I have been in Subway for nearly 22 years. Some of this will be redundant from earlier post, but I hope the following will help:
1) Subway has nearly 33,000 locations in 91 countries. They keep selling locations because they make money.
2) The Subway franchise agreement prohibits a franchisee from owning another business that primarily sells sandwiches, and of course that would include Quiznos.
3) There are NO territorial rights with Subway*. Subway has "Development Agents" (aka DA's). These Development Agents employ field reps that inspect stores on a monthly basis to ensure stores are operating according to company standards. DA's also decide where new locations will open.
*Some DA's are much better than others. If you are planning to get into the system. Go talk to several franchisees in that area and ask about the DA.
4) Talk to current Subway franchisees in the area you are considering and ask lots of questions about their experience. Subway's parent company, FWH (Franchise World Headquarters) formerly DAI, and their Development Agents will never discuss specific numbers for liability reasons. This is why it is import to talk to current franchisees.
5) $5 Footlongs are not causing franchisees to go broke or "lose their shirts". In fact, the opposite has happened. Nationwide average unit volume is now close to $10k/week.
6) There is no minimum hours requirement per corporate. Corporate does not know or care how many hours the franchisee is in the store as long as it is operating in full compliance.
7) Commercial real estate is hurting right now. If you are looking at opening a new store, you should be able to negotiate a very reasonable lease along with some build-out help from the landlord to help reduce initial costs. It is possible to open a store for under $100k!
8) 20-25% profit is very possible, 35% is very unlikely.
9) Franchisees are not required to buy food at inflated cost from the company. In fact, it is the exact opposite. Independent Purchasing Cooperative (IPC) negotiates very favorable pricing on behalf of Subway Franchisees. Subway has considerable buying power.
10) Subway, like any other large company, has its challenges. Overall, my experience has been very positive. However, that's not the case for everyone. Keep in mind when reading negative posts, people who are posting them are often either not informed or disgruntled because of a bad experience.
11) If you don't like following rules or directions from others, then franchise ownership is probably not for you. Subway has a proven system. It is not perfect, but if you follow the system and operate in compliance, your chances at success are very good.
Again, I hope this helps. Good luck in your endeavors!
I had forgotten about this board until I stumbled across it again today...
There has been some good information given here as well as some very wrong information. If you are going to post on a site like this, please consider that a lot of the people reading your words may be considering whether or not to make one of the biggest financial decisions of their lives, possibly risking their family's life savings. If you are not 100% positive the information you are going to post is correct... THEN DON'T POST IT!
I own three Subway restaurants. I don`t want to make anyone mad, but some things posted here are either wrong or misleading. First off, I have been involved with Subway for 17 years, since 1989, and it is a good company.
The average store in the US does a little shy of $8,000/week. So for easy round numbers lets say the average store does $400k/year. It is relatively easy to pull 20% profit if you keep an eye on the business. I averaged 22.63% for the first quarter this year and I was in my stores an average of 10 hours or less per week so 20% is not that hard. But for the following estimate, lets use 20% average profit.
If you have a store that is merely average you should profit in the ballpark of $80k/yr.
Now lets say you were lucky enough to get a great location and you store does $15k/week (the area I am in has several stores that do this and much more in sales so it is very possible), well you should be making in excess of $150k per year.
Now, one or two stores are not going to make you a multi-millionaire, but you can make a comfortable living without much of a time investment.
Now lets switch gears. I`m not sure what article in Entrepeneur Magazine said Subway was rated one of the worst franchises? I would love to see a link to this article? Entrepeneur Magazine rated Subway the #1 franchise in their Franchise 500 for 2006. This was the 14th year Subway was rated #1.
Yes, Subway franchisees must purchase the food from one distributor, not from "the parent company". These prices are not "inflated". Infact, it`s just the opposite. IPC (Independent Purchasing Cooperative) was formed to negotiate prices and ensures all foods/supplies meet "Gold Standard" qualities. Some food distributors don`t want Subway`s business because the pricing leaves so little room for distributor profits. With over 26,000 stores we have tremendous buying power.
If you purchase a subway you do not have the rights to a certain territory. Subway does not have "regional managers", but does have "development agents" a.k.a. "DA". Development agents` "sole mission in life" is not just to open new stores. Yes, as their company given titles suggest they do focus on developing their given markets/territories. There have been some unhappy franchisees when stores were opened close to their existing store and sales were negatively impacted. However, this is not the norm. It depends on the DA. Most DAs are very conscious of their existing franchisees. DAs have contracts with Subway`s parent company, Doctor`s Associates Incorporated. Per their contracts, they must maintain a certain level of sales average in the market. Therefore, they can`t just go putting Subways on every corner to meet the development numbers they need. They have to be smart in their development.
If you are considering Subway, talk to existing franchisees in the area and ask about their satisfaction with the DA of that area. Development Agents are also expected to ensure franchisees are operating within company guidelines by having field reps that inspect stores monthly. They do much more than just open stores.
Again, I`m not writing this to offend anyone who posted above. I just want to make sure that anyone considering Subway has accurate information. I hope this helps.