At a Glance: Key Differences
Data-driven observations based on disclosed figures. Not investment advice — verify current numbers in each franchise's FDD.
Detailed Analysis: McDonald's vs Subway
According to FranchiseStack.ai's franchise database of 188+ FDD-sourced opportunities, McDonald's and Subway are among the most-researched franchise comparisons. The choice comes down to your investment capacity, risk tolerance, and operational preferences. Both operate in the Food & Restaurant sector, which means they compete for similar customers and territory. McDonald's has a larger footprint, which typically translates to stronger brand recognition but potentially more territorial saturation.
From a capital perspective, Subway has a lower entry point. However, initial investment alone doesn't determine ROI — ongoing royalties, revenue potential, and failure rates all factor into long-term returns. McDonald's charges a lower royalty rate, which means more of your gross revenue stays in your pocket.
Franchisee satisfaction is one of the strongest predictors of long-term success. McDonald's leads with a 72/100 satisfaction score, indicating that existing owners are more positive about their decision. Before committing to either franchise, we recommend running both through our Financial Model tool to project personalized 5-year P&L scenarios. You should also review each franchise's complete Franchise Disclosure Document using our FDD Checker to understand litigation history, termination rates, and territory restrictions.
Investment & Fees
| Metric | McDonald's | Subway |
|---|---|---|
| Min Investment | $1.3M | $229K |
| Max Investment | $2.3M | $524K |
| Franchise Fee | $45K | $15K |
| Royalty Rate | 4.0% | 8.0% |
| Ad Fund Rate | 4.0% | 4.5% |
Unit Economics
| Metric | McDonald's | Subway |
|---|---|---|
| Avg Unit Revenue | $3.7M | $420K |
| Avg Profit Margin | N/A | N/A |
Scale & Growth
| Metric | McDonald's | Subway |
|---|---|---|
| Total Units | 40,031 | 36,690 |
| Annual Growth | 3.0% | -3.5% |
| Failure Rate | 1.5% | 8.0% |
Franchisee Performance
| Metric | McDonald's | Subway |
|---|---|---|
| Franchisee Satisfaction | 72/100 | 55/100 |
Track Record
| Metric | McDonald's | Subway |
|---|---|---|
| Years in Business | 69 | 59 |
| Years Franchising | 69 | 48 |
Financial Requirements
| Metric | McDonald's | Subway |
|---|---|---|
| Min Net Worth Required | $500K | $100K |
| Liquid Capital Required | $500K | $50K |
Operations
| Metric | McDonald's | Subway |
|---|---|---|
| Avg Employees | 50 | 12 |
| Training Weeks | 9 | 2 |
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Frequently Asked Questions
Is McDonald's or Subway a better franchise investment?
The answer depends on your goals, budget, and market. McDonald's has 40,031 total units and a 72/100 franchisee satisfaction score. Subway has 36,690 total units and a 55/100 franchisee satisfaction score. Use our ROI Calculator to model both scenarios.
How much does it cost to open a McDonald's franchise?
Based on data in our database, opening a McDonald's franchise requires an initial investment of $1.3M – $2.3M. The franchise fee is $45K, with ongoing royalties of 4.0%. Always request the current FDD for exact figures.
How much does it cost to open a Subway franchise?
Based on data in our database, opening a Subway franchise requires an initial investment of $229K – $524K. The franchise fee is $15K, with ongoing royalties of 8.0%. Always request the current FDD for exact figures.
What is the royalty rate for McDonald's vs Subway?
McDonald's's royalty rate is 4.0%. Subway's royalty rate is 8.0%. That means McDonald's has the lower ongoing royalty burden.
Which has more locations — McDonald's or Subway?
McDonald's has 40,031 total units. Subway has 36,690 total units. A larger system can mean more brand recognition, but also more territorial competition.
Is McDonald's or Subway semi-absentee friendly?
McDonald's is typically run as a owner-operator model. Subway is typically run as a owner-operator model. If passive income is your goal, semi-absentee models let you hire a manager to run day-to-day operations.
Related Comparisons
Data sourced from franchise disclosure documents and public records. Investment ranges, royalty rates, and unit counts change — always request current FDD before making investment decisions. Last updated March 2026.
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