Starting a food and beverage business may be daunting – especially since a record number of over 3,000 F&B outlets closed down in 2024.
You need to plan a menu, think of branding, source for ingredients and many other factors that someone new to the industry may not have even considered. Entrepreneurs who would prefer not worry about those details can consider becoming a fast-food franchisee for a brand like Subway.
Since its first outlet opened here in 1996, Subway has become one of the most prolific fast-food chains in Singapore, with over 150 outlets across the island today. That’s comparable to the number of McDonald’s branches. The main reason for the high number of outlets is Subway’s franchise model, and the typically lower cost of owning a franchise, due to the limited need for expensive cooking equipment.
Read Also: 7 Subway Stores In Singapore Where The Menu Is Cheaper
Opening A Subway Franchise Starts At $127,900
The cost of purchasing a Subway restaurant depends on the size and location of the premises, but based on 2021 costs, the initial startup outlay starts at $127,900 for a kiosk or food court stall. Included in this are Subway franchise fee of $17,000, about $40,000 for the leasehold and the necessary improvements, and $35,000 for the equipment. The remaining $35,900 is miscellaneous costs including advertising, supplies and inventory.
For a typical outlet in a shopping mall, the outlay is closer to $284,000. This includes the Subway franchise fee of $17,000, $110,000 for the leasehold and necessary improvements, $85,000 for the equipment and the remaining $72,000 for miscellaneous costs.
| Type of Subway Outlet | Kiosk/Food Court Stall | Shopping Mall/Shophouse |
| Size | 30 – 40 square metres | 50 – 80 square metres |
| Subway Franchise Fee | $17,000 | $17,000 |
| Leasehold And Improvements | $40,000 | $110,000 |
| Equipment | $35,000 | $85,000 |
| Miscellaneous Costs (Advertising, Supplies and Inventory) | $35,900 | $72,000 |
| TOTAL | $127,900 | $284,000 |
But just before you think that’s all you need to open your first Subway branch, there’s a few other points you’ll need to take note of.
#1 You Are Not Guaranteed A Franchise
After receiving your franchisee application, Subway will check to see if you are eligible and will call you in for an interview to ensure that you are able to represent the brand well and are prepared for the long-term commitment of being a Subway franchisee.
Read Also: What Do You Need To Know Before Setting Up A 7-Eleven Franchise In Singapore
#2 Training And Support Will Be Provided
Once selected as a franchise owner, you will undergo an intensive training course that includes on-site training at a restaurant. This course typically takes 1 to 2 months.
Subway will also provide ongoing support, providing you with all you need in terms of restaurant design, standard operating procedures, marketing assets, furniture, ingredients and retail technology such as point-of-sale systems. This is to ensure consistency across all Subway outlets.
#3 You Are Responsible For The Location Of Your First Restaurant
While Subway has final approval of the location, the legwork needed to select the site of your first Subway franchise must be done by you. That said, Subway will have a team ready to help you by assessing the feasibility of the location and warn you of any traffic or layout blind spots that you may have overlooked.
Expect to spend 1 to 2 months finding a location and negotiating a lease with the landlord.
#4 You Are Responsible For Hiring Your Own Team Members
Subway provides guidance and guidelines on how many team members you will probably need based on your chosen outlet, and how to arrange shift schedules to ensure that the restaurant is open 7 days a week for a minimum of 98 hours per week.
However, the actual recruitment of team members is left to you, the franchise owner. Typically, only 3 to 4 team members are needed, due to Subway’s relatively simple bake on site operating model that doesn’t require deep frying or other cooking methods.
#5 12.5% Of Your Weekly Gross Sales Goes To Subway
Subway claims 12.5% in weekly gross sales from franchise owners. This is broken down into 8% for royalty fees and 4.5% for advertising fees. While this may seem relatively high at first, consider that Subway provides significant support, including selling you all the ingredients you need at a significant discount by taking advantage of the economies of scale.
Having been in Singapore for 30 years, Subway also provides a wealth of experience and information for all franchise owners, which is especially beneficial for franchisees without prior experience in the food and beverage industry.
#6 You Can Expect A Return On Your Investment Within Three Years
While no business model is completely foolproof, Subway estimates that most franchise owners see a return on investment within three years, although there are many factors to consider.
Beyond the tangibles like location and labour costs, a franchise owner’s management ability, time investment and relationship with the staff are also crucial in ensuring the franchise turns a profit.
Several Subway franchisees in Singapore are multi-unit owners, typically owning up to three outlets to achieve higher returns. One benefit of owning multiple outlets is giving your experienced team members from one outlet more opportunities to step up and manage operations in another outlet. This frees you up to take on a more holistic marketing and advertising role which can benefit all your outlets simultaneously.
#7 Despite Having Over 150 Outlets In Singapore, There Is Still Room For More Subway
It may initially seem like the number of Subway outlets in Singapore has hit saturation point. After all, McDonald’s also has about 150 outlets in Singapore as well. But with Subway’s franchise model, there is greater incentive for franchise owners to find a balance between cooperation and competition. Healthy competition between two outlets in close proximity to each other rewards efficiency after all.
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