Opening a Subway Is Surprisingly Cheap

Compare $262K to $2.3M for a McDonald's
By Matt Cantor,  Newser User
Posted Mar 22, 2015 9:49 AM CDT
Giants defensive end Justin Tuck surprises fans by making free subs at a local Subway on Tuesday, Dec. 3, 2013 in New York.   (Photo by Jason DeCrow/Invision for SUBWAY? Restaurants/AP Images)
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(Newser) – Want to open a fast-food restaurant of your own? For a McDonald's, startup costs will run you up to $2.3 million, Business Insider reports. But there's an easier route: Go with Subway, where the startup costs are less than an eighth of that figure, at a maximum of $262,850, the company says. As for your own cash, McDonald's wants you to have at least $750,000 in liquid assets, while Subway is content for you to be holding $30,000, with a net worth of between $80,000 and $310,000, Business Insider reports via data at Entrepreneur.

The flip side, however, is that McDonald's locations tend to come with annual revenues of $2.5 million, whereas Subways generate around $490,000; those figures come to Business Insider via QSR. OK, less revenue than McDonald's, but it's still pretty good for a restaurant business started by a 17-year-old in Connecticut who, per, was looking to raise some cash for medical school. Fred DeLuca, who started the first store with a loan of just $1,000, told Inc. a few years ago that his strategy is pretty simple: "I tell everybody there are only three things that we do. We build sales at the store level, we build profits at the store level, and we build more stores." (Subway last year was ranked among the healthiest restaurant chains.)

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