Subway vs McDonald'sFranchise Comparison 2026
Subway and McDonald's represent two different approaches in the QSR space. Here's how they compare on investment costs, fees, revenue potential, and market presence.
Quick Comparison
Side-by-Side Comparison
| Metric | Subway | McDonald's | Difference |
|---|---|---|---|
| Franchise Fee | $15,000 | $45,000 | -67% |
| Total Investment (Low) | $116,000 | $1.3M | -91% |
| Total Investment (High) | $263,000 | $2.3M | -89% |
| Cash Required | $80,000 | $500,000 | -84% |
| Royalty Rate | 8.0% | 4.0% | Higher |
| Advertising Fee | 4.5% | 4.0% | Higher |
| Estimated Revenue | $490,000 | $2.9M | -83% |
| Number of Locations | 20,133 | 40,275 | Fewer |
| Year Founded | 1965 | 1955 | Newer |
| Training Duration | 2 weeks | 9 weeks | Shorter |
Note: Data sourced from public FDD filings and industry reports. Actual costs vary by location, real estate, and format. Always review current FDD Item 7 and Item 19 disclosures before making investment decisions.
Detailed Analysis
About Subway
Lower-cost franchise option with flexible footprint. Lower per-unit sales but easier entry point for new franchisees.
About McDonald's
Global fast food leader known for burgers, fries, and breakfast items. Extensive support system and brand recognition.
Investment Comparison
Subway requires a lower initial investment (avg $189,500) compared to McDonald's(avg $1.8M), making it more accessible for first-time franchisees. However, McDonald's may offer higher revenue potential.
Fee Structure
McDonald's has lower ongoing fees (8.0% total) compared to Subway(12.5% total), which means more of each sales dollar stays with the franchisee. Over time, this can significantly impact profitability.
Market Position
McDonald's has a significantly larger footprint with 40,275 locations compared to Subway's 20,133. This larger network typically means better brand recognition, more purchasing power, and stronger operational support.
Frequently Asked Questions
How much does it cost to open a Subway vs McDonald's franchise?
Subway requires an initial investment of $116,000 to $263,000, while McDonald's requires $1.3M to $2.3M. Subway has the lower average investment at $189,500.
What are the ongoing fees for Subway vs McDonald's?
Subway charges a 8.0% royalty plus 4.5% advertising fee (12.5% total). McDonald's charges 4.0% royalty plus 4.0% advertising fee (8.0% total). McDonald's has lower total ongoing fees.
Which franchise makes more money: Subway or McDonald's?
Based on estimated average unit revenue, McDonald's generates $2.9M per location compared to $490,000 for Subway. However, profitability depends on many factors including local market, operating costs, and management.
How many locations does Subway have vs McDonald's?
Subway has 20,133 locations, while McDonald's has 40,275 locations. McDonald's has the larger footprint, which typically means stronger brand recognition and supply chain advantages.
Is Subway or McDonald's a better franchise investment in 2026?
Both Subway and McDonald's are established QSR brands with proven models. Subway offers a lower entry point, while McDonald's shows higher average revenue. The best choice depends on your available capital, local market conditions, and personal goals. Always review the current FDD before making investment decisions.
Stay Updated on Franchise Comparisons
Get detailed franchise cost analysis and investment insights delivered weekly.
QSR Intelligence Briefing
Daily insights on the QSR industry. No spam, just intelligence.