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Hi all,

I was wondering how much it would cost to buy a franchise such as Subway. The franchise fee is 6k but I guess on top of that the franchisee will have to buy all the equipment and rent the building etc etc.

Me and my partner will hopefully make a profit of 15k when we sell our 1st house.  Apart from this we will have no extra money though.  How much can you typically borrow off the bank for this type of venture?

Thanks

We have a poster on here called Subman who owns two shops give him a PM

My girlfriends brother owns 2 and is just about to open his 3rd. I think he would be happy to talk to you as well. Where abouts are you based ? 

Freddie are you talking about Paul.  I went up to Manchester with him on Tuesday and he told me his sister was on about some web site called laughing pig that her loan shark partner is always using!  Its a small world.

To answer the original post the total cost of opening a Subway is in the region of £120k.

Before you get too dispondant you dont need to have this amount in cash.  We had no savings when we started and used a £40k remortgage and an £8k loan from family.  All of the equipment can be leased secured on itself.

I know another person that started one with £40k of his own money, leased the equipment and got an unsecured loan for about £30k using the Government guarentee system.

When we started you couldnt get this type of loan for a food business but the rules have changed.  I dont know the ins and outs of this type of loan so you would need to take some advice.

I would think it would be possible but not easy to start one with £15k.  You would need to find out about the guarentee system and have a very good business plan.  Dont go to the bank and ask them for all the money as they dont make decisions only punch numbers into a computer and it wont add up for them.

You also need to do some serious research on Subway.  It doesnt suit everyone and its not always easy to make it work.  Use the Subway website to find your nearest development agent and go and see them.  Visit your local stores and speak to the people there.  I used to see alot of prospective franchisees and several have gone on to open stores.  I try not to do it now as I was getting alot of time wasters that hadnt even read the brochure off the website.

Subway has worked for us.  We have had our highs and lows but now after 4 years we are making a good living.  Our third store will open on the 23rd of this month and we are already planning more.

I know a rugby league player who has a couple up in Bradford, but he is serioulsy wedged in the first place. Massive earner from his rugby.

And now a clever lad to, invested well and his status as a local star attracts folk to the subway thinking they may see him...

I do like the idea os a sub franchise. Pity they dont serve chips with them though :)

When considering a franchise, you MUST ask yourself what's to stop you opening a similar business under your own name - and thus saving yourself the entire franchise fee.

When I'm looking for a sandwich, I couldn't care less what name is above the shop-front. If the shop and the staff and the sandwiches look clean and attractive that'll do for me.

By the way, the Subway shop in my home town looks pretty scruffy and seems to attract the sort of customers I wouldn't want to look at while I'm eating. I wouldn't set foot in the place.

£120,000 for s Subway franchise????? Take a fiver into Tesco's and you can buy enough stuff to make a lot of sandwiches! So just what are you buying for your £120K?

There's nothing special about the brand name. And do they have a miraculous sandwich-selling system that nobody else in the world could ever think of? Of course not.

The Subway franchise clearly works and their expertise must be worth something - but just how much is up to you to decide.

I doubt that anybody succeeded with Subway who wouldn't have succeeded with a fraction of the investment and a book called 'How to Run a Sandwich Shop'.

 

Rumpole,

You seem to have changed your views on Subway since 26th April.  You wrote-

"Having said that there are good franchises and the posts in this thread about Subway paint an encouraging picture. Im sure there's success to be had with Subway"

Tomorrow we open our third Subway.  Ive written several threads on the pro's and cons of Subway.  We have had a shop thats made money and one thats lost money.  Both are in profit now and I'm more than happy to commit to another.

The statements that several people make on SP about never buy are franchise are not very helpful.  I have read your posts and understand that you lost money on a franchise.  Shouldnt you be saying never buy into that franchise?  You never did name it, so no one reading the forums can gain from your knowledge and experience which is a shame as I bet it was hard earnt.

£120k for a Subway franchise - this is what it costs to get it up and running.  The franchise fee is 10k USD.  The rest is equipment and shop fitting.  Open any shop on this scale and you have to pay for it.  I have written other posts on the whether or not I believe you can have a similar business under your own name.  I wont repeat the full posts (you can look it up) but I believe you cant.  I also believe that it would not be possible for me to have started a business on my own and in four years have three stores and a turnover in excess of 1m.  Not starting with a 40k remortgage and no experience, except how to lock people up and drive a deisel Ford Focus with blue lights.

Not all franchises are the same and not all Subway stores are either.  I would like to think mine are ok but I bet there are days when people look in and think its untidy etc.  What I would say is if you are going to judge them it might be an idea to actually go in one and try the food.  If you want to eat for free come to Exeter and give me a call.

If anyone out there is genuinely interested in Subway I am more than happy to talk on the phone or arrange a visit.  I get nothing for it, before you say im on commision, other than expanding the brand.  Please if you are making contact to talk Subway I would expect people to have already made contact with Subway HQ, tried the food and read my posts.

My views on Subway haven't changed and I think my postings on the subject are entirely compatible with each other.

Subway is a 'genuine' franchise opportunity in that it's not a con or a scam or any kind of rip-off.

The business idea is simple enough: you spend a fortune opening a sandwich shop under the Subway umbrella and if enough people buy enough sandwiches, you make a profit.

Unlike many other franchises, a Subway franchisee at least has a fighting chance of making a living from his franchise.

My view is simply that it's possible to open an independent sandwich shop for a lot less money and make similar profits - and I'd advise any would-be Subway franchisee to look into that possibility. If, having considered all the options, you think Subway is the way to go, then so be it. It might be the right decision for you.

In the interests of accuracy, I should say that I have never made a loss on a franchise.

I bought my franchise for £6000 and was soon earning £150,000 per annum at the business.

I bought shares in the parent company and they went down taking £250,000 of my money with them.

Overall though, I made a huge profit on my original investment and, when I carried on my business under a different trading name with improved trading methods of my own devising, I was very successful and on one occasion I made £30,000 for 30 minutes work.

However, in the same way I'd advise people not to marry someone they've only known for a fortnight, I'd also advise them not to buy a franchise. In both cases, it would be general advice and subject to review when special circumstances presented themselves.

As we all know, some whirlwind romances work out extremely well - as do some franchises - which is why I say "Don't buy a franchise unless you're sure it's a very special one indeed'.