Subway Franchise

Subway, a Doctor's Associates franchise, has been franchising since 1974 - 9 years after the concept was founded in 1965 , currently with 36,969 total locations in the food & beverage sector, headquartered in CT. The 2024 FDD lists a total initial investment between $117K and $263K, roughly a 126% gap between the low and high end once site size, local market, and buildout scope are factored in. That total bundles the franchise fee of $15K together with equipment, leasehold buildout, and the working capital needed to get through ramp-up.

Royalty payments here are set at 8.0% of gross sales; add the 4.5% advertising-fund contribution and the combined ongoing draw reaches 12.5% of gross sales. Subway does provide Item 19 financial performance data -- a voluntary disclosure that most U.S. franchisors (roughly two-thirds) skip. The reported average gross revenue per location is $422K, meaning the typical unit pays roughly $34K per year in royalty alone. Treat revenue and profit as separate questions: rent, labor, cost of goods, and local demand all determine what a franchisee actually keeps.

Network momentum is currently negative: Subway contracted by 3.8% year-over-year with 2200 closures on the record. Do not treat contraction as automatically disqualifying, but do dig in: saturation, thin unit profitability, disputes with the franchisor, and planned pruning all produce the same headline number. Item 20 contacts can tell you which one this is.