- Subway franchisees pay 12.5% of weekly gross sales excluding GST: an 8% royalty and a 4.5% advertising fee.
- Setup costs are lower than many quick-service brands, so labour and rent usually decide whether a restaurant is profitable.
- Many Subway purchases are resales of existing restaurants, which gives you real trading history to test.
Subway has traded in Australia since 1988 and is one of the country’s largest restaurant networks by number of stores. Its stores are compact, the menu is assembled rather than cooked from scratch and the upfront investment is modest compared with burger or chicken chains.
The flip side is a fee structure taken from gross sales and a dense network, so the economics of an individual restaurant depend heavily on location, rent and rostering.
Subway franchise at a glance
| Sector | Quick-service sandwiches and wraps |
|---|---|
| In Australia since | 1988 |
| Royalty | 8% of weekly gross sales, excluding GST |
| Advertising fee | 4.5% of weekly gross sales, excluding GST |
| Initial franchise fee | Reported at about $15,000 for a new restaurant |
| Total setup cost | Industry estimates range from about $195,000 to $520,000 depending on site and format |
| Common entry route | New restaurant or purchase of an existing restaurant |
Figures come from the public sources listed at the end of this guide and can change. Treat them as a starting point and confirm current numbers in the franchise disclosure document.
How the Subway model works financially
Subway’s fees are a fixed share of sales: 12.5% of gross sales excluding GST comes off the top every week, before food, wages, rent and other costs. Because the fees rise with sales, the profit you keep depends on controlling the costs below that line.
Labour is the largest controllable cost. Stores trade long hours with relatively small teams, so penalty rates on weekends and public holidays and the owner’s own hours make a big difference to the result. Food cost is managed through the system’s approved suppliers and portion standards, which narrows the range, but wastage and promotions still move it.
Rent varies widely between food courts, strips and transport sites. A low setup cost doesn’t help if occupancy takes too much of each dollar of sales.
The numbers to test before you buy a Subway franchise
- Weekly sales history and trend for the specific restaurant, not the network average.
- Occupancy cost (rent plus outgoings) as a percentage of sales, and the remaining lease term and options.
- A realistic labour budget at award rates, including weekend and public holiday penalties and your own hours.
- Whether a remodel or equipment upgrade is due under the franchise agreement, and what it will cost.
- Nearby Subway restaurants and planned openings that could affect your trade area.
- How delivery platform sales are treated for royalty and advertising fees, and the commission they cost.
Buying an existing Subway restaurant
Buying an existing Subway restaurant is common. The franchisor must approve you as the new owner, and transfer and training costs apply. Test the seller’s figures against BAS lodgements and bank statements, and check whether reported profit includes unpaid owner or family labour. Ask how long is left on the franchise agreement and the lease, because a short remaining term reduces what the business is worth.
How Franchise Co. can help with a Subway purchase
We work with buyers and owners of franchise businesses across Australia. For a Subway restaurant we can:
- Review the numbers before you sign. Our business due diligence starts from $2,000 + GST and tests the restaurant’s sales history, labour, rent and fee calculations against the disclosure document and the seller’s records.
- Set up the structure and the books. Entity choice, GST, payroll and a chart of accounts that tracks food, labour and occupancy as a share of sales each week. See accounting and tax and bookkeeping, BAS and payroll.
- Check your franchise fees. We reconcile royalty and advertising fees to the sales they’re calculated on. See royalties and franchise fees.
- Plan the next restaurant. If a second site is on the cards, we model the cash flow and funding first. See multi-site reporting.
Subway franchise FAQs
What are Subway’s franchise fees in Australia?
Subway charges an 8% royalty and a 4.5% advertising fee, a combined 12.5% of weekly gross sales excluding GST. There is also an initial franchise fee for a new restaurant.
How much does it cost to open a Subway?
Industry estimates put the total setup cost between about $195,000 and $520,000, depending on the site, fit-out and working capital. Confirm the current range in Subway’s disclosure document.
Is it better to buy an existing Subway or open a new one?
An existing restaurant has trading history you can verify, but you pay for its goodwill. A new restaurant costs less to enter but carries more uncertainty about sales. The right choice depends on the specific site and price.
What makes a Subway restaurant profitable?
After the 12.5% fees, profit mostly comes down to labour and rent. Restaurants with good sales relative to their rent, and tight rostering, tend to perform best.
Franchise Co. is an independent accounting practice. We aren’t affiliated with, endorsed by or connected to Subway or Subway IP LLC. Subway is a trademark of its owner and is used here only to identify the brand this guide discusses.
Sources and further reading
- Subway: Franchising FAQs (fees)
- Franchise Business: Subway royalty and advertising fees
- RosterElf: Cost to open a Subway franchise in Australia
- ACCC: Franchise disclosure document
Sources checked November 2026. Franchise costs and fees change. Confirm current figures with the franchisor before acting.
This guide is general information for people considering a franchise in Australia. It doesn’t take your circumstances into account and isn’t personal tax, legal or financial advice.
Talk it through
Every franchise is different. Ask us how this applies to yours.
