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How much does a Subway franchise owner earn?

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Answer

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Wiki User
02/23/2011

And in the UK

We have 83-90% of all sales are VATable, leaves.

Royalty at 12.5-13.5% (depending on location in UK)

Food costs are now 30-33%

Vat on sales account's for about 17.5% of all sales (average 85%of sales hot or eat in HMRC investigation 2009 BTW Subway lost the appeal)

Labour costs around 22-28% (excludes holiday and sick entitlement)

Breakdown:

30-33 % Food Gross Sales

24% Labour Gross Sales

17.5 % to HMRC Grosss Sales

12.5 % to Subway Gross Sales

£400- £600 a month utilities

High Street Rent average £1700 PCM (waste disposal, accountancy, insurance, repairs wear and tear e.t.c)

Oh and the average Subway store sales are around £5500.00

Here's the breakup:

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Royality + marketing = 12.5 % of gross sale

Food Cost = 28 to 31 % of gross sale

So the average 40 % of gross sale is gone for above too.

Rest 60 % of gross sale is spent on :

Rent, Electricity, insurance, garbage, telephone , accounting,employee's salary, misc).

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Here's the example:

If you have Subway of $1000 (365k yearly) as an average sale per day, Here's the breakup:

40% of 365k for Royality and food : 146,000

4000 average rent for 12 months : 48,000

Electricity, insurance average for 12 months(1400*12) = 16,800

Garbage, telephone , accounting misc for 12 months(500*12) = 6000

Employee's salary for 12 months ( 5000*12) = 60,000

Sale Tax(NY) 8.5% on gross sale = 29,200

Net profit before tax = 59000

(365000- (146,000+48,000+16,800+6000+60,000+29,200)

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Your profit can increase or decrease by Rent and Employee's salary.

The average selling price of SUBWAY with above gross sale is 200k+.

Experience shows that leaving your job and investing in SUBWAY with

similar sale is advisable if you also plan to work in store and save salary

expense. Owners of Subway with sale below 300K yearly are not making deserving profit and their are tons of them available in market.

See the following article. Gives a good backdrop and analysis on Subway: http://thefranchisehound.com/?p=266