Franchise-Consultation

Subway Franchise Cost | Investment, Fees & Expenses

By Shreya Durgan

The cost for opening a Subway Franchise varies from location to location, but it is estimated that it costs anywhere between Rs. 85 Lacs to Rs. 1 Crore to open a Subway Franchise store.

A Subway franchise can be an excellent opportunity for people who are interested in owning their own healthy food business and have the right skill sets and experience.

Initial Setup Cost

The initial setup cost is the one-time cost incurred by the franchisee to set up a Subway store. In India, it could be anywhere from Rs. 60 lacs - 1 crore, including the initial franchise fee.

It includes items like rent, furniture, fixtures, equipment and signage.

The initial setup cost for Subway varies depending on the location of the store. For instance, a Subway franchise in Mumbai will incur higher initial setup costs than a franchise in Delhi.

This is a list of all the things that you will need to have with you initially before starting a Subway franchise in India:

Store Design
Equipment
Furniture
Training for staff
Legal and Accounting Costs
Marketing Costs
Refrigeration costs
Labor costs
Licenses and permits

Franchise Fee

The Subway Franchise Fee in India is Rs. 6.5 Lacs.

The franchise fee covers the application cost, training, initial marketing and advertising, sales commission and general costs incurred by the franchisor's team in getting you all set up.

You have to pay the franchise fee if you get selected and approved by the franchisor to own a Subway Franchise.

For this purpose, you have to fill out the form here and wait for a response from them.

Equipment Cost

There are multiple equipment required for starting a Subway Franchise.

Here is a list of equipments:

Nu-Vu Proofer / Convection Oven
Combination Microwave Ovens
Water Boilers
Contact Grills and Panini Grills
Table Sinks and Shelves
Commercial Toasters
Automatic Espresso Coffee Machine
Refrigerated Cold Salad Storage with Glass Display
Slicer
Bottle Coolers and Beer Fridge
Serve Over Deli Counters
Food Display Merchandisers
Walk in refrigerator
Soda fountain
Ice Tea Dispenser

The minimum budget required for equipment is around Rs. 25 Lacs - Rs. 30 Lacs. Most importantly, you can buy these equipment from only Subway-approved vendors.

It is to ensure the quality of food preparation and to maintain the standard of work practice at Subway Franchise.

Running Cost

Although, you will not need to invest more than 1.5 Crore in your Subway Franchise to run it smoothly, here is what you will require the funds for:

Royalty

Subway Franchisees have to pay 12.5% every week (gross sales minus the sales tax).

Out of which, 8% goes toward the franchise royalties, and 4.5% goes toward advertising.

Salaries

The average Subway monthly salary ranges from approximately Rs. 13,417 per month for an Account Executive to Rs. 23,553 per month for Area Manager.

Accordingly, you will need to hire around 5-6 people and train them according to Subway Standards.

You will be guided through each and everything by Subway's Corporate Team.

Supplies

The franchise owners are obligated to buy from only subway-approved vendors.

Subway has an Independent Purchasing Cooperative (IPC).

IPC is a franchisee-owned and operated purchasing cooperative that negotiates the lowest costs for goods and services while maintaining quality and standards and ensuring the best value for Subway franchisees.

The minimum budget for supplies must be around Rs. 25,000 - Rs. 40,000 per month, depending on the demand in your area.

Utility Bills

As the store uses high voltage equipment all day, the monthly utility bill could be around Rs. 40,000 - Rs. 50,000.

6 Month Backup Funds

To successfully run a Subway franchise in India, it is important to set aside funds for 6 months in the future.

6-month backup funds are important for running a Subway franchise in India. This is because many things can happen in the future, and it is important to have some extra money set aside just in case something goes wrong.

You will need to keep a minimum of Rs. 20 Lacs - Rs. 30 Lacs as a safety net in case your franchise does not perform well initially.

The reason could also be that the people are either unaware or find it difficult to like the taste.

Other Expenses

The other expenses in a Subway Franchise include the following:

Optional Security System

Installing a security system is not mandatory, but it is recommended. It will always help in case of any conflicts, thefts or mishaps at the store.

Freight Charges (varies by location)

Freight charges are the cost that a company pays to have goods shipped to them. These costs can vary depending on the type of freight, the distance it needs to be shipped, and if it is being sent by air or sea.

Insurance

It has now turned out to be very beneficial to have insurance for each and everything you have. No one knows what can happen in the future. Thus, do not skip applying for insurance. After all, you invested to benefit from it and not lose it to mishaps.

The insurance amount could differ from company to company and the terms and conditions of it.

You will also get assistance for the same from the Subway Team.

Training Expenses

The staff you hire will be trained by Subway's Team. But, they charge an amount for that purpose as well. It could cost you around Rs. 2,00,000 minimum.

Legal and Accounting

When it comes to money, and that too a huge amount, you will definitely need to spend on accounting. It is mandatory to keep all your money clean and account for each and everything properly.

For this purpose, you can opt for a business service provider like StartEazy to help you with recording your accounts, or you can hire a Chartered Accountant.

These days a business service provider offers better, fast and less expensive services than a CA. Thus, it is a good idea to go for one.