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In the United States, the official examples here range from $199,135 to $536,745 for a Subway restaurant to $1,470,500 to $2,642,000 for a traditional McDonald’s. Those are brand- and format-specific estimates, not an industry average or a like-for-like comparison. The total investment is much more than the initial franchise fee; the current Franchise Disclosure Document (FDD) and the proposed location determine the relevant figure.
What the total startup estimate includes
A franchise fee is only one cost. Depending on the opportunity, the estimate may also include property or lease costs, construction, equipment and décor, opening inventory, professional and pre-opening expenses, and working capital. The balance differs for a new build, a conversion of an existing site, or a purchase of an operating restaurant.
For example, Subway’s U.S. franchise FAQ lists a $15,000 initial fee alongside an estimated initial investment of $199,135–$536,745. McDonald’s USA lists a $45,000 initial fee within its $1,470,500–$2,642,000 estimated investment for a traditional restaurant. The sources do not establish a common estimate date or identical restaurant format, so these figures illustrate the range of the named opportunities rather than which brand is cheaper.
Illustrative McDonald’s opening-cost categories
McDonald’s franchisee guide gives the following indicative estimates for a new traditional restaurant. The guide says costs are subject to change and actual costs are determined when a specific restaurant is offered to a qualified buyer; its publication year was not established in the available source.
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| Cost category | Guide estimate |
|---|---|
| Initial franchise fee | $45,000 |
| Opening inventory | $20,000–$35,000 |
| Miscellaneous opening expenses | $45,000–$55,000 |
| Additional funds for three months | $250,000–$355,000 |
| Signs, seating, equipment, and décor | $900,000–$1,500,000 |
The guide’s categories are illustrative, not a replacement for the FDD investment range or a site-specific estimate. Check the FDD’s issue date and the assumptions for the actual offer.
How much cash and financial qualification may be required?
An advertised total investment, a franchisor’s buyer qualification threshold, and the cash a buyer must have available are different measures. Requirements vary by brand, location, and transaction; the following U.S. examples are not general lending rules.
| Brand and opportunity | Published financial criteria |
|---|---|
| Subway, U.S. FAQ | Minimum net worth of $150,000 and liquid assets of $100,000 per location; requirements may vary by territory. |
| McDonald’s, existing restaurant purchase and operation | Typically at least $750,000 in non-borrowed, unencumbered personal funds; recommends $100,000 working capital per restaurant and $75,000 additional funds for relocation. McDonald’s says a new restaurant requires greater investment. |
| Chick-fil-A, initial franchise fee funding | $10,000 in non-gifted, non-borrowed funds for the initial franchise fee. This is not a verified total cost to develop a restaurant. |
Subway’s criteria are stated on its U.S. franchise FAQ. McDonald’s describes its requirements and recommendations on its franchise costs page, specifically for existing restaurant purchases and operations. Chick-fil-A’s fee requirement appears on its official franchise information page.
Include recurring fees in the affordability calculation
Startup capital does not show what operating the restaurant will cost over time. Subway’s U.S. FAQ lists royalties of 8% of gross sales and advertising fees of 4.5% of gross sales. McDonald’s franchisee guide lists a 4% service/royalty fee, advertising contributions of at least 4%, rent that may combine fixed and sales-based components, and other outgoing fees. These terms are agreement-specific; verify current Item 6 and related FDD terms for the proposed brand and location.
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How to verify the cost for a specific opportunity
- Request the current FDD. Focus on the investment and fee tables and the agreements that apply to the offer. Use the document’s issue date rather than treating an undated web estimate as current.
- Confirm the format and what is included. Ask whether the estimate assumes a new site, conversion, or resale, and whether it includes property work, equipment, opening inventory, pre-opening payroll, deposits, and operating reserves.
- Separate franchisor charges from third-party costs. Ask which amounts go to the franchisor and which are paid to landlords, contractors, suppliers, lenders, or professional advisers.
- Build a separate operating cash-flow plan. Account for royalties, advertising, rent, debt service, and operating reserves in addition to opening investment.
- Review the disclosure and agreements with an adviser. The cited McDonald’s FDD says a buyer must receive that disclosure at least 14 calendar days before signing a binding agreement or making a payment in connection with the proposed sale. That is the timing stated in that FDD; confirm current federal and state requirements for the actual transaction and jurisdiction. The FDD also points readers to the FTC consumer guide and recommends review with an adviser such as a lawyer or accountant.
McDonald’s investment and timing figures appear in its Franchise Disclosure Document; its illustrative cost categories are in Your Path to Becoming a McDonald’s Franchisee.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Compare opportunities on the same basis
Before ranking brands by affordability, compare the same kind of transaction and the same cost categories. A new-build estimate should not be treated as equivalent to a figure for buying an existing restaurant.
- Total initial investment and estimate date
- New build, conversion, or existing restaurant purchase
- Required liquid capital and other buyer qualifications
- Initial franchise fee
- Construction, equipment, décor, and inventory included
- Working-capital allowance and its time period
- Ongoing royalty, advertising, and other fees
- Real-estate arrangement and location- or territory-specific requirements
The examples above are U.S. figures from individual franchisors; they do not establish a credible cross-industry average.
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