Overview
Subway is a US-origin fast-food chain specialising in submarine sandwiches, wraps and salads assembled to order. Its core proposition is customisation: customers choose bread, fillings, vegetables and sauces, although the company has increasingly promoted named sandwiches with prescribed recipes. Restaurants operate in settings ranging from high streets and shopping centres to transport hubs, petrol stations and university campuses.
Franchising is central to the business rather than a supplementary expansion channel. Subway describes its restaurants as independently owned and operated by franchisees. The brand supplies the operating system, marketing and product framework, while local operators run the outlets. Its relatively flexible restaurant format has helped it develop one of the world's largest restaurant networks.
History and growth
The business began in Bridgeport, Connecticut, in 1965, when Fred DeLuca opened a sandwich shop with financial backing from Peter Buck, a nuclear physicist. Initially called Pete's Super Submarine Sandwiches, it later adopted the Subway name. The founders started franchising in 1974, with the first franchised restaurant opening in Wallingford, Connecticut. This approach allowed expansion without requiring the company to fund and operate every new site.
Subway subsequently grew across the United States and overseas through local franchisees and regional development arrangements. After decades under the ownership of its founding families, the company was acquired by affiliates of private equity firm Roark in April 2024. The transaction marked a major ownership change, but franchising remained the foundation of its operating model.
Global footprint
Subway reported around 37,000 restaurants in more than 100 countries and territories as of September 2023. This is a dated benchmark, not a live outlet total: openings, closures and transfers continually alter the estate. The United States remains its largest individual market, while substantial networks operate in countries including Canada, the United Kingdom and Australia. Corporate headquarters are in Shelton, Connecticut.
The network's development is uneven. Subway's US restaurant count has contracted from its historical peak, while international development agreements provide routes into new markets and further growth in existing ones. Large outlet commitments announced under such agreements should not be confused with operating restaurants; they generally describe development plans over several years.
How the franchise model works
A Subway franchisee operates under a contractual licence to use the brand and its business system. Responsibilities typically include securing an approved location, recruiting staff, managing day-to-day service and maintaining food safety and presentation standards. Franchisees must follow requirements governing products, equipment and approved supply arrangements. Subway provides training, operating guidance and marketing support, although the precise division of responsibilities varies by market and agreement.
International expansion also uses master franchise arrangements, under which a partner undertakes development responsibilities in a defined territory. Subway has increasingly emphasised experienced multi-unit operators alongside its established base of smaller franchisees. Prospective applicants should distinguish between acquiring an existing restaurant, opening a new outlet and entering a larger development agreement: each presents different operational demands.
Investment and requirements
Subway has publicly quoted a US initial franchise fee of $15,000, together with an ongoing royalty of 8% of gross sales and an advertising contribution of 4.5%. These are reference figures for the US system, not universal terms or the total cost of opening. Applicants should confirm current charges in the relevant franchise disclosure document and local agreement, including any qualifications or additional obligations.
Overall investment depends on the market, premises, restaurant format, building work, equipment and working capital. There is no single worldwide investment figure. An existing outlet may also require refurbishment or replacement equipment. Prospective franchisees should request current franchise disclosure documents and an itemised investment schedule, rather than relying on the franchise fee alone. Financial eligibility, training and operating requirements should likewise be checked with the relevant Subway development team.
What franchisees should consider
Location quality matters more than the size of the international network. Relevant considerations include local footfall, lunchtime demand, visibility, delivery coverage and competition from nearby Subway restaurants as well as other food businesses. A compact format can widen the choice of premises, but it does not remove exposure to rent, labour, ingredient and utility costs. Franchise fees and advertising contributions also need to be understood within the restaurant's full cost structure.
Menu changes, promotional pricing, digital ordering and delivery platforms can affect both sales and workload. Refurbishment requirements may introduce further expenditure during ownership. For an existing restaurant, its trading history, lease position and equipment condition deserve particular scrutiny. Public information about brand-wide sales or growth is not evidence of the likely profitability of an individual outlet.
Competitive landscape
Subway competes most directly with sandwich specialists such as Jersey Mike's Subs, Jimmy John's and Firehouse Subs. These businesses contest similar lunch and takeaway occasions, although their menus, preparation methods and geographic reach differ. Arby's is another relevant competitor in the US sandwich market. Beyond specialist chains, Subway competes with burger restaurants, bakeries, convenience stores, independent sandwich shops and prepared-food counters.
Its principal advantages include widespread recognition, a large established estate and a format adaptable to different locations. Those strengths do not guarantee local demand or pricing power. Competitors can differentiate through perceived ingredient quality, service, hot food or value. Subway therefore has to balance its familiar customisable offer with menu development and consistent execution across independently operated restaurants.
Outlook
Subway's direction combines international development with efforts to improve the experience and performance of existing restaurants. Recent initiatives have included menu changes, restaurant modernisation and investment in digital ordering. Its Subway Series range, introduced in the United States in 2022, illustrates a shift towards promoting signature sandwiches alongside traditional customer-led customisation.
The central question is whether these changes produce a stronger proposition for customers and a more sustainable operating model for franchisees. Roark's ownership brings the brand within an investment portfolio with extensive restaurant interests, but does not establish future outcomes. For prospective operators, the most meaningful indicators remain local trading conditions, the obligations attached to a particular agreement and the economics of the proposed restaurant.
Subway franchise: frequently asked questions
How much does a Subway franchise cost?
Subway has publicly quoted a US initial franchise fee of $15,000, but this is only one part of the investment. Premises, building work, equipment and working capital add to the total, with costs varying by format and market. Prospective franchisees should request the current franchise disclosure documents and an itemised investment schedule for their intended location.
What ongoing fees do Subway franchisees pay?
Subway has publicly quoted a royalty of 8% of gross sales and an advertising contribution of 4.5% for its US system. These charges are separate from everyday operating expenses and the initial franchise fee. Terms can differ between markets, so applicants should confirm current rates and any additional obligations in the relevant disclosure documents and agreement.
How many Subway restaurants are there?
Subway reported around 37,000 restaurants in more than 100 countries and territories as of September 2023. That figure is a historical reference rather than a current running total. The estate changes through openings and closures, and restaurants promised under long-term development agreements are not necessarily open or included in the operating network.
Who owns Subway?
Subway was acquired by affiliates of Roark, a US private equity firm, in April 2024. Previously, it had remained under the ownership of its founding families. Ownership of the brand is distinct from ownership of individual restaurants: Subway describes its outlets as independently owned and operated by franchisees.
What experience is needed to become a Subway franchisee?
Applicants should confirm the current experience, financial and training requirements with Subway in their intended market. The company has increasingly emphasised experienced multi-unit operators, particularly in larger development arrangements. Running a restaurant requires staff management, food safety oversight and cost control; opening one outlet and committing to a multi-restaurant programme involve different levels of operational responsibility.
Latest Subway news
12 October 2026
Subway launches US Halloween giveaway of $15 digital gift cards
The promotion runs from Oct. 12 through 16, linking Subway’s new advertising platform to a company-commissioned survey about Americans’ dissatisfaction with lunch.
Figures are approximate and based on publicly reported information as of 2023. Franchise costs and terms change; prospective franchisees should obtain the brand’s current disclosure documents and take independent legal and financial advice. Profile updated October 2026.