SubwayOwner.com

This is probably the most common question that I get asked on a everyday basis. Its a fair question for someone looking into opening a Subway Franchise unfortunately there is not simple answer for it. Its almost like asking how much a car costs. You can see that there are many factors and mitigating circumstances that have to be evaluated before an honest price point can be given.

However because we are looking at a business opportunity we need to find a way to come up with a fair assessment of cost. First and foremost were not going to delve into the cost of a brand new store. From experience I can tell you that brand new stores are quite risky because there is no sales data that can be evaluated. For this same reason new stores are also quite more difficult to get financing for because of the same reason. Having said all that however I can say that the best approach is then looking at fair market value for an existiningwell established Subway Franchise.

The overall price of your Subway Franchise is going to be based on a few very important factors some of which I will describe below.

Location – Obviously a Subway Restaurant located in the best part of town where the average income is high will cost you quite a bit more then a Subway Restaurant located in a low income neighborhood.

Sales – What are the yearly NET sales of your location. Notice that I said Net Sales. A lot of owners looking to sell like to present Gross Sales figures because they are always higher. This is not an accurate representation of the performance of the store however because we are only concerned with the money that we get to keep. For this reason always work with Net sales.

Remodeled or Not – Several years ago Subway started to remodel all their stores. The mandate was put into place for Subway owners to strip their stores of the old “Subway Tunnel” decor and convert to the new “Tuscan” decor which is quite a bit more modern. This is an owner expense  the sense that Subway does not reimburse you for this upgrade. Clearly then its a mitigating factor in the final cost of your store since a remodel can run anywhere from $50.000 to $90.000

So now that we have gotten some of these factors to consider out of the way you really need to look at what kind of Subway store you are looking into purchasing. As I have mentioned in the beginning lets concentrate on existing stores with proven sales records. Were also going to be dealing with stores that have already been remodeled, as of this writing most of them should be. Please keep in mind that these are rough estimates only and by no means figures that are etched in stone.

SALES VOLUME                     FAIR STARTING POINT (all figures are in thousands)

$400 - $600                             $250 - $300

$300 - $400                             $200 - $250

$200 - $300                             $150 - $200 (200 at the most here)

$100 - $200                             $100 - $150

Less then $100                         Dont bother unless you feel you can really turn this store around

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