Subway Restaurants franchise owners, as well as entrepreneurs interested in investing in a Subway franchise, are on watch for what happens with a reported auction of the sandwich giant.
So far, however, the little news that has leaked has not been encouraging for Subway.
The New York Post reported Sunday that Subway has been forced to adjust bidding deadlines because of weak interest in the auction. Hopes that the company might sell for as much as $10 billion now seem unrealistic, with insiders forecasting a sale price closer to $7 billion, the Post reported, citing unnamed sources.
Initial bidding began in February. A second round reportedly awaits.
What’s the Average Income of a Subway Franchise Owner?
One question is how much a sale would affect Subway corporate’s relationship with franchise owners. Another question is whether other large franchise brands will bid on Subway. As it is, the most interested suitors appear to be large private equity firms, according to reports from the Post and Bloomberg News.
“Subway likely will be sold but price is an issue,” the Post quoted one source as saying.
Subway is one of the largest restaurant chains in the world. In an in-depth look at Subway and at how much an average Subway franchise owner makes, StartupNation found these key points:
- Initial investment in a Subway franchise is often lower than outlays for other franchises: Expect a franchise fee of $15,000 plus an estimated $207,000 to $477,000 to invest in a store, according to Subway’s estimates.
- Success depends not just on total sales, which can be affected by location, competition and other factors, but also on how well franchise owners manage labor, food and other costs.
- The benefit of Subway is not in owning a Subway franchise so much as owning multiple Subway franchises, according to several Subway franchise owners who posted about their experience on the StartupNation community forum. Posters say that multi-unit owners get the most out of the experience.
In early 2023, Subway confirmed that it had hired JPMorgan to explore a possible sale of the company. Coming off a strong 2022 that saw its same-store sales climb 9.2%, Subway said its strategy was paying off.
Also, and we just had to mention this, Subway made another bit of news over the Easter Weekend when its United Kingdom and Ireland division teamed with Cadbury to prepare and give away 500 “SubMelts.” The sandwich, or whatever you want to call it, was made using Subway’s Italian White Bread and smashing Cadbury Creme Eggs inside.
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