McDonald’s vs Subway: Which Franchise Is More Profitable in the USA?
Published: February 2026
Author Bio: Azka – Financial Enthusiast. Azka writes about business strategy, franchise investing, and personal finance with a focus on long-term wealth building. Connect with Azka for more insights on franchising, passive income, and smart investing.
Introduction: Two Fast-Food Giants, Two Very Different Investments
Investing in a franchise can be a powerful way to build a business with proven branding and revenue streams. Two of the most recognizable names in U.S. fast food are McDonald’s and Subway. Each offers franchise opportunities — but they serve very different investor profiles.
While McDonald’s commands massive brand recognition and high unit sales, Subway’s accessible entry point has traditionally appealed to first-time franchisees. In this article, we compare costs, profitability, cash flow, and long-term return potential so you can answer:
Which franchise is truly more profitable — McDonald’s or Subway — and which one fits your investment goals?
Franchise Overview
About McDonald’s
 |
| McDonald’s |
McDonald’s is one of the largest global quick service restaurant (QSR) franchises with thousands of U.S. locations and a robust corporate support system. Becoming a McDonald’s franchisee means partnering with a deeply established brand and a rigorous operational model.
Official franchising requirements are outlined on McDonald’s U.S. franchising page. McDonald’s U.S. Franchising Information (McDonald’s Official)
About Subway
 |
| Subway |
Subway is a global sandwich franchise that historically grew rapidly through low-cost franchising. Subway still offers opportunities across traditional storefronts and non-traditional venues such as universities and airports.
Official Subway franchise details — including investment ranges and fees — are published on Subway’s franchise FAQ site. Subway Franchise FAQs (Subway Official)
Read Also :
Low-Cost vs High-Return Franchise in the USA: Which One Wins?
Top 5 Most Profitable Franchise Businesses in the USA — 2026 Guide (With ROI Insights)
Dunkin’ vs Starbucks: Franchise Cost, Profit & Risk Comparison (2026 Guide)
Initial Investment & Ongoing Costs
Here’s how McDonald’s and Subway compare in terms of franchise costs — a key factor in profitability and return on investment.
| Metric | McDonald’s (USA) | Subway (USA) |
|---|---|---|
| Initial Franchise Fee | ~$45,000 (Scribd) | ~$15,000 (subwayfranchise.com) |
| Estimated Initial Investment | $1.47M – $2.73M (Scribd) | $199K – $537K (subwayfranchise.com) |
| Royalty Fee (ongoing) | ~4% of gross sales (ifpg.org) | 8% of gross sales (subwayfranchise.com) |
| Advertising/Marketing Fee | ~4%+ (ifpg.org) | ~4.5% (subwayfranchise.com) |
| Liquid Assets Required | ~$500K+ (McDonald's) | ~$100K+ (approx) (USA) |
| Typical Annual Revenue per Unit | ~$3M+ (median) (موسسه ملک پور) | ~$300K – $500K range estimates (Franchise Voice) |
➡️ McDonald’s requires significantly more capital upfront, but also delivers much higher sales per unit compared with Subway.
Profitability & Owner Earnings
McDonald’s Profit Profile
McDonald’s franchise units typically generate millions in annual sales, but margins are affected by operating costs, rent, labor, and corporate fees.
According to available franchise data, McDonald’s units can generate substantial revenue. Nonetheless, owners often report that take-home profits after expenses may be compressed, especially once fees, rent, and wages are considered. (franchiseki.com)
Subway Profit Profile
Subway’s lower entry costs mean a smaller financial barrier — but also lower sales volumes and narrower margins. Franchise owner earnings are typically more modest compared with high-volume brands. (Franchise Voice)
Subway Profit-Related Considerations:
Profit margins for franchisees may range in the 10–15% category depending on efficiency. (Franchise Voice)
Market saturation has impacted Subway’s domestic footprint, as thousands of U.S. locations have closed in recent years. (New York Post)
McDonald’s vs Subway: A Profitability Comparison
| Category | McDonald’s | Subway |
|---|---|---|
| Revenue Potential | High ($2.7M–$4M+) (موسسه ملک پور) | Low/Moderate ($300K–$500K) (Franchise Voice) |
| Profit Margin Potential | Moderate (~10–15%) (Barron's) | Low-Moderate (~10–15%) (Franchise Voice) |
| Payback Period | Longer due to high costs | Shorter due to lower costs |
| Risk Level | Higher investment risk | Lower financial risk |
| Brand Strength | Massive & stable | Strong, but challenged domestically |
| Support & Training | Extensive | Comprehensive but smaller scale |
Which Is Right for You?
Deciding between a McDonald’s or Subway franchise depends on your investment profile, risk tolerance, and long-term goals:
🥇 Best for High Net Worth Investors
McDonald’s
You have significant liquid capital and want a brand with large revenue potential.
You are comfortable with higher operational complexity and long payback horizons.
🥈 Best for First-Time Franchisees / Lower Budget
Subway
You want lower startup costs and a more manageable build-out.
You prefer a smaller, easier-to-scale unit without massive overhead — but accept more modest profits.
📌 Risk Disclaimer
Important: This article is for informational purposes only and does not constitute professional financial or investment advice. Franchise investments carry substantial risk, including financial loss, operational challenges, and market volatility. Always review the current Franchise Disclosure Document (FDD), consult with qualified financial advisors, and conduct thorough due diligence before committing capital.
Calls to Action (Monetization & Affiliate Ready)
👉 Compare investment platforms – Evaluate lending and investment platforms tailored to franchise financing (affiliate links).
👉 Check current rates – Review current small business loan rates and franchise financing options.
Conclusion
McDonald’s and Subway offer distinctly different franchise pathways:
McDonald’s delivers high revenue potential, global brand power, and proven long-term stability — at a higher cost and complexity.
Subway offers lower upfront investment and easier entry, but often modest profits and market saturation challenges.
Your choice ultimately depends on your capital, business experience, and goals. If you are financially prepared for a larger venture and aim for long-term growth, McDonald’s may be a stronger fit. If you seek a more accessible opportunity and are comfortable with smaller scale returns, Subway could be the right first franchise.