Subway Franchise Cost, Revenue & Review 2026
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]. The 2025 FDD does not disclose unit-level revenue (no Item 19). 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 →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $239K – $537K
- 35th pct Service Resta…
- Avg gross sales
- N/A
- Royalty
- 8.0%
- 89th pct Service Resta…
- Units
- 18,773
- 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 avg · 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.
- RETURNSItem 19 contains no financial performance representation; franchisor explicitly states it does not make any representations about franchisee future or past financial performance
- RISKVerdict A (Strongest tier), verdict score 73/100 (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).
- FLAGBankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
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)
- Ultimate parent
- Underground Purchaser, LLC (owned by Roark Capital Management, LLC)
- 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).
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 41% below the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown22 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Insurance | $1K | $6K | |
| Indemnification | — | — | |
| Noncompete Violation | $15K | $15K | |
| Confidentiality Violation | — | — | |
| Trademark Violation | $250 | $250 | |
| Limited Time Offering and Auto Shipment | — | — | |
| Dispute Resolution | — | — | |
| Breach of Arbitration/Forum Provisions | — | — | |
| Co-Brand Continuing Fee | — | — | |
| Fees Charged by Co-Brand Franchisor | — | — | |
| Optional Restaurant Listing Service | $100 | $100 | |
| Restaurant Technology Fees | $75 | $75 | |
| Adyen Acquirer Fee - Authorization (until Q2 2025) | $0 | $0 | |
| Adyen Acquirer Fee - Capture (until Q2 2025) | $0 | $0 | |
| Adyen Acquirer Fee - Refund (until Q2 2025) | $0 | $0 | |
| Network and Interchange Fees (Adyen) | $0 | — | |
| Chargeback Fee (Adyen) | $2 | $2 | |
| Global Payments Acquirer Fee (starting Q2 2025) | $0 | $0 | |
| Network and Interchange Fees (Global Payments) | $0 | — | |
| Monthly Terminal Fee | $10 | $10 | |
| Total initial investment | $17K | $22K |
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%
- percentage · 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 did not disclose financial performance in FDD Item 19. The ROIC and return models require Item 19 revenue. Without it all inputs are estimates. You can still run the calculator with your own assumptions by entering an expected revenue figure.
Returns model · single-unit ROIC
What would one Subway unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
17%
Below the 30–60% attractive-franchise band
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
Item 19 contains no financial performance representation; franchisor explicitly states it does not make any representations about franchisee future or past financial performance
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
Franchisor chose not to disclose financial performance representations. You will need to gather unit economics directly from existing franchisees.
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 averages
How Subway Compares
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 18,773
- 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
3-year detail · Item 20
- Opened (3yr)
- 499
- Closed (3yr)
- 1,026
- Terminated (3yr)
- 4
- Non-renewed (3yr)
- 46
- Transfers (3yr)
- 1,307
- Reacquired (3yr)
- 148
- Franchisor bought back
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.
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%
- 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.
Premium insight
SBA Lending Report
Deep-dive into Subway's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 15 states
- Startup risk premium and job creation velocity
- 35-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
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.
Litigation (Item 3)
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.
Largest disclosed settlement: $500,000
Bankruptcy (Item 4)
Disclosed in last 7 years
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 73 / 100 verdict
- 01HIGHGoing Concern status is FALSE — franchisor may face solvency/operational viability issues
- 02MEDNo Item 19 financial performance data disclosed — impossible to validate ROI claims or typical unit economics
- 03MINORRoyalty fee percentage not specified — hidden cost structure creates pricing uncertainty and potential for surprise escalations
- 04MINORNo territory protection — franchisees face direct competition from other Subway locations and channel conflict
- 05MEDUnit growth data unknown — suggests stagnation or decline in system size, typical of mature/struggling QSR franchises
- 06MINORInvestment 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 | none |
| 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
FDD download
Subway · FDD (2025) PDF
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 does not disclose average franchise owner earnings in their FDD Item 19. Not all franchisors are required to make financial performance representations. We recommend asking existing franchisees directly about their financial experience.
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 18,773 total units in the United States, including 18,773 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 73 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. 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
Are you the franchisor?
If you represent Subway, you can request corrections or provide updated information.
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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.