Subway vs McDonald's Franchise Comparison

Below is an in-depth analysis and side-by-side comparison of Subway vs McDonald's including start-up costs and fees, business experience requirements, training & support and financing options.

Start-Up Costs and Fees
 
Subway Franchise
McDonald's Franchise
Investment $139,550 - $342,400$1,314,500 - $2,306,500
Franchise Fee $15,000$45,000
Royalty Fee 8%4%
Advertising Fee 4.5%4%+
Year Founded 19651955
Year Franchised 19741955
Term Of Agreement 20 years20 years
Term Of Agreement 20 years20 years
Renewal Fee none$45K


Business Experience Requirements
 
Subway Franchise
McDonald's Franchise
Experience
  • General business experience

  • Industry experience
  • General business experience
  • Marketing skills
    		•

    Financing Options
     
    Subway Franchise
    McDonald's Franchise
      In-House/3rd PartyIn-House/3rd Party
    Franchise Fees Yes/YesNo/No
    Start-up Costs No/YesNo/No
    Equipment Yes/YesNo/Yes
    Inventory No/YesNo/No
    Receivables No/NoNo/No
    Payroll No/NoNo/No

    Training & Support
     
    Subway Franchise
    McDonald's Franchise
    Training On-The-Job Training: 33 hours Classroom Training: 62 hours Additional Training: Training available in Australia, China, Germany, India, Montreal, Canada & Miami On-The-Job Training: 500 hours Classroom Training: 72 hours Additional Training: At local McDonald's restaurant
    Support Newsletter Meetings/Conventions Toll-Free Line Grand Opening Online Support Security/Safety Procedures Field Operations Site Selection Proprietary Software Franchisee Intranet PlatformPurchasing Co-ops Newsletter Meetings/Conventions Toll-Free Line Grand Opening Online Support Security/Safety Procedures Field Operations Site Selection Proprietary Software
    Marketing Co-op Advertising Ad Templates National Media Regional Advertising Social media SEO Website development Email marketing Loyalty program/appCo-op Advertising Ad Templates National Media Regional Advertising Social media SEO Website development Email marketing Loyalty program/app
    Operations 65% of all franchisees own more than one unit

    Number of employees needed to run franchised unit: 8-12

    Absentee ownership of franchise is allowed. (100% of current franchisees are owner/operators)

    		 82% of all franchisees own more than one unit

    Absentee ownership of franchise is NOT allowed. (100% of current franchisees are owner/operators)

    Expansion Plans
     
    Subway Franchise
    McDonald's Franchise
    US Expansion YesYes
    Canada Expansion NoNo
    International Expansion YesYes

    Company Overviews

    About Subway

    In 1965, 17-year-old Fred DeLuca and family companion Peter Buck opened Pete's Super Submarines in Bridgeport, Connecticut. With a credit from Buck for just $1,000, DeLuca trusted the modest sandwich shop would procure enough to put him through school. In the wake of battling through the initial couple of years, the organizers changed the organization's name to Subway and started diversifying in 1974. Offering a new, solid contrasting option to fast-food eateries, Subway has establishments all through the United States and in a few nations, with areas in customary and nontraditional locales alike.

    In contrast with different rivals in the fast food industry, where franchisees need to pay millions, - for example, McDonald's ($1-2 million) and KFC ($1.3-2.5 million), investors in Subway need to pay just a portion of that.

    The total investment is an estimated $150,050 - $328,700 in the United States and $102,000 to $234,000 in Canada.

    Veteran Incentives  Franchise fee waived if opening on a military/government location; 50% off franchise fee if opening on non-government location but receiving government financing
    "Top    ""
    #2 on Canada's top franchises 2020.
    #107 in Franchise 500 for 2020.







    About McDonald's

    Ray Kroc, a milkshake mixer salesman, ventured to California in 1954 to visit McDonald's hamburger stand, where he heard they were running eight mixers at once. Kroc was impressed by how rapidly customers were served and, seeing an opportunity to sell many more milkshake machines, encouraged brothers Dick and Mac McDonald to open a chain of their restaurants. Kroc became their business partner and opened the first McDonald's in Des Plaines, Illinois in 1955.
    McDonald's brand is in 122 countries around the world. Thirty thousand locations serve 51 million customers each day. More than 70 percent of McDonald's restaurants around the world are owned and operated by independent local business people. Most standalone McDonald's restaurants offer both counter and drive-through service, with indoor and sometimes outdoor seating. The Drive-Thru, Auto-Mac, or McDrive as it is known in many countries, often has separate stations for placing, paying for, and picking up orders, though the former two steps are frequently combined. In some countries "McDrive" locations near highways offer no counter service or seating. In contrast, locations in high-density city neighborhoods often omit drive-through service.


    "Top   ""  "Entrepreneur

      "franchiserankingscom"                                                                                                                         
    #7 on Franchise Rankings.com                                                                                                                                                            
    #3 in Canada's top franchises.
    #3 in Franchise 500 for 2020
    #11 in Franchise 500 for 2021