Subway is a well known multinational restaurant franchise, whose main business is selling mainly sandwiches and salads and was founded in 1960. As a successful world activating franchise, Subway is interested in constantly expanding its business. Acquiring a Subway franchise is possible and the franchisor will offer his assistance in providing any kind of support and help to its franchisees.
Subway has been distributing franchises for over 40 years now and today it has over 28,000 locations all over the world. In 2006 it became the fastest growing franchise in the world.
As with any franchise, one of the most important aspects when negotiating a franchise is the initial investment. This will vary depending on a long series of factors, among which the most important ones are the location, the size of the unit, necessary equipment. The franchise agreement is at first signed for 20 years in order to provide stability in the business plan to both the franchisor and the franchisee and it is renewable for 20 years onward.
The Subway franchise is considered a relatively cheap one to operate and it can offer potential franchisees the possibility of also acquiring the equipment at reasonable prices. The relatively low rate of the initial investment is also because the surface of most stores are only 50 to 150 square meters (500 to 1500 square feet), and they are not restricted only to a certain type of building. These initial low fees are what gave Subway the opportunity to become one of the fastest growing franchise operations in the world.
Subway, in exchange for the franchise fees, as stated in the franchise agreement, will be obliged to provide its franchisees with any kind of logistical, advertising, quality evaluation as well as any kind of support they may need at any given time.
Subway comes to the aid of its franchisees with equipment acquiring leasing program. In order to obtain a Subway franchise one must have in liquidities at least 50% of the total capital requirements and a sufficient backup founding. A Subway development agent or regional manager will give away to its partners any information required.
The royalty fee of a Subway franchise is 8% which goes to the company, as well as 3.5% advertising fee. These fees are calculated on the basis of gross sales, after taxes have bead deduced.