If you want to start your own business, a Subway franchise can be an ideal option. We all know how popular this fast-food chain is, so we will cover; requirements, training, profit, and overall Subway franchise cost in India.
Subway is one of the fastest-growing franchises throughout India and has a presence in more than 70 cities. There are more than 44,000 Subway restaurants in the world, and 500 of these are in India. Franchises from this brand have a lot of fans across the whole world, and because of that, this can be a good investment.
Subway Franchise Cost In India
The total cost to open a Subway franchise in India is between INR 6,098,000 and INR 11,979,400. This cost includes the initial fee of INR 650,000, and the ongoing expenses are the marketing fee of 3.5% and the royalty fee of 8%; these fees are paid from the gross revenue.
This is a high cost, but keep in mind that India’s average Subway franchise unit makes gross revenue of INR 118,000,000 per year and generates a profit between 7 – 7.5%.
It is not inexpensive to buy and set up a Subway franchise in India. You will need a lot of start-up capital, and you will also need to take into account the costs related to space rental, hire staff, etc.
All in all, it is wise to set aside around INR 12,000,000 if you wish to set up a Subway franchise properly. You will probably not spend all of these funds in the end, but this will give you some flexibility and financial security because it will take some time before your business starts generating revenue.
Subway franchise cost in India
- Estimated total investment: INR 6,098,000 – INR 11,979,400
- Initial fee: INR 650,000
- Royalty fee: 8% of the gross revenue
- Marketing fee: 3.5% of the gross revenue
How to Start A Subway Franchise in India
It isn’t all about the money; you need to pass the whole process before you are ready to open a Subway franchise in India.
Gather Informations About Subway
Start with finding pieces of information that are related to the Subway franchise in India. You must find out what is the cost, and what their franchise package and operation manual covers.
Consider speaking to other franchise owners to learn more about their experience. All knowledge collected from real owners is beneficial because they know all the advantages and disadvantages of the Subway franchise in India.
After gathering all the information, if you still think that Subway is the right choice for you, you can go to the second step.
Apply for Subway Franchise
To open a Subway in India, you will have to apply for a franchise, and after that, you will meet with a local Development Agent.
The Development Agent will be your guide; the franchisor representative will explain the whole process and answer all your questions. Also, he will tell you what financial requirements you as a franchisee must fulfill to start a Subway franchise.
Review Subway Franchise Disclosure Document
The franchise disclosure document or FDD is a document that gives insight to every potential franchisee about the operation manual, estimated return of investment time(ROI), and a lot of other informations that are closely related to the Subway franchise.
Take your time to examine the Subway FDD properly because this is the final step before signing the franchise agreement. Remember, the cost of the Subway franchise in India is not small, so you need to be well informed before you decide to open this kind of facility.
Also, you will need to find a location for the franchise. The best places to open Subway in India are in the big cities. The facility’s position must be in an area with a high fluctuation of people; malls, markets, etc.
Subway recommends that its franchisees possess around 350 square feet of space for customers and 170 square feet of food preparing space. You will also need to hire about eight staff members to handle the store operations properly.
Trying to run in a smaller space or with fewer staff members will seriously limit your ability to meet customer demand, so it is essential not to compromise on these two factors.
Sign Subway Franchise Agreement
Before the franchise operations can start, the recipient must sign the franchise agreement. The franchise agreement for Subway in India most often has 20 years duration. And, by signing it, you will get all the necessary support from the franchisor.
Subway in India provides to their franchisees:
- Financial assistance
- Help in choosing a location of the facility
- Operation manual
- Help with training
- Ongoing support thru the whole duration of the franchise agreement
Start Training
After Subway’s franchise agreement is closed, the franchisee must know that he now has some obligations toward the franchisor. Also, the franchisor has some responsibility toward the franchisee.
The franchisor must provide franchisee training sessions related to managing the Subway franchise in India. This training lasts for few weeks, and after that franchise will be ready to accept the first customers.
Subway provides excellent training, and it wants to ensure that all of its franchises uphold its excellent reputation. Because of this, every new franchisee will have complete Subway support in all aspects of business operations.
What Does Subway’s Training Cover
Even if you don’t know anything about Subway, the training will prepare you to set up a franchise, and after some time, you will be ready to run your own Subway franchise in India.
The training covers every aspect of running the business, and you will get plenty of assistance in the organization of your new store. The staff member from the franchisor’s head office will help with all details. Your franchise is now the representative of the Subway brand, and it is in their interests to train you well.
After the main training is completed, you will enjoy ongoing support from the franchise headquarters and the executive staff. Franchisor’s representatives will contact you daily, and they will help you in managing the facility.
How to Run a Subway Franchise in India
You must be prepared for a fast-paced and customer-focused environment to run this kind of store. Your team must be at the peak of the game, so hiring reliable, friendly, and hard-working employees will be crucial.
It can help if you have been working before in the Subway franchise in India. This will give you significant and valuable insider knowledge about the requirements and the general atmosphere around this brand.
The advantage of Subway is that there is minimal “cooking” involved; you do not need to grill or fry food. This will reduce kitchen risks, and the customers will get food faster.
However, there are many fresh ingredients in the kitchen, so food hygiene standards must be extraordinary. Subway franchises in India usually have separate kitchens to ensure that non-vegetarian food does not contaminate vegetarian food.
The many vegetarian dishes served in Indian Subways are something that you would not see anywhere else in the world. Aloo Patty and Paneer Tikka are just a couple of the custom-made dishes that your customers will be able to enjoy.
This shows that Subway company can fulfill the needs that the Indian market has, and because of that fact, it is one of the most popular franchises among Indian customers.
Advantages of Starting a Subway Franchise
The Subway is often considered a “simple” fast food store to run. This is because they do not involve much food heating, and they focus on one food type (sandwiches) rather than having multiple different offerings.
That means you can train staff more quickly, and you will have fewer regulations and safety issues that you must fulfill. Although the subway franchise is by no means a simple business venture, it is a lot simpler than many other restaurants that offer franchising options in India!
The cost of starting a Subway franchise in India is relatively low when it is compared to other well-known and recognizable brands. Although it is not a small sum of money, this is one of the best opportunities for the opening franchise in India.
This business venture is a good choice for entrepreneurs who wants to try their hand at business without taking on enormous risks.
Subway Franchise Profit in India
Subway franchise units in India can make a profit between INR 2,500.000 to INR 25,000.000. It all depends on store location, the location where is a higher fluctuation of people will ensure higher gross revenue; 7% of gross income is a profit of Subway franchise.
Subway franchise in India can be profitable even at 40% of its full operation capacity; as long as you can achieve this, you should not worry.
The Subway franchises across the globe make over 11 billion dollars per year. And this makes them one of the most successful fast-food chains, so this talks a lot about their overall profitability. Also, there is a lot of stories from owners who are making ₹1.5 crore profit with the Subway franchise per year.
Summary
For starting a Subway franchise in India, you will need significant investment funds. But this business venture can be very profitable because this brand has a large base of loyal customers.
The initial fee cost for the Subway franchise is INR 650,000, but you will need significantly more funds to make a fully functional store ready for customers. Every start is complex, and starting a subway franchise is not an exception. But in the end, it will all pay off because this brand knows how to do business, and they are willing to share that knowledge with their business partners.