written by Khatabook | February 16, 2022

Complete Guide to starting a Subway Franchise in India

Subway is an American fast-food franchise founded by Peter Buck and Fred Deluca in 1965. As of June 2021, Subway has over 37,540 outlets across the globe. Subway's Quick Service Restaurant (QSR) business model entered India in 2001. 17 years after their entry in India, Subway Franchise in India expanded itself to 500 franchise outlets in 68 Indian Cities.

Subway aims to grow its QSR Franchise India to 2000 franchise outlets in various Indian cities. To make this happen, they're looking for aspiring entrepreneurs to represent the Subway Franchise in India and walk on the path to success. Subway Franchise India is charging only a small sum as its franchising fee. This is a very good opportunity for entrepreneurs looking for low-cost franchises in India. Using the right strategies, the Subway franchise can help any entrepreneur earn a handsome income of ₹20 lacs per month. Keep reading to find out more on how to get Subway franchise In India and about Subway franchise cost and profit

Did you know?

Subway serves every minute a whopping 5,300 sandwiches or 7.6 million subs daily on a global basis. This is more than enough to feed the population of 3 US cities altogether!

About Subway

The Subway Journey

Subway was founded on 28th August 1965 in Bridgeport, Connecticut, USA, under the name of Pete's Super Submarines. It was later renamed Subway in 1968 and incorporated under a holding company called Doctor's Associates. This company oversees the entire subway chain of restaurants in the world! 

Mission or Vision for QSR franchise India

Subway's mission is to exceed customer delight through their fresh and delicious sandwiches and provide an exceptional food experience that they can enjoy with their close ones. Much like its competitors, they're also aiming to become the #1 QSR Franchise in the world. 

Why a Subway franchise?

The franchise of Subway is a low-cost offer to partner with the fast-food giant. It is a secured way of earning a decent profit as your ROI. So what reasons make the Subway franchises a low-risk venture? 

Here are some of the reasons

  • The Subway QSR chain is second to McDonald’s, which is the world’s largest chain of Quick Service Restaurants. 
  • Subway has a total  of 37,540 restaurants globally, with 611 stores in India.
  • Subway meals or Subs are made from freshest vegetables and ingredients as their franchise agreement pledges to offer the freshest and highest quality meals.
  • Subway franchises have been growing rapidly and deemed very profitable by investors.
  • The franchisee offer is flexible and accommodative with the space requirements for the franchise offer.
  • The franchise for Subway agreement  also includes marketing support, personnel training support, and support from the Subway franchise headquarters in India.

Subway franchise cost and profit

The Subway India franchise has given a very reasonable offer and charges only ₹6,50 lacs as the franchise fee. Although after considering various factors such as location, renting, building modifications, decor, etc, the Subway franchise cost could vary from ₹6 lacs to ₹11.9 lacs. Other than this, the Subway franchise of India also charges 3.5% to 8% of the annual turnover, including the advertisement and royalty charges. But all that is worth it because one can expect 30 to 45% profit in the shortest possible time of 24 to 30 months.

Also Read: How to Start a Cafe Coffee Day Franchise in India?

Eligibility Criteria and Requirements for Setting up Subway Franchise in India

The Eligibility criteria, responsibilities, and requirements are as follows:

Eligibility criteria

Subway franchise offers have a proven model of business and worldwide brand recognition. That’s why any franchisee that looks to be one of the selected Subway family members should have the following qualities.

  • The franchisee must have an entrepreneurial outlook and preferably some experience in the food business.
  • The franchisee must meet the Subway franchise price in India fee requirements.
  • The franchisee must also be committed to investing in the Subway offer and steer the venture to being a successful one.
  • The franchisee should have a good reputation and be customer-oriented.
  • Since learning new skills and training by Subway is involved, the franchisee should be prepared to learn on the job and also enjoy taking up new challenges.
  • The aspiring franchisee entrepreneur should be passionate and have absolute faith in the business model and products. 

Franchisee Responsibilities

A Subway franchisee will need to accept the responsibility of

  • Providing the initial Subway franchise fee of ₹6.5 lacs.
  • Finding the best location agreeable to Subway to open the restaurant at.
  • Making arrangements for the equipment, installation, leasehold interior improvements, décor, etc.
  • Employing staff and employees is required for the smooth operation of the QSR.
  • All Subway franchisee operators have to pay 12.5% of the gross sales minus the sales tax every week. Of this, 8% is treated as a royalty fee and 4.5% is used to meet advertising expenses.

What are the requirements?

Setting up a Franchise for Subway has many requirements but most of them are basic requirements such as:

Space requirements

The location of the franchise of Subway in India is one of the most important performance factors in the franchise agreement besides how well the entrepreneur runs their business. Subway franchises have both nontraditional and traditional locations for their stores. By a traditional location restaurant, you must understand it is on a street corner or in a shopping mall. The non-traditional location means is at or close to a hospital, airport, truck or rail stops, a school or college, etc, which also have other businesses. Individuals should only open a franchise in a non-traditional location if they have experience of handling franchises or businesses in an area with tough competition.

A minimum space of 300 to 600 square feet with very visible frontage is required for the QSR Business. If renting your space, bear in mind that the rent will be high in prime localities. It is suggested to allocate an amount of minimum ₹50,000 to ₹1 lacs towards prime property rents in major cities like Bangalore, Chennai, Mumbai, etc. This amount adds up to the Subway franchise price in India. 

Manpower requirements

A total of 8 to 10 employees are required to run the store and their salaries need to be accounted for in your working capital as concurrent running expenses. 

Total Capital Requirements

The total Subway franchise cost India depends on the size, location, and extent of décor or building renovation that is needed. Lower costs result from the building and location requiring lesser seating, leasehold improvements, and equipment expenses whereas moderate to higher costs always mean more expenses on seating, leasehold improvements, and equipment. The operational expenses of a Subway QSR can range from ₹1 lac to ₹1.5 lac.

Here is a table that indicates the capital requirements for the Subway franchise cost with low, moderate, and high-cost models.

Particulars

Amount in ₹ low-cost

Amount in ₹ moderate cost

Amount in ₹ high cost

When to be invested

Initial fee for Franchise

625,000

625,000

625,000

One time lumpsum fee on signing the agreement

Building and improvements

600,000

850,000

1,380,000

Depending on the construction schedule and on a pro-rata basis

Equipment

3,000,000

4,060,000

5,964,000

On placing the order lumpsum payment

Installation of security system with no monitoring included.

40,000

60,000

60,000

On placing the order lumpsum payment

Location-based freight charges

45,000

50,000

155,000

On placing the order or delivery lumpsum payment

Outside signage

75,000

75,000

75,000

On placing the order lumpsum payment

Inventory

120,000

170,000

250,000

Lumpsum payment within a week of opening

Insurance

25,000

28,000

35,000

Incurred before store launch

RM supplies

20,000

25,000

50,000

Incurred before store launch

Training, lodging & travel expenses.

100,000

100,000

100,000

Incurred during training

Accounting & Legal fees

40,000

50,000

70,000

Incurred before store launch

Launch and advt costs

80,000

100,000

150,000

L/S near the launch of the store

Misc spends like registrations, deposits, licenses, working capital, small equip., etc.

50,000

50,000

200,000

Incurred when required

Additional WC for 3 months

350,000

350,000

500,000

Lump sum as required

Est. Total Costs

5,370,000

7,043,000

10,414,000

 

Real estate lease

200,000

450,000

800,000

Lumpsum upon signing intent of leasing.

Note: The average opening time for the Subway outlet is 6 to 7 months.

How to Open a Subway Franchise?

Follow this procedure to open your Subway Franchise.

  • Firstly contact Subway for the franchise brochure containing all details of their agreement and franchise offer.
  • Next, submit the online filled-in Application Form to get a Franchisee agreement for the area you desire to establish your venture in.
  • The application form is available on their website and can be filled out online or downloaded and filled offline too. It is always better to download the application form, do your research, fill in the form, and then submit it.
  • Submit the filled-in application form to  Subway head office India @ Subway Systems India Pvt Ltd. at B 11/1 of the Okhla Industrial Area- Phase II in New Delhi with Pincode 110020. You can also call them on 011 41708082 or 41754035 or email them at sa_development@subway.com.
  • Contact and meet the local Subway Field Developme nt Agent.
  • On being offered a Subway franchise, you must carefully review the agreement and its clauses containing the Full Disclosure Documents.
  • Do your own research and market study before you establish your future Subway restaurant.
  • It is ideal if you can self-finance the deal. If not you must secure finance from the banks, investors, etc.
  • When you are ready and are confident of moving ahead, sign the Franchise Agreement with the Subway authorities and make their franchisee-fee payment.
  • Use their support and training model to get prepared for your store’s launch.

Support offered to Subway franchisee in India

Subway understands that its partnering franchisee is a crucial part of their business, hence they provide all the necessary help to their partners to grow along with them. There are many things in which Subway assists its franchisee and to understand them better, we’ve split them into two parts, namely - assistance before store launch and post-launch assistance. Let’s take a look at what either of them offers:

 A. Before the store launch

  • Training: A 2-week training program comprehensively covers all aspects and the Manager or franchise owner must participate. 
  • Outlet design: The franchisee gets the design and floor plans from Subway and they must build as per these requirements.
  • Décor: The SUBWAY look and décor is standardized and provided. It uses natural building materials and the “Fresh Forward” décor is a must for all franchisees. The owner of the franchise has to bear this cost and all expenses entirely.
  • Location selection: Subway will evaluate, inspect and approve the location with you.
  • Equipment sourcing: Guidance, vendor list, installation assistance, etc are provided by Subway.

B. Post store launch

  • Operations manual: The complete Subway franchise cost in India 2020 manual is provided and covers all topics that impact the business and franchise agreement.
  • Field support: The local field agent assists, advises and helps you on all operational matters and how to get started.
  • Franchise services: A franchise coordinator is assigned as a point-of-contact and serves as being just an email or phone call away at all times.
  • R & D: The franchise of Subway also includes the specialized services of a staff nutritionist, ‘Sandwich Artists’, executive chef, product development team, baking specialists, etc.
  • Continued Learning: Continued learning is achieved through emails, newsletters, DVDs, voice-mails, seminars, etc.
  • Tech Support: A support system is in place for accounting, tech matters, equipment service, formulae access, and more.
  • Advertisement and marketing support: Subway India helps its franchisees gain momentum by offering advertisement and marketing solutions through advertising on regional and national media, cooperative advertising, and many other marketing solutions.

Also Read: Barbeque Nation Franchise Cost

Conclusion

Now that you've gone through this article, you must've realised how easy it is to get started with the Subway Franchise in India and that almost everything is taken care of by Subway India. Considering all that, you might agree that it is a very good opportunity and also pays handsomely if you plan well. We've mentioned a few profitable strategies that any Subway Franchisee can consider.

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FAQs

Q: What are the essential steps for the Subway franchise opportunity?

Ans:

The essential steps are to attend the seminar for prospective franchisees, apply for a franchise operation, research the opportunity and join the elite Subway team.

Q: Do I get assigned an individual DA?

Ans:

If you attend the online Subway Franchise Seminar, you meet your assigned Development Agent who assists, discusses and reviews the franchise opportunities with you.

Q: What qualities should a DA of Subway possess?

Ans:

Some of the qualities required for a successful DA are

  • Leadership capacity
  • Restaurant and brand Subway development vision and passion.
  • Local language and market knowledge with great communication skills.
  • Good organization skills and lots of hard work to build a successful territory.

Q: What is the role of the Development Agent?

Ans:

The Development Agent is assigned to help the franchisee operate and own the Subway outlet. The DA is approved by Subway and is an independent contractor with plentiful experience.

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