Analysis
Firehouse Subs Franchise Cost: Investment & Revenue Data
Firehouse Subs franchise cost breakdown: FDD Item 7 investment, Item 19 revenue, SBA loan charge-off rate, and comparison to sandwich franchise competitors.
A Firehouse Subs franchise costs $200K to $850K to open in 2026, with a $20,000 franchise fee and a 6% ongoing royalty. Average unit revenue is approximately $785,000. The SBA loan data tells a concerning story: across 638 SBA 7(a) loans, Firehouse Subs carries an 11.1% charge-off rate and a risk score of 72 out of 100 — one of the highest default rates among major sandwich franchises.
The RBI acquisition changed the game
In late 2021, Restaurant Brands International — the parent company behind Burger King, Tim Hortons, and Popeyes — acquired Firehouse Subs for approximately $1 billion. That acquisition shifted the brand from founder-led to corporate conglomerate ownership, and the effects are still rippling through the franchise system.
RBI's playbook is well established: acquire a brand, push aggressive unit growth, and extract value through supply chain consolidation. Franchisees across other RBI brands have publicly complained about margin compression, mandatory remodels, and a focus on corporate economics over operator profitability. Whether Firehouse Subs franchisees face similar pressures remains to be seen, but the corporate DNA is now in place. If you're evaluating this brand, talk to current owners about how things have changed since the acquisition. Use our franchisee contacts tool to reach verified operators.
SBA loan performance — the red flag
Firehouse Subs has 638 SBA 7(a) loans on file with an 11.1% charge-off rate. That means roughly 1 in 9 Firehouse Subs franchise loans ended in default.
For context, here is how that compares to direct competitors in the sandwich segment:
| Brand | SBA Default Rate | Total Loans | Risk Score |
|---|---|---|---|
| Jersey Mike's | 7.3% | 410 | 28 |
| Firehouse Subs | 11.1% | 638 | 72 |
| Subway | 30.7% | 4,500+ | 85 |
Firehouse Subs lands in an uncomfortable middle ground. It's significantly worse than Jersey Mike's (which has built a reputation for strong unit economics and careful expansion), but far better than Subway's troubled 30.7% default rate. The 638-loan sample is large enough to be statistically meaningful, so this isn't a small-sample anomaly. Explore the full SBA data on our SBA explorer.
Investment breakdown
The FDD Item 7 discloses a total initial investment range of $200,000 to $850,000. The wide range depends on whether you're building a new location, converting an existing space, or opening a non-traditional unit (like an airport or university location).
| Cost Category | Low Estimate | High Estimate |
|---|---|---|
| Initial franchise fee | $20,000 | $20,000 |
| Leasehold improvements | $60,000 | $400,000 |
| Equipment & signage | $55,000 | $210,000 |
| Opening inventory & supplies | $8,000 | $18,000 |
| Training & travel | $12,000 | $35,000 |
| Working capital (3 months) | $45,000 | $167,000 |
| Total estimated investment | $200,000 | $850,000 |
Most traditional restaurant build-outs fall in the $400K to $700K range. Non-traditional locations at the low end can be attractive for reducing capital risk, but they typically generate lower revenue because of limited hours or captive-audience pricing constraints.
Revenue vs. investment — the math problem
At roughly $785,000 in average unit revenue, Firehouse Subs is a mid-tier performer for the sandwich category. After deducting the 6% royalty ($47,100), an estimated 3–4% advertising contribution ($23,500 to $31,400), food costs (~30%), labor (~28%), and occupancy, most operators are looking at a take-home income of $50,000 to $90,000 on a single-unit basis.
That's not terrible, but consider the math: if you invested $500K and you're earning $70K, your cash-on-cash return is 14%. Compare that to Jersey Mike's, where operators with similar investment levels are generating higher top-line revenue and better margins. The numbers tell you why Jersey Mike's has a 7.3% SBA default rate and Firehouse Subs sits at 11.1%. Tighter margins leave less room for error, and any soft month can cascade into loan distress.
Ongoing fees
- Royalty fee: 6% of gross sales. This is on the higher side for sandwich franchises — Jersey Mike's charges 6.5%, but Subway charges 8%, making the competitive range fairly tight.
- Advertising fund: 3–4% of gross sales. Contributions go toward national advertising and local cooperative marketing.
- Technology fee: A monthly technology and POS system fee, typically $500 to $1,000 per month depending on the configuration.
At $785K revenue, the combined royalty and advertising burden is roughly $70,000 to $78,000 per year — about 9–10% of gross sales flowing back to the franchisor before you cover any operating expenses.
Who should consider Firehouse Subs
Firehouse Subs works best for operators who can hit these conditions: a strong real estate location with high lunch traffic, multi-unit plans to spread fixed overhead, and enough capital reserves to survive the first 18 months. The brand's firefighter-themed identity and community involvement programs (the Firehouse Subs Public Safety Foundation has donated over $80 million to date) create genuine brand loyalty. The hot sub format differentiates it from cold-sub competitors like Subway and Jimmy John's.
But the 11.1% SBA default rate means you need to be realistic about the risk. One in nine operators on government-backed loans could not repay. That's not catastrophic, but it's elevated enough to warrant extra scrutiny during due diligence. Read the FDD carefully, visit multiple locations, and call current franchisees before committing. For more on evaluating franchise risk, see our franchise failure rate analysis.
Should you buy a Firehouse Subs franchise?
Firehouse Subs is a known brand with a loyal customer base, and the $200K–$850K investment range makes it accessible compared to larger QSR concepts. But the 11.1% SBA default rate, the relatively modest $785K average revenue, and the uncertainty around RBI's corporate ownership all argue for caution. If you're set on the sandwich category, compare Firehouse side-by-side with Jersey Mike's on our comparison tool. The data strongly favors Jersey Mike's on loan performance, and you owe it to yourself to understand why.
Related franchise research
Continue your research with our Jersey Mike's franchise cost breakdown, Subway franchise analysis, and Burger King franchise cost guide.
Research Firehouse Subs further
- 📄 Download the Firehouse Subs FDD summary — $5 per brand
- 📞 Get Firehouse Subs verified franchisee contacts — $49 per brand
- 📊 Category profitability report — $99
Frequently Asked Questions
- Why is the Firehouse Subs SBA default rate so high?
- Firehouse Subs has an 11.1% SBA charge-off rate across 638 loans, which places it well above the sandwich franchise average. The primary driver is moderate revenue ($785K average) relative to build-out costs, leaving tight margins that make operators vulnerable to any downturn in traffic or spike in food costs. By comparison, Jersey Mike's has a 7.3% default rate with similar investment levels but stronger unit economics.
- How much does a Firehouse Subs owner make per year?
- Based on the $785,000 average unit revenue and typical operating costs (6% royalty, ~3-4% advertising, 30% food costs, 28% labor, plus rent and overhead), most single-unit Firehouse Subs franchisees take home an estimated $50,000 to $90,000 per year. Multi-unit operators can earn more through shared management and overhead efficiencies.
- Has the RBI acquisition affected Firehouse Subs franchisees?
- Restaurant Brands International acquired Firehouse Subs in late 2021 for roughly $1 billion. RBI also owns Burger King, Tim Hortons, and Popeyes. Early reports suggest operational changes including supply chain consolidation and renewed expansion targets. Prospective franchisees should speak directly with current operators about how the corporate transition has affected profitability and day-to-day support.
- How does Firehouse Subs compare to Jersey Mike's as a franchise?
- Jersey Mike's outperforms Firehouse Subs on most measurable metrics. Jersey Mike's has a 7.3% SBA default rate vs. Firehouse's 11.1%, and Jersey Mike's operators generally report higher average unit volumes. Investment ranges are comparable ($200K-$850K for Firehouse vs. roughly $235K-$810K for Jersey Mike's). Jersey Mike's is currently the stronger franchise system in the sandwich segment based on available data.
- What is the Firehouse Subs franchise fee and royalty?
- The Firehouse Subs franchise fee is $20,000, and the ongoing royalty is 6% of gross sales. There is also an advertising contribution of 3-4% of gross sales. At $785K in average revenue, the combined royalty and advertising payments total approximately $70,000 to $78,000 per year.