Subway Franchise Costs, Fees & FDD

Year Business Began: 1965

Franchising Since: 1974

Headquarters: Shelton, Connecticut

Estimated Number of Units: 36,455

Franchise Description: The franchisor is Doctor Associates LLC. The franchisor offers qualified purchasers the right to establish and operate, from a single location, a retail establishment preparing and selling foot-long, six-inch, flat bread, and specialty sandwiches, salads, wraps, and other food items.
Training Overview: Franchisees or their designated manager, and any other employees the franchisor requires pursuant to the operations manual, must successfully complete the Franchisee Training Program to the franchisor’s satisfaction. In order to successfully complete the training program, franchisees or their designated manager must have: (i) 100% participation in all components; (ii) an 80% final grade on all pre-requisite web-based training courses and the in-restaurant component of the course; and (iii) an 80% average on all assessments. Classroom work accounts for approximately 15 hours, and franchisees will have approximately 60 hours of on-the-job training at nearby restaurants. Franchisees will also have from two to three hours of homework per evening. The full franchisee experience is a combination of virtual training, access through the franchisor’s University of Subway platform, in restaurant training and classroom coaching. Franchisees will be notified when additional courses become required.

Territory Granted: Franchisees will not receive an exclusive territory. The franchise entitles franchisees to operate only at and from one location they select and the franchisor approves. Franchisees will not receive any territorial rights and there are no radius restrictions or minimum or maximum population requirements which limit where the franchisor can license or open another Subway restaurant, unless otherwise provided under applicable state law.

Obligations and Restrictions: The restaurant shall at all times be under the franchisee’s direct, on-premises supervision or that of a trained and competent employee acting as full-time manager. Franchisees must operate the restaurant in strict compliance with all required methods, procedures, policies, standards, and specifications of the Subway system in the operations manual and in other writings issued by the franchisor.

Term of Agreement and Renewal: The length of the franchise term is 20 years, except for satellite restaurants and the school lunch program. Franchisees will have the right to renew for an additional 20-year term provided that they meet certain criteria. If franchisees are in full compliance, they may renew the school lunch program for five years. For satellite restaurants, the franchise will automatically renew in line with the Base Restaurant Franchise Agreement term. The franchisor has the right to refuse renewal if franchisees are not in full compliance.

Financial Assistance: If franchisees enter into a sublease or sublicense for the restaurant premises, the franchisor’s designated affiliate will enter into the master lease or license with the landlord. Under the sublease or sublicense, the costs and obligations of the master lease or license between the franchisor’s affiliate and the landlord, are passed onto the franchisee, and the franchisor may earn a profit by charging the franchisee an amount in excess of these costs. The franchisor may lend money to franchisees in connection with a Subway restaurant. The terms and purposes of these loans are negotiable and the franchisee will sign a promissory note and security agreement. In addition, the franchisor has arranged for a leasing program with certain designated suppliers and lenders for bread ovens and speed ovens to be used in the restaurant. The franchisor may change or eliminate these loan programs without any prior notice to franchisees.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee	$15,000	$15,000
Real Property	$2,000	$12,000
Leasehold Improvements	$40,900	$200,000
Equipment, Furniture and Décor	$106,785	$208,845
Optional Security System (not including monitoring)	$2,450	$3,550
Freight Charges (varies by location)	$3,000	$14,000
Outside Signage	$1,600	$8,000
Opening Inventory	$4,400	$6,050
Insurance	$1,000	$6,000
Supplies	$500	$1,300
Training Expenses (including travel & lodging)	$2,500	$4,500
Legal and Accounting	$1,000	$3,500
Grand Opening Advertising	$2,000	$4,000
Miscellaneous Expenses (business licenses, utility deposits & small equipment)	$4,000	$8,000
Additional Funds – three months	$12,000	$42,000
ESTIMATED TOTAL	$199,135	$536,745

Other Fees

Type of Fee	Amount
Royalty	8% of total gross sales.
Advertising	4.5% of total gross sales.
Audit	Overdue amount.
Fees for Unpaid Balances (when payment is more than one week late)	Interest charge of 12% (or maximum rate allowed by law where the restaurant is located) per annum on amount owed by the franchisee.
Fees for Unpaid Balances (when payment is more than one week late)	Late fee of 10% or (or maximum rate allowed by law where the restaurant is located) per annum of amount owed by franchisee may be charged.
Fees for Unpaid Balances (when the franchisee defaults on payments because of a bank change without notice)	$50
Fees for Unpaid Balances (bounced check or pre-authorized draft)	$20
Fees for Unpaid Balances (When Subway or its affiliate incurs the expense)	Costs of collection, including lawyers' fees.
Renewal Fee	25% of the then-current franchise fee (currently $3,750) for a standard renewal; 25% of the then-current satellite franchise fee (currently $1,250) for a satellite renewal; $1,000 for a short-term satellite renewal.
Transfer	50% of the then-current franchise fee (currently, $7,500), plus $3,000 for any satellite.
Location Rent/ License Fee	$1,000 - $6,000 per month, estimated.
Equipment Purchase and Freight Charges	Cost of equipment plus buffer to cover freight charges, taxes, and other costs.
Insurance	$1,000 - $6,000 per year.
Indemnification	All liability, damages and costs, including lawyers' fees, incurred.
Non-compete Violation	$15,000 for each competing store plus 8% of its gross sales.
Confidentiality Violation	The franchisor’s damages.
Trademark Violation	$250 per day.
Limited Time Offering and Auto Shipment	Costs vary, depending on the product to be shipped.
Dispute Resolution	Half of arbitration fee, except franchisee will pay the whole fee plus costs, including lawyers' fees, management preparation time, and travel expenses if he/she withholds money from the franchisor or an affiliate. If the franchisee breaches the provisions of the Franchise Agreement regarding mandatory arbitration, or restrictions on damages or against whom he/she can arbitrate, or the proper forum for an action, the franchisee will pay Subway’s expenses and the expenses of anyone named improperly, including lawyers' fees; the franchisee will be liable for abuse of process.
Co-Brand Continuing Fee	0% - 8% of total gross sales of a co-brand concept.
Fees Charged by Co-Brand Franchisor	Fees and rates set by third party co-brand franchisor.
Optional Restaurant Listing Service	$100 for each 90 day period.
Restaurant Technology Fees	$75 per month, subject to future increases.
Required Payment Options	Varies. These fees apply to all credit and debit card purchases made by guests from the restaurant.
Subway Card Fees	- Initial fee of approximately $60 to $140. - Redemption Fee equal to 2.5% of each transaction amount that applies when Subway Card is redeemed. - Additional Subway Card supply costs $0.10 per card, $0.06 per envelope and $20 per display. - SVS issued/configured terminal fee of $320 (for certain non-traditional locations only).
SVS Monthly Maintenance Fee	$2.50 monthly.
Subway MVP Rewards Program	1.9%, subject to any annual adjustments, of the gross sales, for each transaction made by a Subway MVP Rewards program member at the restaurant.
POS System Hardware-as-a-Service Fees	Approximately $57 per month.
Digital Menu Board Hardware-as-a-Service Fee	$155 per month.
Digital Menu Board CapEx Option	CapEx charges are as follows: For a 4-Screen Indoor Digital Menu Board: $8,200 per restaurant. For a 3-Screen Indoor Digital Menu Board: $7,650 per restaurant. For a 2-Screen Indoor Digital Menu Board: $7,150 per restaurant. In all cases: $39 per month.
Kount Fraud Protection Fee	Currently, $0.0068 per digital transaction, subject to increase if vendor price increases.
Other Technology and Digital Initiatives	Varies as the franchisor implements various new technology and digital initiatives. Usually paid to a third party.
Remodels	See FDD.
Taxes and Other Fees	Varies by state.
ServSafe Certification	$50 every two years.
Training Fee and Costs	No training fee for two persons; $7,500 for any additional persons trained. Franchisees must pay all costs for any of their restaurant employees or managers to complete certain required online training courses.
Catering	None; unless franchisees participate in the online catering program powered by ezCater in which case a commission, equal to approximately 5% for ezOrdering or 13% for ezCater Marketplace, of each catering order will be charged plus approximately 2.75% of each catering order will be allocated toward credit card processing.
Restaurant Excellence Visits Revisit Fee	$140.69 per revisit, subject to increase by 3% per year.
Legacy Support Fee	$200 per month of noncompliance.

The above information has been compiled from the FDD of Subway. Year of FDD: 2025.
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