About Sub Station Franchise
Sub Station II is a quick service restaurant franchise specializing in submarine sandwiches, deli style sandwiches, salads, and soups.
With roots dating back to 1976 when the brand began franchising, Sub Station II is one of the longer running sandwich franchise concepts in the United States, offering a proven model built on decades of operational experience.
The initial franchise fee is $20,000, making it one of the more affordable entry points in the quick service restaurant category.
Sub Station Franchise Cost & Fees
Minimum Investment
$281K
Average Investment
$447K
Maximum Investment
$614K
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $20,000 | One-time payment upon signing |
| Royalty Fee | 5% of Net Sales of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | Currently 4% of Net Sales (divided between Brand Fund and Local Store Marketing, may increase to 5% of Net Sales) | National brand fund |
| Total Investment Range | $280,500 – $613,500 | Includes build-out, inventory, working capital |
The investment range of $281K–$614K reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (5% of Net Sales) and marketing fee (Currently 4% of Net Sales (divided between Brand Fund and Local Store Marketing, may increase to 5% of Net Sales)) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| Deposit and Initial Franchise Fee | $20,000 | $20,000 |
| Real Estate | $0 | $0 |
| Lease Security Deposit | $8,000 | $15,000 |
| Construction and Leasehold Improvements | $75,000 | $250,000 |
| Furniture, Fixtures, Equipment and Smallwares | $90,000 | $150,000 |
| Office Equipment and Supplies | $1,500 | $2,500 |
| Signage – Exterior and Interior & Catering | $12,000 | $25,000 |
| Computer, Electronics, Point of Sale System | $6,000 | $15,000 |
| Opening Inventory | $7,000 | $10,000 |
| Insurance | $3,000 | $6,000 |
| Utilities and Deposits | $2,000 | $4,000 |
| Licenses and Permits | $2,500 | $5,000 |
| Architect and Engineering Fees | $10,000 | $25,000 |
| Pre-opening training, labor and travel expense | $5,000 | $10,000 |
| Grand Opening Advertising | $3,500 | $6,000 |
| Working Capital – 3 months | $35,000 | $70,000 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | $5,000 or greater amount to reimburse us for our costs |
| Renewal Fee | 50% of our then-current Initial Franchise Fee |
| Technology Fee | Monthly fees ranging from $49 to $150 for POS system; $99 plus $0.10 per transaction for online ordering platform. |
| Audit Fee | Deficiency shown in the audit, plus interest. Reimbursement for audit costs if understatement exceeds 2% or due to failure to provide reports. |
| Grand Opening Advertising | $3,500 - $6,000 |
| Brand Fund | 2% of Net Sales |
| Local Store Marketing | 2% of Net Sales |
| Market Cooperative | Amount determined by Market Cooperative when established |
| Collection Costs and Expenses | Our costs and expenses |
| Costs and Attorneys’ Fees | Our costs and expenses |
| Indemnification | The losses and expenses that we and our affiliates incur |
| Interest | Maximum rate permitted for indebtedness of this nature in the state, not to exceed 1.5% per month |
| New Product and Supplier Testing | Reasonable cost of inspection and actual cost of testing |
| Post - Opening Assistance | $250 per person, per day for up to a 10-hour shift |
| Reimbursement of Insurance Costs | Our out-of-pocket costs of obtaining coverage |
| Relocation | $1,500 |
| ServSafe Testing | Currently $85 - $110 per attendee |
| Taxes | Amount of tax we incur |
| Training: Management Training Program | $250 per person, per day for up to 10-hour shift |
| Training: Additional Training | Tuition charge as established by us periodically |
Training Program (Item 11)
| Detail | Information |
|---|---|
| Total Duration | 7 to 10 days |
| Classroom Training | 0 |
| On-the-Job Training | 75 - 150 |
| Training Location | Sub Station II Restaurant in Lexington, South Carolina or your Restaurant |
| Additional Training | We may require your Operating Principal, Certified Managers, managerial personnel, and/or other previously trained and experienced staff members to attend and complete satisfactorily various training courses that we periodically choose to provide at the times and locations that we designate, as well as periodic conventions, meetings, and conferences that we specify. We may charge reasonable registration or similar fees for these meetings and you will need to pay all salaries, benefits, travel, living and other expenses incurred by your employees during all such meetings. |
Territory Rights (Item 12)
| Detail | Information |
|---|---|
| Territory Type | Protected |
| Exclusive Territory | No |
| Territory Size | The size may range from a portion of a metropolitan area to a county or a state in less densely populated areas. |
| Description | The perimeters of the Protected Area may be described by specific street boundaries, county lines, state lines, municipal boundaries, railroad tracks or other similar boundary descriptions. |
Renewal, Termination & Transfer (Item 17)
| Detail | Information |
|---|---|
| Initial Term | Ten years from the date that the Restaurant opens. |
| Renewal Term | one (1) successor term of ten (10) years |
| Renewal Fee | 50% of our then-current Initial Franchise Fee for a new Restaurant. |
| Renewal Conditions | You must: give timely notice; present evidence of right to remain in possession of Premises; not be in default of any agreement with us; be in substantial compliance with all agreements with us; renovate and modernize the Restaurant; update equipment, menu offerings, services, products, merchandise, methods and procedures to our then-current standards; be in compliance with then-current qualifications and training requirements; sign general release; sign a new franchise agreement with us which may contain terms and conditions materially different from your current Franchise Agreement, including higher royalty fees and advertising contributions; and pay a successor fee. |
| Transfer Fee | $5,000 or greater amount to reimburse us for our costs |
| Transfer Conditions | Conditions include: transferee meets our then-current qualifications, completes training, retains possession of the Restaurant, agrees to upgrade, remodel and refurbish the Restaurant; the sales price is reasonable; payment of amounts due; no default under any agreement with Sub Station II and its affiliates; no default beyond the applicable cure period under any real estate lease, equipment lease or financing instrument relating to the Restaurant or with any vendor or supplier to the Restaurant; payment of transfer fee; sign our then current form of standard Franchise Agreement; and sign general release. |
| Termination for Cause | Automatic termination for: insolvency, bankruptcy, appointment of receiver, composition with creditors, unsatisfied final judgment for 30+ days, dissolution, execution levied against business/property, foreclosure suit not dismissed in 30 days, or sale of restaurant after levy. Termination without cure period for: failure to open on time, Operating Principal fails training, employees fail training, cessation of operations for 3+ consecutive or 5 individual days, unauthorized transfer, violation of confidentiality/non-competition, material misrepresentation/omission, knowing falsification of reports, imminent danger to public health/safety, loss of premises, misuse of Marks, repeated understatement of Net Sales (3+ times by 2% or 1 time by 5%), felony conviction, blocked assets under anti-terrorism laws, or default of other agreements. Curable defaults have 10 days for monetary and 20 days for other defaults. Two or more default notices in 12 months allows termination without cure. |
| Non-Compete Period | during the term of this Agreement, and for a continuous period of two (2) years following its expiration or earlier termination |
| Non-Compete Details | During the term: No diversion of business/customers to competitor; no interest in any restaurant business that features submarine sandwiches; or that offers sandwiches, salads or any individual menu item that comprises 10% of sales at Sub Station II restaurants or whose method of operation or trade dress is similar to that used in the System. Post-termination: No activity as described above for two years within the Protected Area and within seven miles of any then-existing Sub Station II restaurant. |
Operations & Supply (Items 8 & 15)
| Detail | Information |
|---|---|
| Owner-Operator Required | No |
| Participation Details | If you are a legal entity, you must identify a Continuity Group that is comprised of individuals who own at least 66% of your ownership interests and voting securities. You must designate a qualified individual to serve as the “Operating Principal” of your Restaurant. The Operating Principal must: own at least a 10% equity ownership interest in you; be a member of the Continuity Group; devote full-time and reasonable efforts to supervising the operation of the Restaurant and those other Sub Station II restaurants operated by you in the same geographic area as the Restaurant and shall not engage in any other business or activity, directly or indirectly, that requires substantial management responsibility; maintain a primary residence within a reasonable driving distance of the Restaurant; and have successfully completed the Management Training Program, qualified as a Certified Manager and completed any additional training we require. The Restaurant must be under the on-site supervision of the Operating Principal or a Certified Manager who meets our applicable training qualifications for that person’s designated position. You must employ at the Restaurant the number of Certified Managers we require, which in no event shall be less than two (one of whom may be your Operating Principal). |
| Required Suppliers | You must purchase all products, ingredients, supplies, materials, merchandise and other products used or offered for sale at the Restaurant solely from suppliers that we have approved in writing. We may appoint only one supplier for any particular item and we may designate ourselves or an affiliate as the sole supplier. A list of approved suppliers is available upon written request. |
| Supply Restrictions | If you wish to purchase any products or any items from an unapproved supplier, you must first submit a written request for approval. We have the right to require inspection of supplier's facilities and testing of samples, for which you must reimburse us. Approval process ranges from 30 days to six months. We may establish strategic alliances or preferred vendor programs and may limit the number of approved suppliers. We may establish commissaries and distribution facilities owned and operated by us or an affiliate. |
| Franchisor Revenue from Suppliers | In our fiscal year ending August 31, 2022, we received $55,425 from the sale of products other than the Startup Package to our franchisees, which is 1.7% of our total annual revenue of $3,223,809. We received $322,274 from supplier rebates based on purchases made by our franchisees, which is 10% of our total annual revenue of $3,223,809. |
Financing (Item 10)
| Detail | Information |
|---|---|
| Financing Available | No |
| Description | We do not offer direct or indirect financing. We do not guarantee your note, lease or obligation. |
Sub Station Franchise Earnings — Item 19
Average Revenue
$540K
Median Revenue
$534K
Revenue Range
$153K – $1.2M
Sample Size
38 units
Past financial performance does not guarantee future results. Individual results will vary.
Sub Station Litigation & Risk Flags
Clean Litigation RecordSub Station has no pending litigation actions listed in their FDD. There is also no bankruptcy history disclosed.
Litigation and bankruptcy data is sourced from Items 3 and 4 of the FDD. Always verify current status directly from the most recent FDD.
Sub Station System Growth
Total Units
39
Franchised
36
Company-Owned
3
Sub Station currently operates 36 franchised locations and 3 company-owned units. Unit count data is sourced from Item 20 of the FDD.
Unit History (Item 20)
| Year | Opened | Closed | Total |
|---|---|---|---|
| 2020 | 0 | 2 | 41 |
| 2021 | 0 | 1 | 40 |
| 2022 | 1 | 2 | 39 |
Transfers: 4 | Closures: 5
Franchisor Financials (Item 21)
Revenue
$3.2M
Net Income
$190K
Total Assets
$1.8M
Audited by Mauldin & Jenkins, LLC for year ending August 31, 2022.
Sub Station Franchise — FAQ
The total investment to open a Sub Station franchise ranges from $280,500 to $613,500, per their Franchise Disclosure Document. This includes the initial franchise fee of $20,000. The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
Sub Station charges a royalty fee of 5% of Net Sales of gross sales, plus a Currently 4% of Net Sales (divided between Brand Fund and Local Store Marketing, may increase to 5% of Net Sales) contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the Sub Station Franchise Disclosure Document free on this page. The FDD is a public document filed with state franchise registries. Always also request the current FDD directly from Sub Station to ensure you have the most up-to-date version.
According to the Item 19 financial performance representation in their FDD, Sub Station franchise owners report average revenue of $540K and median revenue of $534K. This is based on a sample of 38 units. Past performance does not guarantee future results.
Sub Station has been franchising since 1976. The FDD shows an investment range of $280,500-$613,500, a 5% of Net Sales royalty, and includes an Item 19 earnings disclosure. There is no pending litigation. Review the full FDD and contact current franchisees listed in Item 20 before making any investment decision.
The franchise fee is $20,000 and the total investment ranges from $280,500 to $613,500 depending on location size and market. Contact the franchisor directly for current net worth and liquid capital requirements, territory availability, and application details.
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Data Source & Disclaimer: This website is for informational purposes only. It is not an offer to sell or buy a franchise. This profile is based on publicly available FDD data sourced from state franchise registry filings. All information is for research purposes only and does not constitute legal, financial, or investment advice. Data may be outdated or contain errors. Always obtain the current FDD directly from Sub Station and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with Sub Station or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com