You are presently looking into a franchise venture and your target is the Subway fast food or sandwich shop. No matter how you look into your bank account, you know that the amount therein would not suffice for the Subway franchise cost. You are not alone in that dilemma. Many people who are considering a franchise will often lack the upfront required capital.
The Subway franchise cost or fee can easily be put up as this is not too big. What may take a big chunk of your money are the other associated costs; in fact your savings may not even be enough for these. Do not panic because there is one option, financial assistance from various lending institutions.
Making an estimate of a Subway franchise cost
The Subway franchise cost is just a part of the total capital requirements in setting up a Subway restaurant. The total investment is highly dependent on the chosen location or site of the business. Locations are either traditional or non-traditional with the former costing several thousand dollars more. Per assessment provided in the Subway website, traditional locations will require a total investment ranging from $114,800 to $258,300. If your chosen location is non-traditional, you can expect total cost from $84,300 to $200,100.
What does the quotation include? Aside from the franchise fee, you will spend more on associated costs consisting of construction and equipment costs as well as operating capital. This though does not include exterior renovations. The stipulated amount assumes that you can be granted equipment leasing. If not, you should set aside $49,500 to $72,000 for the Equipment Lease Security Deposit.
Benefits in having the franchise financed
Many investors interested on franchising do not push through with their project simply because they are adamant in securing debt. Even if you have enough funds for the whole project, it is still best to have some amount as reserve for unexpected expenses. When your franchise is partially financed, you are leaving some amount in the bank for emergency business expenditures. This gives you more liquidity for operation. If you go for the lease agreement, you will be able to handle your finances appropriately for debt servicing. This will make you properly estimate the return on investment.
In search for the lending company
Your question is whether lending is available for the franchising of a Subway restaurant. When you apply for the business franchise, the company may provide you with the list of accredited lenders. Usually, the recommended lenders already have experience with previous franchisees. You will be free to choose the institution from the list that will be provided by the development office of Subway.
Although financing is recommended, the company does not encourage you to secure a huge level of debt. It would not be sound business practice. The amount that you should borrow should not exceed half of the total Subway franchise cost. It is then half and half, half of the funds from your own funds and half from borrowing or debt servicing.
Franchising a Subway restaurant is a good business venture simply because franchisees had asserted the profitability of the investment. The ROI is good and the total Subway franchise cost is not too huge. The best part is that the Subway Company even helps you secure financing if there is need for additional capitalization.