Subway Franchise Cost in Canada and How to Get Started

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You have decided to put up your own Subway franchises today, and are looking for a unit in a lucrative location.

But you aren’t sure about the initial investment costs, royalty fees, and other figures.

You want to know if Subway offers business opportunities, before starting thinking of locations, menus, and whatnot.

Well, this post is all about Subway franchising.

We are going to answer all your questions regarding the Subway franchise model starting with their demographics and fees.

The Subway restaurant chain is a global franchise based on the principle of offering a healthier alternative to traditional fast food.

With more than 40,000 locations in 110 countries, it’s second only to McDonald’s for several locations worldwide.

Subway is the leading choice for people seeking quick, nutritious meals that the whole family can enjoy.

From the beginning, Fred DeLuca and Dr. Peter Buck had one goal in mind: to make delicious, made-to-order sandwiches affordable for everyone.

They realized their restaurant concept was poised for success at a time when Americans were looking for an alternative to traditional fast-food chains.

With a business model based on low overhead and loyal customers, Subway has grown from a single sandwich shop into one of the world’s most recognizable brands as well as one of the largest restaurant chains in the world.


Related: Tim Hortons Franchise Cost in Canada and How to Get Started


About Subway Franchise

  • Company Full Name: Subway
  • Type: Private Company
  • Industry: Fast food restaurant company
  • Founded Year: August 28, 1965, Bridgeport, Connecticut, United States
  • Founders: Fred DeLuca, Peter Buck
  • Headquarters: Milford, Connecticut, United States
  • Parent Company: Doctor’s Associates, Inc.
  • Subsidiaries: Subway Franchise Systems of Canada, Ltd., and More
  • Website: www.subway.com

Benefits of Subway Franchise in Canada

A lot of people might think that Subway is just like any other fast-food chain but the truth is, this fast-food chain has changed the lives of many entrepreneurs.

If you still have second thoughts about it, here are some of the best benefits of getting a Subway franchise:

1. Financial Assistance

Subway provides an effective equipment leasing program to its franchisees in the United States and Canada.

Under its minority loan program, the company pays $10,000 of the initial franchise fee to qualified franchisees who purchase their first franchise at the full franchise fee.

Under the Pilot Construction Program, one of the franchisor’s affiliates will acquire real estate and build a free-standing restaurant in exceptional circumstances.

Following construction, the premises will be leased to a Subway franchisee.

The franchisor may make loans to franchisees in connection with the operation of a Subway restaurant. These loans’ terms and purposes are negotiable.

The franchisor has the right to change or discontinue these loan programs and equipment leasing programs at any time without prior notice to franchisees.

2. Low investment Cost Compared to Other Franchises

A Subway franchise is one of the least expensive franchises to buy.

According to the company’s website, it has a lower initial investment than any other franchise in the Quick Service Restaurant (QSR) industry.

Opening a new store in Canada is estimated to cost around $$102,000-$234,000 in start-up costs, which is significantly lower than many other fast-food chains require.

That makes it an attractive option for people who don’t have a lot of money to invest but want to own their own business.

3. Great support system

Another benefit of owning a Subway franchise is the tremendous support system that you receive from the company.

As a franchise owner, you will get help with expert guidance in construction and store design, finding your location, and negotiating your lease, as well as help with marketing and resources for inventory management and accounting software.

You will also be given access to online training programs and annual conferences where you can meet with other owners and share ideas and experiences.

4. Proven concept

Subway is one of the largest restaurant chains in the world, and it’s been around for more than 40 years.

It is an established brand that consumers know, so you don’t have to worry about educating people about what you sell or convincing them to give it a try.

You already have a built-in customer base when you open your doors, which increases your likelihood of success right from the start.

5. Comprehensive training programs

Subway offers extensive training programs for its franchisees.

These programs are designed to teach franchise owners how to operate a successful Subway restaurant as well as marketing and advertising strategies to help them stand out from their competition.

6. Easy-to-prepare food

The food preparation method used by Subway is less complicated than many other food franchises, making it easy to learn via the training program offered by the company and easier for new employees to learn on their own once they are hired.

 

How Much does Subway Franchise Cost in Canada?

To open a Subway franchise, you must have sufficient liquidity and net worth, and be able to demonstrate experience in the food industry.

Subway franchise costs vary because there are different franchise models available. Franchisees can purchase a traditional store, a non-traditional location, or a kiosk.

Traditional stores are what most people think of when they hear “Subway.” They are located inside other businesses such as gas stations and convenience stores.

Non-traditional stores are located in areas such as airports and college campuses. Kiosks are found in malls or on city streets and do not have seating available.

Initial Investment for Traditional Locations

  • Initial Franchise Fee – $15,000
  • Real Property – $2,000 to $12,000
  • Leasehold Improvements – $85,500 to $194,500
  • Equipment Lease Security Deposit – $4,500 to $7,500
  • Optional Security System – $2,450 to $3,550
  • Freight Charges – $3,500 – $5,800
  • Outside Signage – $2,000 to $8,000
  • Opening Inventory – $4,400 to $6,050
  • Insurance – $1,200 to $5,000
  • Supplies – $500 to $1,300
  • Training Expenses (including travel & lodging) – $2,500 to $4,500
  • Legal and Accounting – $1,000 to $3,500
  • Opening Advertising – $2,500 to $4,000
  • Miscellaneous Expenses (business license, utility deposits & small equipment) – $4,000 to $8,000
  • Additional Funds – three months $12,000 to $42,000
  • Estimated Total cost – $147,050 to $320,700

Initial Investment for a Non-Traditional Location

  • Initial Franchise Fee – $15,000
  • Real Property – $2,000 to $12,000
  • Leasehold Improvements – $29,900 to $77,000
  • Equipment Lease Security Deposit – $4,500 to $7,500
  • Optional Security System – $2,450 to $3,550
  • Freight Charges – $3,000 to $4,000
  • Outside Signage – $1,600 to $8,000
  • Opening Inventory – $4,400 to $6,050
  • Insurance – $1,200 to $5,000
  • Supplies – $500 to $1,300
  • Training Expenses (including travel & lodging) – $2,500 to $4,500
  • Legal and Accounting – $1,000 to $3,500
  • Opening Advertising – $2,500 – $4,000
  • Miscellaneous Expenses (business license, utility deposits & small equipment) – $4,000 to $8,000
  • Additional Funds – three months – $12,000 to $42,000
  • Estimated Total – $86,550 to $201,400

Other Ongoing Fees

  • Royalty – 8% of total gross sales
  • Advertising – 4.5% of total gross sales
  • Insurance – $1,200 – $5,000 per year
  • Grand Opening Advertising – $2,000

How To Set up a Subway Franchise in Canada

When you invest in a Subway franchise, you’re backed by one of the most successful companies in the world.

You’re given all the tools you need to start your own business, including training, marketing materials, and marketing expertise from one of the best restaurant companies in the world.

Starting a Subway franchise can be an excellent business opportunity.

If you’re looking for a rewarding business to invest in, becoming a franchisee is a great option. Here is how to start your Subway franchise.

1. Do a Market Research

It is entirely up to you to research the Subway franchise opportunity.

If necessary, you should pose as a shopper before purchasing the franchise. This can be an excellent way to learn how the product/service is sold and delivered.

Inquire about price and quality. You must learn how franchisees feel about the cost of goods they receive.

2. Request for the FDD

Before you decide to buy a franchise, you’ll want to know what it entails.

Every franchisor should be willing and able to provide you with a Franchise Disclosure Document (FDD), which is essentially an informational document that details all aspects of starting and operating their business.

Look over it carefully and consider getting professional legal or financial advice if you have any questions or concerns.

You can learn more about how franchises work by checking out our introductory video: How Do Franchises Work?.

3. Prepare your Business Plan

Writing a business plan helps formalize your idea and can streamline the business-creation process by getting you to sit down and think things through methodically.

And, yes, plans are (often) worthless, but planning is everything.

Many entrepreneurs say they rarely look at their plan once they’ve launched—but they’ll also tell you there’s value in thinking through and researching your idea.

At the very least, you’ll quickly figure out what questions you don’t have answers to.

Having a firm grasp of your known unknowns is important and writing a business plan is one way to make sure that happens.

4. Sign Your Subway Franchise Agreement

Before you begin, you need to understand how serious these franchisors are about protecting their intellectual property.

When you sign an agreement with one of these companies, it’s not something that they’ll take lightly if you don’t uphold your end of it.

Make sure that any franchise agreements you sign have very strict clauses for the termination in case things don’t work out between yourself and your franchisor.

When you’re trying to open a franchise, there should be no ambiguity whatsoever.

5. Evaluate Your Finances

Being able to pay your bills while building your Subway franchise is essential.

You should have enough money in savings to cover your expenses for at least six months before making any business decisions.

This will ensure that you can focus on building your business without the stress of figuring out how to pay your bills.

You should also have an idea of how much it will cost to start up your Subway franchise.

You must know what fees are required and are prepared to pay them when they’re due so there isn’t any delay in getting started with your new business venture.

6. Make Sure You Meet the Requirements

Subway also has other requirements that prospective franchisees must meet before applying for a new restaurant location.

These include having restaurant management experience or experience in another industry (with restaurant management training) and having a credit score of 650 or higher.

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