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So, you want to own your own Subway, huh?

@step

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Why it worked

The video uses a relatable, high-energy skit format to demystify a complex financial topic, making it highly shareable and educational.

Summary

A creator performs a skit where he plays both a prospective franchisee and a Subway representative to explain the hidden costs of owning a franchise. The video breaks down the initial fees, ongoing royalties, and capital requirements to show that the investment is much higher than the initial franchise fee.

Structure

1The creator introduces the idea of buying a Subway franchise.
2The creator highlights the initial franchise fee vs. the actual startup costs.
3The creator details the ongoing royalty and marketing fees.
4The creator lists the net worth and liquid cash requirements.
5The creator concludes the skit with a humorous rejection of the franchise opportunity.

On-screen text

So, you want to own your own Subway, huh? Yes, sir, I'm a hard worker and I love Subway. I have the money, I would draw my entire life savings. Oh, you don't need that much. Oh, okay. How much do I need? About $15,000. That's it? In that case, I want eight of them, sir. I want to be a billionaire, sir. I'm going to get a yacht, sir. I'm going to get a jet, sir. There is a catch. What is it? So, the average Subway makes around $400,000 a year in revenue, right? Okay, I like that. But their profit margin is around 15 to 22%. So, I'll profit around $72,000? Give or take. Okay, not bad, considering I'm only paying $15,000. Wait, wait, wait, $15,000 gets you into the franchise. There's a bunch of other costs to factor in, like the equipment, signage costs, inventory, and any remodels, all right? This is going to cost you anywhere between $200,000 to $500,000. Dollars? I think I have enough. But we're not done yet. Since we are giving you an established brand and menu, you need to give us 8% revenue. Sheesh. Every month. You also need to give us an additional 4.5% of revenue to help us with our marketing budget. Plus we do require you to have a net worth of $150,000 and to have at least $100,000 in liquid cash. You still want eight of them? Forget it.

Original caption

How much it actually costs to own a Subway 🥪 Ever thought about owning a franchise? It sounds straightforward. Pay a fee, use a big brand name, and start making money. But the upfront number is rarely the full picture. Once you factor in build-out costs, ongoing fees, and slim margins, it becomes a very different decision. @Angelo Castillo