Singing Pig

Hi

Im looking at Investing in a Subway I have done plenty of reading and research etc

My question is :

 I have 50k , do you need £100-20k to set up or can you invest the 50 and arrange some kind of repayment scheme with Subway !

 Any information and figures on this would be a huge help, going to speak to my local agent on Monday.

Many  thanks

PM 'subman' if he doesn't see this, he has a few subways.

Craig

hi

i owned subway stores in 2004-2006, the figures may now be different but i would suggest you would be looking at around 150k (dont forget VAT even though you can reclaim it) to open the doors including opening stock, training etc etc. subway dont do any financing themselves but can introduce you to leasing companies / banks etc. we got a commercial loan from nat west over 20 years (the life of the franchise agreement)

most banks will lend on subway subject to status etc.

speak so subman - he's far more up to date than me.

regards

leighton

Gaz

50k should do it.  There was a previous post about how much cash you actually need for Subway

http://www.singingpig.co.uk/forums/thread/128907.aspx

Have a look at it and if it doesnt answer all your questions post them up here.

I see you are a new user of SP.  There is a search facility top right.  You can also click on the number of posts below a users name and read everything they have ever written.  You can also bookmark posts or users into your favourites to make them easier to find later

Stuart

That post actually made me join this forum !

So is the above information correct you have to get a bank loan, or do Subway offer any support.

Will have a search through the site see what I can find.

Many thanks

Subway dont help with money they just collect it from you !!!!!! lol

The equipment you can finance through leeds leasing (they have changed their name but I cant remember what to) or lombard natwest.  If you go the lombard route its a form of HP and you can claim the vat back in the first quarter.

You go to the bank and set up an account and as much overdraft as you can squeeze out of them.  If you have 50k unemcumbered by remortgage they may even give you a loan for the whole lot.

 A bank loan in my opinion would be preferable as you can repay it early if things go well.  I tried to pay off some of my leases early and the penalties didnt make it worth while.

If you have 50k I dont think you will have a problem.

Your real problem will be finding a good site.  I have always had a philosophy that you chase the deal first and if its good enough the money will come from somewhere.

The way things are with Subway now I would find a site first before buying a franchise.  There are so many franchisees with spare franchises.  In my area there are 10+ unused ones waiting for a location.  Subway are not selling franchises in the South West to anyone new anymore.  They dont need to.

Stuart

dear gazt,

have seen your post and thought drop you a line as i am in the same boat as you are.

i am based in wales and planning to open a subway. i think i can help a bit with finance as we owned 2 dominos pizza and just recently sold it to my partner.

banks are usually give you up to 70% loan in case of a franchise. in fact we got 75% loan when we opened the 2nd store as the first one was established and the bank has faith in us and presented great figures which actually exceeded our expectation (p&l, business plan, balance sheet)

if you do not want to or cant put up any security there is a scheme called small firm loan guarantee scheme which is backed by the government and you are most likely to be eligible for that. as you mentioned you have 50k that represents  25% depending how much money you wish/need to borrow. (you mentioned 200k)

this comes a bit expensive, usually LIBOR +2-5%, when we opened our 2nd Dominos Pizza we have got it for Libor + 1.85%.
and you can negotiate repayment holiday usually for the first or first 2 years, while hopefully your business gets a little bit more established and get through the inital hurdles

when arranging bank finance make sure you will take your VAT into account(even though this is reclaimable after the first quarter) and make sure you have some money left in the bank as working capital for training, wages, first quarter rent, marketing, extra food etc. try to get as much overdraft as you can, always handy.

it is always better to ask more than go back in a few months time and try to squeze more money out of the bank as this does not look too good and not professional either.

just spoken to a Subway franchisee in my area and he mentioned that he opened his 2nd store about 6 months ago and asked the bank an extra 40k which he did not need that time but planning to put that money towards the opening of his 3rd store in the near future, so basically the bank will finance it all for him.

also one advice it is best to go to banks which has got a dedicated franchisee divison with experts as they do understand your needs and they will not waste your time, more importantly they want your business as much as you want their money. 

i honestly can say our manager is a pleasure to work with, and had no problem obtaining 160k x2 for the two stores.