Is Subway a Franchise? Yes: Here's How It Works (2026)

Summary

Yes, Subway is a franchise: 18,773 US restaurants and zero company-owned. The 2026 FDD shows a $15,000 fee, 8% royalty, 4.5% ad fund, and no Item 19.

Contents

Key facts


Quick answer Yes. Subway is 100% franchised: the 2026 FDD reports 18,773 US restaurants and zero company-owned outlets at the end of 2025. The franchisor is Doctor's Associates LLC, a Roark Capital company. The standard franchise fee is $15,000, the royalty is 8% of gross sales, and the advertising fund takes another 4.5%.

The company that sells Subway franchises is not called Subway

It is Doctor’s Associates LLC, a Delaware limited liability company at 1 Corporate Drive in Shelton, Connecticut. That name sits on the cover of the 2026 Franchise Disclosure Document, issued April 30, 2026, where a buyer expects to find the brand. The entity converted from a Florida corporation to a Florida LLC on October 29, 2018, took the Doctor’s Associates LLC name then, and redomesticated to Delaware on May 29, 2024.

So the answer to the question is yes, emphatically. Subway is a franchise, and it is close to the purest example of the form in American retail. The 2026 FDD reports 18,773 franchised US restaurants at the end of 2025 and zero company-owned outlets, in that year and in the two before it. There is no corporate flagship, no company-run test market, no house account. Every US restaurant belongs to somebody who signed a franchise agreement.

The ownership above the franchisor is layered, and worth knowing before you read anything else in the document. On April 30, 2024, Underground Purchaser LLC, owned by investment funds managed by Roark Capital Management in Atlanta, acquired all equity in the franchisor’s former parent, in a transaction reported at roughly $9.6 billion. A securitization that closed June 20, 2024 then moved the US trademarks and the SubwayPOS software into an affiliate, Subway US IP Holder LLC, which licenses them back. Franchise World Headquarters LLC is now the manager and the franchisor’s franchise sales agent. The brand operates about 37,000 restaurants in more than 100 countries, most of them outside this document’s scope.

What the 2026 FDD actually charges

Term 2026 FDD figure
Standard initial franchise fee $15,000
Reduced fee (US veterans, qualifying existing franchisees, qualifying non-traditional) $7,500
Satellite restaurant fee $5,000
Royalty 8% of total gross sales, payable weekly
Advertising 4.5% of total gross sales, payable weekly
Sub Club loyalty fee 1.9% of gross sales on member transactions
Agreement term 20 years
Renewal fee 25% of the then-current fee, currently $3,750
Transfer fee 50% of the then-current fee, currently $7,500

That $15,000 is one of the lowest initial fees any national restaurant brand publishes, and it is the reason Subway has always read as the accessible option. The recurring column is where the brand collects. Royalty and advertising together take 12.5% of gross sales every week, before rent, before payroll, before a single loaf of bread. Add the 1.9% Sub Club fee on loyalty-member transactions and the franchisor’s share of a busy restaurant’s revenue climbs further. Most large quick-service systems sit between 8% and 9% combined. Subway is materially above that, and the low entry fee is what buys it.

$263,000 to $630,000, and what that number does not include

Item 7 line Low High
Initial franchise fee $15,000 $15,000
Real property (deposit and first month) $3,000 $12,000
Leasehold improvements $75,000 $250,000
Equipment, furniture, and decor $110,000 $210,000
Opening inventory $7,500 $15,000
Supplies and smallwares $5,000 $9,000
Additional funds, 3 months $15,000 $45,000
Total, traditional restaurant $263,000 $630,000
Total, non-traditional location $227,000 $458,000

Two lines deserve a slow read. The real property entry is a security deposit and one month of rent, nothing more. Item 7 estimates typical monthly rent at $1,000 to $6,000 for a restaurant averaging about 1,375 square feet, and none of that ongoing obligation appears in the total.

The additional funds line is thinner still, and the FDD says so in its own footnote: the three-month figure “is not an estimate of the working capital you will need,” and the three-month period “is not a representation of when you should expect to break even, if ever.” A franchisor writing “if ever” into its own Item 7 note is telling you something. Underwrite six to twelve months of reserve on your own numbers.

Buyers looking at more than one restaurant read a different set of figures. The multi-unit development program for two to ten restaurants runs $246,123 to $604,245 per restaurant, on a development fee of $22,500 to $82,500. Pull the full Doctor’s Associates data sheet if you want Items 5, 7, and 20 side by side rather than a recruitment page.

There is no Item 19, in 2026 or in 2025

This is the single most important thing a Subway prospect should take away from the document. Item 19 of the 2026 FDD contains no financial performance representation. Doctor’s Associates states that it does not make representations about a franchisee’s future financial performance or the past financial performance of company-owned or franchised outlets, and does not authorize employees to make them either. The 2025 document says the same thing.

Read that against what is easy to find online. Average unit volume figures for Subway circulate widely, and none of them originate in the disclosure document. If you are buying an existing restaurant, the franchisor may hand you that restaurant’s actual records, which is the only sales data the FDD contemplates you receiving. Our older piece on how closures distort any Subway sales average you get handed covers why a system this closure-heavy makes third-party averages worse than useless, and the pros and cons of the Subway system goes further into what the absence buys and costs.

Item 20 is where the story is

Year Franchised at start Franchised at end Net change Company-owned at end
2023 20,576 20,133 -443 0
2024 20,133 19,502 -631 0
2025 19,502 18,773 -729 0

The decline is accelerating, not flattening. The 20,133 count at the end of 2023 was already the brand’s lowest US footprint since 2005, and two more years took another 1,360 restaurants out.

The composition matters more than the total. In 2025 the system opened 499 restaurants, but a footnote discloses that reopenings of previously closed locations account for approximately 56% of that column, so genuinely new restaurants number a few hundred at most. On the other side, 1,026 restaurants ceased operations for reasons other than termination or non-renewal, 46 were not renewed, 4 were terminated, and 148 were reacquired by the franchisor. A further 792 locations sat temporarily closed on December 31, 2025. Table 5 projects 100 new franchised outlets in the next fiscal year against 93 signed agreements not yet open.

Transfers tell their own story. Restaurants changed hands 1,764 times in 2023, 1,416 in 2024, and 1,307 in 2025. In a system this size that is normal churn as much as distress, but it means the realistic entry point for most buyers is a resale rather than a new build, and a resale triggers a written remodel assessment that the franchisor must approve before consenting to the transfer.

No territory, and a remodel clock

Item 12 is blunt: you will not receive an exclusive territory, and there are no radius restrictions or population requirements limiting where the next Subway opens. The franchisor and its affiliates reserve unlimited rights to compete with you and to license others to do the same, including through delivery, internet, and other channels. In a system with 18,773 US restaurants, density is the historical complaint, and the document offers no contractual protection against it.

The decor standard runs on its own schedule. Fresh Forward 2.0 is the required package for all new restaurants and relocations, and existing restaurants must remodel to it, or an approved variation, on the timeframe set in the Operations Manual. If you buy a restaurant with an unmet remodel obligation, you have bought a capital call with a date attached.

One more line belongs in your diligence file. Item 20 discloses that during the last three fiscal years the franchisor signed confidentiality clauses with current or former franchisees restricting them from speaking openly about their experience. Item 3 discloses 47 actions plus 10 franchisor-initiated actions. Call franchisees anyway, including departed ones from Exhibit B-2, and ask directly whether they are free to answer.

What to pull before you sign anything

Get the disclosure document, then read Item 5 for which fee tier you actually qualify for, Item 7 with every footnote rather than the total row, Item 12 for the territory language quoted above, and Item 20 for the closure and transfer tables that no recruitment material will show you. Then call operators, including the ones who left.

If you are weighing the sandwich category rather than the brand, our comparison of Subway against Jersey Mike’s and Jimmy John’s scores all three off their filed documents. And the Doctor’s Associates data sheet puts the 2026 fee, investment, and unit figures in one place, read out of the FDD rather than a brochure.

Not sure which franchise fits you yet?

Take our free 2-minute quiz. Tell us your capital, experience, and goals; we surface the brands worth researching. When you've narrowed your list, our full FDD reports are $49.

Take the free quiz Curious what you get? See a sample report →

Take the Subway numbers with you.

We'll email you the Subway FDD data sheet: a one-page PDF with the Item 7 investment range, initial franchise fee, royalty, and the Item 19 revenue headline. No spam, unsubscribe anytime.

✓ Check your inbox

The Subway data sheet is on its way.

Get a Professional FDD Analysis — $49

The only franchise report written entirely for the buyer. 12 sections covering financial risks, legal obligations, and a personalized recommendation.

Browse Franchise Library See a real sample report →

$49 per brand · $99 for a 3-brand pack

Franchises you might be evaluating

Jani-King of California

Learn more →

Doctor's Associates

Learn more →

McDonald's USA

Learn more →

Keep reading

7 Brew Franchise Cost: $940K In, $2.55M Out, 578 Stands

Learn more →

7-Eleven Franchise Cost: What the 2026 FDD Actually Charges

Learn more →

Urgent Care Franchise Cost: What AFC Really Takes

Learn more →

is subway a franchisesubway franchise costDoctor's Associates LLCsandwich franchiseitem 19franchise disclosure documentbrand analysis

About this analysis The franchise data in this article is drawn from VetMyFranchise's structured analysis of 2,300+ Franchise Disclosure Documents filed with U.S. state regulators. See our data & methodology.

Frequently Asked Questions

Who owns Subway?

Subway franchises are sold by Doctor's Associates LLC, whose parent was acquired on April 30, 2024 by Underground Purchaser LLC, an entity owned by investment funds managed by Roark Capital Management in Atlanta. The transaction was reported at roughly $9.6 billion. A June 20, 2024 securitization moved the US trademarks and the SubwayPOS software into an affiliate, Subway US IP Holder LLC, which licenses them back to the franchisor. Day-to-day support and franchise sales are performed by Franchise World Headquarters LLC under a management agreement.

How much does a Subway franchise cost?

The 2026 FDD estimates $263,000 to $630,000 for a single traditional restaurant, and $227,000 to $458,000 for a non-traditional location. That includes a $15,000 initial franchise fee, $75,000 to $250,000 of leasehold improvements, and $110,000 to $210,000 of equipment, furniture, and decor. Qualified US veterans, existing franchisees in substantial compliance, and certain non-traditional operators pay a reduced $7,500 fee.

Does Subway disclose how much franchisees make?

No. Item 19 of the 2026 FDD contains no financial performance representation, and the same was true of the 2025 document. Doctor's Associates states plainly that it does not make representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. If you buy an existing restaurant, the franchisor may give you that restaurant's actual records. Every Subway average revenue figure circulating online comes from somewhere other than the disclosure document.

Are Subway locations closing?

Yes, on a large scale. Item 20 shows the US franchised count falling from 20,576 at the start of 2023 to 18,773 at the end of 2025. In 2025 alone, 1,026 restaurants ceased operations for reasons other than termination or non-renewal, 46 were not renewed, and 148 were reacquired by the franchisor. The document also discloses 792 locations that were temporarily closed as of December 31, 2025.

Does a Subway franchise come with a protected territory?

No. Item 12 states that you will not receive an exclusive territory and that there are no radius restrictions or minimum or maximum population requirements limiting where another Subway restaurant can open. The franchisor and its affiliates reserve unlimited rights to compete with you and to license others to compete with you, including through channels other than a restaurant.

Cite this page

Related on this site


This page is part of VetMyFranchise. View all pages: llms.txt · llms-full.txt

Site index for AI agents: llms.txt · sitemap