how to become a subway franchise owner

7/28/2019 How to Become a SUBWAY Franchise Owner

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How To Become A SUBWAY

Franchise Owner.

By

Manu kaushik

12PGDMWM05


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About SUBWAYSUBWAY restaurants began in thesummer of 1965 when 17 year old FredDeLuca graduated high school withaspirations of becoming a doctor. While ata cookout that July, he asked a familyfriend, Dr. Peter Buck, for advice on howto pay for college hoping that Dr. Buckwould just give him the money. Instead, Dr. Buck suggested that Fred opena submarine sandwich shop similar to the one Dr. Buck frequented as achild in Maine so that Fred could earn enough money to pay his tuition. Dr.Buck wrote Fred a check for $1,000 and they became business partners.This was the start of Doctors Associates Inc.A month later, on August 28, 1965, Fred and Dr. Buck opened Petes SuperSubmarines in Bridgeport, Connecticut. From the very beginning theyestablished goal setting as an integral part of SUBWAY restaurants

growth. With a clear vision, Fred and Dr. Buck implemented a strategicplan to open 32 restaurants within 10 years. In 1974 they found themselvesbehind schedule with only 16 open restaurants. Fred decided it was time togive franchising a try. Today, SUBWAY restaurants have more than33,000 locations in approximately 90 countries. We have been rated the #1franchise by Entrepreneur Magazine for 17 of the past 23 years.


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STEPS to become a Franchise

Review the franchise program information on the Subwaywebsite and fill out the online form to request a brochure.

Register for an online seminar to find out more information.Attend one in your area to receive the most pertinentinformation. Subway also offers trade shows with valuableinformation on how to become a franchise owner.

Submit an online application to become a Subway franchisee.Required personal information on you, your spouse and partner(when applicable) include: education and business background,liquid and fixed assets and references. You also indicate apreferred geographical franchise area.

Learn more about the next steps while your application is beingprocessed. You can find an area that is open for development,contact the regional sales manager with further questions or lookinto getting a loan for your Subway franchise.

Receive notification from the Subway development team thatyour franchise application is approved. A representative fromSubway will help with the process once you have decided tobecome a franchise owner.

Secure a loan for your Subway franchise store. Loan amountsvary based on the location and size of the restaurant. Subwayoffers loan programs and financial support for all of theirfranchise owners.

Work with a Subway representative to purchase an existingSubway for sale or to find a location to build on.


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Frequently Asked Questions

How do I become a franchisee?

Complete an application online or request one from the

development office. You will receive a Franchise Disclosure

Document. It is your responsibility to read it. Next, pass a basic

skills test. Then you will be ready to investigate our business

opportunity with the help of the local development office. The

development office and Doctors Associates Inc. will determine if

you meet our qualifying standards.

How much is the SUBWAY Franchise Fee?

The initial franchise fee is $15,000. If qualified to purchase

additional locations, the franchise fee is $7,500.

What is the term of a SUBWAY franchise?

The $15,000 franchise fee purchases a franchise honored for

twenty years. This franchise is renewable for an additional twenty

years with no other franchise fees.

What are SUBWAY restaurants Capital Requirements?

The total investment can range from $114,800 to $258,300 for

traditional locations and $84,300 to $200,100 for non-traditionallocations. This includes your franchise fee, construction and


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equipment costs as well as operating capital. Figures do not

include extensive exterior renovations. These amounts represent

the net investment required if you are eligible for the company's

equipment leasing program. If you do not select the equipmentleasing program or it is not available, you should substitute the

costs for Equipment Lease Security Deposit with $49,500 to

$72,000. We suggest that franchisees have half of the amount in

cash and finance the other half. We prefer that a franchisee does

not carry a large debt service.

Is lending available for the purchase of a SUBWAY

restaurant?

SUBWAY provides a list of lenders with experience lending to

our franchisees. The development office will provide you with

lender requirements to help evaluate these lenders. Additional

sources for funding include personal savings and investment

accounts, home equity loans/lines and financial assistance from

family and friends.

How do I secure SUBWAY equipment?

You may purchase SUBWAY equipment outright with cash or

with a secure loan. The SUBWAY franchise system also offers

an equipment leasing package that requires a security deposit of

10% of the equipment costs, with a minimum of $1,000. The lease

payments are for 60 months. At the end of the lease term you may

purchase the equipment for 10% of the original value. The securitydeposit will be applied towards the purchase. The equipment may

be purchased at any time during the lease period using the buyout

calculation schedule. For additional information or to see a sample

copy of the equipment lease, please refer to the Franchise

Disclosure Document.

What kind of training is available to new franchisees?

Training is for two weeks, 50% in class and 50% in store training.


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All franchisees named on each franchise agreement must

satisfactorily complete training at SUBWAY World

Headquarters before the store will be allowed to open.

How much money can I expect to make and what is my return

on investment?

In our Franchise Disclosure Document, we further explain why we

cannot provide an earnings claim. We do not furnish or authorize

our employees, salespeople, or Development Agents to furnish any

oral or written information concerning the actual or potential sales.

Actual results vary from restaurant to restaurant and we cannot

estimate the results of any particular franchise. We encourage you

to call SUBWAY restaurant owners from the Franchise

Disclosure Document to learn firsthand why they decided to

acquire additional franchises.

What is my financial obligation as a SUBWAY franchisee?

Beyond the one time franchise fee of $15,000 you will be required

to pay royalties to Doctors Associates Inc. of 8% on weekly grosssales. You will be required to pay an advertising fee to the Subway

Franchise Advertising Fund Trust (SFAFT) of 4.5% on weekly

gross sales.

Are new sites available?

New sites are available in Rhode Island and in Massachusetts. The

Development Office maintains strong working relationships with

many real estate professionals and local landlords. New LondonCounty, CT currently has existing locations for sale.

How do I secure a new location?

New locations approved for development by SUBWAY will be

provided to you during the qualifying process. You may also

submit a location that you find. We will investigate your location

and provide you with analysis of its viability for development.


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Who negotiates the lease?

The Development Office initially negotiates the terms of a lease.

Subway Real Estate, LLC (SRELLC) will finalize the lease with

the landlord and sign the master lease.

Do I sign the lease?

You will sign a sub-lease with Subway Real Estate, LLC

(SRELLC) under the same terms and conditions as the master

lease. You will pay rent directly to the landlord each month.

Can I use my contractor to build out my restaurant?

Yes. Our construction coordinator can also recommend acontractor who is experienced with building SUBWAY

restaurants. We suggest you secure several bids before signing a

construction contract.

Can I build out my own restaurant?

Many builders will allow the franchisee to assist with the build out

depending on your experience and credentials. SUBWAY

requires a licensed contractor to secure permits and oversee the

project.

Where do I purchase food for my restaurant?

All franchisees are required to order food from an approved

vendor. Hallsmith-Sysco is the gold standard vendor in the

Dixon/Turi Territory. Pricing, quality and transport are monitored

by SUBWAY restaurants Independent Purchasing Council(IPC).

Is operational support available?

Yes. Each franchisee is assigned a field consultant to help you

meet SUBWAY standards of operation. In addition, support is

available from the development office, the corporate help line as

well as online through our e-library network and University of

SUBWAY courses.


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Am I protected from over development?

SUBWAY has a monitoring system in place called site review

which evaluates new development in relation to existing locations

to help mediate impact.

How do I advertise my SUBWAY?

Franchisees pay 4.5 % royalty to the Subway Franchise

Advertising Fund Trust (SFAFT) each week. Those funds help pay

for SUBWAY national advertising. Approximately one percent

of those funds are returned to the local SFAFT market to support

advertising in the Dixon/Turi Territory. Franchisees are also

encouraged to advertise to their local customer base. Our in-house

marketing coordinator will help you detail a store specific

marketing plan.

Can I sell my restaurant?

Yes, you may sell your restaurant at any time after opening,

provided the company approves the buyer.

how to become a subway franchise owner

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