Subway

Item 7 in the 2025 FDD outlines initial investments from $238,625 to $536,745 per unit, covering build-out, equipment, and inventory for those iconic sub shops. Ongoing fees bite hard at 8% royalty plus 4.5% ad fund, tacked on with $75/month tech fee, $57/month POS hardware, and $1,000-$6,000 annual insurance—equating to $83-$500 monthly. No Item 19 disclosure means no official revenue or profit figures, forcing buyers to dig into alternatives like the 1,847 SBA loans averaging $265,828 with a modest 5.1% default rate, suggesting decent financing access but potential cash flow strains in a high-fee environment.

System health flags concerns: locations dipped 3% from 20,133 in 2023 to 19,502 in 2024, signaling contraction amid competitive pressures from fresher rivals. Litigation is hefty—50 actions likely from franchisees and 34 franchisor-initiated against them—pointing to operational disputes that could erode unit-level profitability. For a buyer eyeing multi-unit plays under Roark Capital's ownership, probe recent FDD trends on renewals/terminations, validate local real estate viability in Shelton, CT headquarters markets, and cross-check unverified earnings via franchisee networks to gauge if Subway's scale still justifies the hefty upfront and ongoing costs.