“Eat Fresh and $5 Foot long”. When anyone hears one of these they immediately think of Subway. Subway is a huge sub sandwich franchise that has been around for more than 45 years. It all started when the founder Fred DeLuca wanted to pay for college so he and his partner opened up a sub shop which turned out to one of the largest franchises in the world. They want to be the number one quick service restaurant franchise in the world. This has made Subway the most popular franchises and largest fast food chain in the world.
Subway was founded in 1965 when Fred DeLuca’s $1.25 per hour job was not cutting it. He asked Dr. Pete Buck, a family friend, for financial advice. When the Pete found out how badly Fred wanted to go to college he thought he would help Fred out. Pete told Fred to open up a submarine sandwich shop and explained to him how it worked. Pete wrote him a check for one thousand dollar and became his partner. Later that year they opened up a submarine shop in Wallingford, Connecticut call “Pete’s Super Submarines”, Fred hoped he would acquire enough money for college. Pete’s Super Submarines changed is name a few years later to Subway; it also began franchising in 1974. Fred DeLuca is still Subway’s president after forty-five years and thirty-five thousand restaurants later.
The franchising fee to obtain a Subway is fifteen thousand dollars and a twenty year franchising agreement. The total investment could be as little as $ 78,600, but it depends on the location and other factors. It cost two thousand dollars for the property and four thousand five hundred for the equipment. The security system, freight charges, and outside signs cost two thousand dollars each. The opening inventory cost four thousand dollars, the insurance cost about eight hundred dollars, and the supplies cost five hundred dollars. Training expenses cost two thousand dollars, legal and accounting expense cost one thousand dollars, the opening advertisement cost two thousand five hundred dollars, and for and additional funds for three months cost twelve thousand dollars. So the estimated total start-up cost is $114,800, but it all depends on the location, size of building, and the building cost
Subway gives lets you attend a two week training program at one of the headquarters, which are in Australia, Germany, China, India, Montreal, Canada, or Miami, Florida. The main headquarters for Subway is in Milford, Connecticut. Subway also gives you Co-op advertising, national media, and regional advertising. The royalties are eight percent to the Subway chain and four and a half percent advertising fee is paid to the iFAF, International Franchisee Advertising Fund. Subway also makes the franchisees pay twelve and a half percent a week, which is the gross sale minus the sale tax. The franchise has to pay eight percent royalties a year. The head of Subway helps pay for advertising for the whole company, the FAF (Franchisee Advertising Fund) creates the...