Subway Franchise Cost, Revenue & Review 2026
- Investment
- $239K – $537K
- Disclosed sales
- not disclosed
- SBA charge-off
- 6.8%
- on 6,096 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Subway is a quick-service chain selling made-to-order submarine sandwiches, wraps, and salads. Franchisees operate compact, low-build-out shops assembling each order to the customer's spec.
FranchiseVerdict summary · 2026
A Subway franchise requires a total initial investment of $239K – $537K, including a $15K franchise fee and an ongoing 8.0% royalty[2]. This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. SBA 7(a) loans show a 6.8% charge-off rate across 6,096 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: medium - issued 12 to 24 months ago; a newer filing is likely on file
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored5 of 5 headline figures on this page cite a page of the filing.
Overview
- Investment
- $239K – $537K
- 34th pct Service Resta…
- Avg gross sales
- N/A
- Royalty
- 8.0%
- 93rd pct Service Resta…
- Units
- 19,502
- 97th pct Service Resta…
- SBA charge-off
- 6.8%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $239K – $537K including a $15K franchise fee, 8.0% ongoing royalty.
- RETURNSThis franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
- RISKVerdict A (Strongest tier), verdict score 71/100 (higher is better). SBA loan charge-off rate of 6.8% across 6096 loans (near or below the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHNegative: net -631 franchised outlets in the latest year (499 opened, 1,026 closed); 120 signed but not yet open (Item 20).
- FLAGItem 4 discloses a bankruptcy of an officer or of a company an officer ran, not of the franchisor. Review Item 4 for details.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Doctor's Associates LLC
- Parent company
- Subway Worldwide System Holdings, LLC (SWSH)
- FDD Item 1, page 8 of the 2025 FDD
- Ultimate parent
- Underground Purchaser, LLC (owned by Roark Capital Management, LLC)
- FDD Item 1, page 8 of the 2025 FDD
- Predecessor
- and Affiliates
- Prior franchisor entity
- CEO title
- President and Chief Executive Officer
- Jonathan Fitzpatrick
- Incorporated in
- Delaware
- HQ
- 1 Corporate Drive, Suite 1000, Shelton, CT 06484
- Auditor
- PricewaterhouseCoopers LLP
- Audited financials
- Franchisor revenue
- $925.2M
- vs $975.3M prior year
Independent franchisee associations
- Franchise Advisory Council (FAC)
- Franchisee Advisory Board
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Affiliated brands
- Subway US IP Holder
- SIBV has sold Master Franchise Businesses in Bahrain
Other brands the franchisor or its parent operates (Item 1).
Same owner · FDD Item 1, page 8
Portfolio: Roark Capital (private-equity sponsor)
Grouped by the owner's name as each filing prints it (this page: the 2025 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
Overview
About
- CEO
- Jonathan Fitzpatrick
- Headquarters
- Connecticut
- Founded
- 1974
- FDD year
- 2025
- States available
- 55
Can you afford it, and what does the money buy?
Entry cost runs 20% below the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown15 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee | $15K | $15K | |
| Real Property | $2K | $12K | |
| Leasehold Improvements | $75K | $200K | |
| Equipment, Furniture and Décor | $107K | $209K | |
| Optional Security System (not including monitoring) | $2K | $4K | |
| Freight Charges (varies by location) | $8K | $14K | |
| Outside signage | $2K | $8K | |
| Opening Inventory | $4K | $6K | |
| Insurance | $1K | $6K | |
| Supplies | $500 | $1K | |
| Training Expenses (including travel & lodging) | $3K | $5K | |
| Legal and Accounting | $1K | $4K | |
| Grand Opening Advertising | $2K | $4K | |
| Miscellaneous Expenses (business licenses, utility deposits, & small equipment) | $4K | $8K | |
| Additional Funds - three months | $12K | $42K | |
| Total initial investment | $239K | $537K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $239K – $537K
- Top 40% of category vs category
- Liquid capital req'd
- $15K – $45K
- Top 40% of category vs category
- Franchise fee
- $15K – $15K
- Top 40% of category vs category
- Royalty
- 8.0%
- typical 6–8%
- Ad fund
- 4.5%
- typical 3–5%
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 8.0% of gross sales |
| Marketing / ad fund | 4.5% of gross sales |
| Technology fee | $75 |
| Transfer fee | $8K |
| Renewal fee | $4K |
| Inventory (initial) | $8K – $15K |
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
Subway makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. The return models need a revenue figure to start from, and the operating costs that turn gross sales into a profit are in no FDD. Enter your own and the calculator runs on your assumptions — nothing here is modelled until you do.
Returns model · single-unit ROIC
What would one Subway unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for annual revenue, COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2025 FDD
Financial Performance
No financial performance representation
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
8.0% royalty + 4.5% ad fund — higher than the category average of 5.5%.
Disclosure
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Operator retention
System contracting at -5.2% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Quick-Service Restaurants medians
How Subway Compares
Category median of published Quick-Service Restaurants brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 19,502
- Opened
- 499
- Last reporting year
- Closed
- 1,026
- Terminated
- 4
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 46
- Term expired, not renewed (per Item 20)
- Turnover rate
- 5.7%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- -5.2%
- Net unit change over 3 years
- 3-yr CAGR
- -5.2%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 4
- Not renewed
- 46
- Transferred
- 1,307
- Reacquired
- 148
- Franchisor bought back
- Signed, not yet open
- 120
- 0.01 per open outlet · Item 20 Table 5
- Projected new
- 150
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 18 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Where the owners are · Item 20 owner list
0 current owners across 0 states; 33 former (terminated, transferred or not renewed) listed separately.
Counts only, from the list the franchisor prints in Item 20. Names and phone numbers are for your own due diligence and are not shown here.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 6,096
- Loan volume
- $1.2B
- Median loan
- $132K
- 50th percentile
- Charge-off rate
- 6.8%
- on 6,096 loans · rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 93.2%
- 5-yr charge-off
- 3.9%
- Loans approved 2021+
- Active lenders
- 752
- Defaults
- 334
- Typical loan rate
- 6.4%
- avg rate to borrowers
- Franchised industry avg
- 21.5%
- brand beats franchise avg ↓
- Jobs supported
- 51,452
- 5.3 per loan
- Lender concentration
- 5%
- top lender's share
Borrower mix: 19% went to startups / new businesses, 81% to established operators
Franchise vs independent — in limited-service restaurants, franchised businesses charge off at 21.5% vs 25.0% for independents — franchising is associated with 14% lower SBA default risk in this category.
Vintage analysis
Subway charge-off rate by loan vintage
Shaded area: recent vintages with few resolved loans; rates may change as loans mature.
Top lenders financing Subway franchisees
Showing 3 of 752 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Subway from SBA 7(a) FOIA data.
- Principal loss rate
- 3.5%
- Avg SBA guarantee
- 74%
- Avg interest rate
- 6.40%
- Avg chargeoff amount
- $104K
- Lender concentration
- 5.4%
- Job velocity
- 5.3 per $100K
- Startup risk premium
- -0.8pp
- NAICS benchmark
- 15.7%
- NAICS 722211
- Jobs supported
- 51,452
Top SBA lendersTop lender holds 5% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | PNC Bank, National Association | 277 | $38.0M | 4.8% |
| 2 | Wells Fargo Bank National Association | 226 | $40.4M | 8.2% |
| 3 | The Huntington National Bank | 204 | $36.0M | 6.7% |
| 4 | Bank of America, National Association | 168 | $14.9M | 5.4% |
| 5 | JPMorgan Chase Bank, National Association | 155 | $22.2M | 3.9% |
| 6 | Independence Bank | 121 | $18.5M | 19.8% |
| 7 | Manufacturers and Traders Trust Company | 118 | $13.6M | 9.9% |
| 8 | Readycap Lending, LLC | 105 | $26.7M | 8.1% |
| 9 | U.S. Bank, National Association | 101 | $12.8M | 4.1% |
| 10 | KeyBank National Association | 97 | $16.3M | 6.5% |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| CACalifornia | 480 | 24 | 5.3% |
| NYNew York | 302 | 32 | 11.4% |
| TXTexas | 301 | 27 | 9.2% |
| OHOhio | 283 | 7 | 2.9% |
| WAWashington | 281 | 11 | 4.1% |
| PAPennsylvania | 275 | 22 | 8.4% |
| ILIllinois | 253 | 22 | 9.5% |
| INIndiana | 202 | 6 | 3.2% |
| MAMassachusetts | 166 | 20 | 12.2% |
| NJNew Jersey | 148 | 25 | 17.2% |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
What could kill this investment?
SBA loans charge off at 6.8% — 58% below the 16.0% national norm, i.e. lower lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Subway presents HIGH RISK due to undisclosed financials (no Item 19), going concern status, lack of territorial protection, and opaque royalty structure, making ROI validation impossible for prospective franchisees.
Why this reads harsher than the A grade: the grade weighs financial health, unit economics, unit growth, scale, legal, and transparency across the whole filing, while this summary lists individual flags without that weighting. The flags are worth checking with current owners; neither is investment advice.
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
Item 3 discloses 47 material litigation actions involving the franchisor and its affiliates plus 10 franchisor-initiated actions in Exhibit L, including franchisee disputes, ADA compliance settlement with DOJ, a false-advertising class action settled for $500,000, and a California FIL consent order.
Bankruptcy (Item 4)
Subject: an officer. An officer’s own bankruptcy or a company an officer ran, not the franchisor’s
Benjamin Selden (CFO of SWSH, Subway US IP Holder, FWH, FWHT, DAL, and Subway MyWay, LLC) previously served as SVP of Finance for Sungard Availability Services Capital, Inc., which filed Chapter 11 bankruptcy on May 1, 2019 (Case No. 19-22915-rdd); the reorganization plan was confirmed and the case closed September 6, 2019.
Audited financials (Item 21)
Yes · PricewaterhouseCoopers LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 71 / 100 verdict
- 01MEDNo Item 19 financial performance data disclosed — impossible to validate ROI claims or typical unit economics
- 02MINORRoyalty fee percentage not specified — hidden cost structure creates pricing uncertainty and potential for surprise escalations
- 03MINORNo territory protection — franchisees face direct competition from other Subway locations and channel conflict
- 04MEDUnit growth data unknown — suggests stagnation or decline in system size, typical of mature/struggling QSR franchises
- 05MINORInvestment range ($238k–$536k) is substantial with no corresponding revenue/profit benchmarks to justify capital requirement
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 12.5% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 20 years |
|---|---|
| Renewal term | 20 years |
| Allowed renewalsℹ | 1 |
| Territory type | No territory protection |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 1 year |
| Non-compete (miles)ℹ | 3 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 10 days |
| Termination groundsℹ | 14 |
| Curable defaultsℹ | 2 |
| Mandatory arbitration | Yes |
| Arbitration location | Connecticut |
| Jury trial waiver | Yes |
| Governing law | Florida |
| Litigation count | 57 |
View Item 3 litigation summary
Item 3 discloses 47 material litigation actions involving the franchisor and its affiliates plus 10 franchisor-initiated actions in Exhibit L, including franchisee disputes, ADA compliance settlement with DOJ, a false-advertising class action settled for $500,000, and a California FIL consent order.
Items 10, 11
Training & Operations
- Classroom training
- 72 hrs
- On-the-job training
- 72 hrs
- Training location
- Designated training restaurant location(s) selected by Subway
- Ongoing training
- Required
- Time to open
- 12 mo
- From signing to launch
- Site selection
- franchisee
- Franchisor financing
- Offered
- Item 10
- POS system
- SubwayPOS
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: SubwayPOS
Item 20 · call current owners
Franchisee Contacts
33 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Subway franchise?
The total investment to open a Subway franchise ranges from $239K – $537K, with an initial franchise fee of $15K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Subway franchise owners earn?
Subway makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Who owns Subway?
Subway is franchised by Doctor's Associates LLC. Its parent company is Subway Worldwide System Holdings, LLC (SWSH). The ultimate parent named in the FDD is Underground Purchaser, LLC (owned by Roark Capital Management, LLC). Source: FDD Item 1, 2025 filing.
What is Item 19 in the Subway FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Subway FDD and qualifies whose outlets they describe.
What is Subway's franchise failure rate?
Based on SBA 7(a) loan data, Subway has a charge-off rate of 6.8% across 6,096 loans, meaning 6.8% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Subway franchise locations are there?
As of their most recent FDD filing, Subway has 19,502 total units in the United States, including 19,502 franchised units and 0 company-owned units. 499 new units were opened in the latest reporting year.
Is Subway a good franchise to buy?
FranchiseVerdict rates Subway as a A-grade franchise with a verdict score of 71 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.