Here's what it costs to open a Subway restaurant

  • Subway is one of the cheapest restaurants to franchise.
  • The company charges a $15,000 franchise fee and startup costs range from $105,800 to $393,600.
  • By comparison, McDonald's charges a franchise fee of $45,000 and startup expenses can cost up to $2.2 million.

Subway is one of the cheapest major fast-food restaurants to franchise.

Subway's fee for becoming a franchisee is $15,000 and startup costs, which include construction and equipment leasing expenses, range from $105,800 to $393,600, according to the company

Opening a McDonald's restaurant requires as much as $2.2 million in startup costs alone, by comparison, and the company charges a $45,000 franchise fee. 

RELATED: Check out some shocking Subway employee secrets:

6 PHOTOS
Subway employee secrets
See Gallery
Subway employee secrets

Photo credit: Reddit

Photo credit: Reddit
Photo credit: Reddit
Photo credit: Reddit
Photo credit: Reddit

Photo credit: Reddit

HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

 

But Subway restaurants generate less revenue than McDonald's units.

A Subway restaurant, on average, generates $422,000 in sales annually, compared to $2.6 million in average annual revenue for McDonald's restaurants, according to QSR magazine.

Subway also charges its franchisees hefty ongoing fees.

The company charges an ongoing royalty fee equal to 8% of gross sales, as well as an advertising fee equal to 4.5% of gross sales, according to Franchise Direct. That means 12.5% of each restaurant's revenues go to Subway corporate.

Here's a breakdown of startup costs, from the company:

Subway franchise costsSubway

NOW WATCH: Subway made 2 mistakes that are destroying its business

More from Business Insider: 
Department-store chain Bon-Ton is going out of business — here's the list of the 212 stores that will close 
Bed Bath & Beyond's stores have been slammed as 'devoid of inspiration' and 'a mess' — here's what it's like to shop there 
Starbucks is closing all locations for 'racial-bias education' — and it is going to cost the company millions of dollars

SEE ALSO: Here's what it costs to open a McDonald's restaurant

Read Full Story

Can't get enough personal finance tips?

Sign up for Finance Report by AOL and get everything from consumer news to money tricks delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.