200 · 6% royalty

Jamba

$480,850–$941,300 · 6% royalty

Tropical Smoothie Cafe

$300,000–$720,500 · 6% royalty

Playa Bowls

$188,675–$636,458 · 6% royalty

Kona Ice

$114,730–$228,601 · non-%-of-revenue royalty

Firehouse Subs

$166,671–$950,351 · 6% royalty

Wingstop

$310,400–$1,048,500 · 6% royalty

Jersey Mike's Subs

$436,176–$1,162,228 · 6.5% royalty

Dunkin'

$532,400–$1,832,500 · 5.9% royalty

Popeyes Louisiana Kitchen

$1,222,045–$3,923,245 · 5% royalty

Del Taco

$1,461,200–$3,313,500 · 5% royalty

Blaze Pizza

$757,000–$1,297,100 · 5% royalty

Church's Texas Chicken

$1,202,400–$1,886,300 · 5% royalty

MOD Pizza

$924,732–$1,220,633 · 5% royalty

Twin Peaks

$2,959,000–$5,734,000 · 5% royalty

McDonald's

$1,470,500–$2,642,000 · 5% royalty

Taco Bell

$1,859,750–$4,312,200 · 5.5% royalty

Domino's Pizza

$231,450–$743,500 · 5.5% royalty

KFC

$2,107,575–$4,155,000 · 5% royalty

Burger King

$2,039,200–$4,730,600 · 4.5% royalty

Chick-fil-A

$317,521–$3,463,155 · non-%-of-revenue royalty

Penn Station

$507,500–$858,750 · non-%-of-revenue royalty

Nekter Juice Bar

$243,155–$647,160 · 6% royalty

Keep going

Subway and Nekter Juice Bar are both food & beverage franchises; Nekter Juice Bar's total investment starts about $19,845 lower than Subway's. Nekter Juice Bar Franchise
Subway and Domino's Pizza are both food & beverage franchises; Domino's Pizza's total investment starts about $31,550 lower than Subway's. Domino's Pizza Franchise

Where this came from: Subway only files a Net Worth/Experience Exemption notice, not a full FDD, with California DFPI, so this entry is sourced from Minnesota's CARDS registry instead: Clean FDD issued April 30, 2026 (MN File No. 10792, filed 4/30/2026, effective in Minnesota 7/22/2026). Item 5: standard initial franchise fee is $15,000 for a first restaurant (reduced to $7,500 for qualifying additional/veteran/affiliate/non-traditional franchisees). Item 6: royalty is 8% of total Gross Sales plus a separate 4.5% advertising fee, both payable weekly -- one of the higher combined continuing-fee loads in this dataset. Item 7: $263,000-$630,000 TOTAL for a traditional (non-Satellite/non-non-traditional) location. Item 20 Table 1 shows 0 company-owned restaurants in the U.S. across all three years -- Subway's entire U.S. system is franchised. You can pull the same filing yourself from the California DFPI's public franchise search. Filed 2026-07-22. None of this is investment advice -- get the franchisor's current FDD and talk to a real attorney or accountant before you sign anything.

If you see a different unit count elsewhere: franchisors only have to refile their FDD annually, so the numbers here can run 6–18 months behind a franchisor's own real-time marketing claims -- which often aren't independently verified, and sometimes count signed-but-not-yet-open locations. A gap isn't necessarily an error on either side; it's two different snapshots in time from two different sources.