Subway Franchise Failure Rate
SBA 7(a) loan default data, FY2010–FY2019 · Updated 2026
Subway franchisees defaulted on 7.6% of SBA 7(a) loans between FY2010 and FY2019 — 92 of 1,211 loans were charged off — according to U.S. Small Business Administration data. That is lower than the Limited-Service Restaurants industry average of 10.3%.
- 7.6%SBA default rate92 of 1,211 loans
- 1,211loans resolvedapproved FY2010–FY2019
- 10.3%Limited-Service Restaurants averageall SBA loans in the industry
- 44th lowestindustry rankof 81 Limited-Service Restaurants brands
| SBA default rate | 7.6% |
|---|---|
| Loans approved | 1,211 |
| Loans charged off | 92 |
| Date range | FY2010–FY2019 |
| Industry | Limited-Service Restaurants |
| Industry average | 10.3% |
| Total initial investment (FDD Item 7) | $263,000–$630,000 |
| Data source | U.S. SBA 7(a) FOIA loan data |
Most SBA default figures published online use loans approved since 2020 — loans that have had six years or less to fail — so those rates are floors, not outcomes. Every rate on this site is computed from the matured FY2010–FY2019 cohort: loans that have been paid in full or charged off, so the result is settled. Loans approved since 2020 are shown as counts so early charge-offs are visible without being mistaken for a rate.
Source: U.S. SBA FOIA dataset, statuses as of June 30, 2026. Figures also in the comparison table below.
About 1 in 13 Subway SBA borrowers failed to repay — well below the Limited-Service Restaurants average of 10.3%.
What is the Subway franchise failure rate on SBA loans?
Subway is a Limited-Service Restaurants franchise. This page reports the outcome of every SBA 7(a) loan the U.S. Small Business Administration's public FOIA file attributes to Subway franchisees: 1,211 loans approved between fiscal 2010 and 2019, of which 92 were charged off. Loan statuses are as of June 30, 2026, and the cohort has matured, so these are settled outcomes rather than projections.
- SBA 7(a) loans approved FY2010–FY20191,211
- Charged off92
- Charge-off rate7.6%
- Limited-Service Restaurants franchise benchmark10.3%
- Brand vs industry0.7x
- All-franchise SBA benchmark10.2%
- Average loan size, 2010s cohort$241,277
- New SBA loans since 2020322
- Early charge-offs since 20207
How does Subway compare with other Limited-Service Restaurants franchises?
The table sets Subway's charge-off rate beside its Limited-Service Restaurants peers and the two economy-wide benchmarks. All figures use the same cohort — SBA 7(a) loans approved FY2010–FY2019, statuses as of June 30, 2026 — and the same denominator of resolved loans, so they are directly comparable.
| Measure | Subway | Limited-Service Restaurants | All franchises | All SBA borrowers |
|---|---|---|---|---|
| Default (charge-off) rate | 7.6% | 10.3% | 10.2% | 8.0% |
| Loans in sample | 1,211 | — | — | — |
| Defaults | 92 | — | — | — |
| Average loan size | $241,277 | — | — | — |
What would Subway's royalty and ad fund cost at your sales level?
From Subway's FDD Item 6 (2026): royalty 8% of sales, advertising fund 4.5%. Royalty and ad fund only · illustration. Other Item 6 fees, fixed or percentage, and local marketing minimums are not included. The standard royalty is 8%, but certain multi-unit franchisees entering into a Development Agreement may be eligible for reduced royalty rates ranging from 7.5% to 8%.
| Annual sales | Royalty | Ad fund | Royalty + ad fund |
|---|---|---|---|
| $250,000 | $20,000 | $11,250 | $31,250 |
| $500,000 | $40,000 | $22,500 | $62,500 |
| $1,000,000 | $80,000 | $45,000 | $125,000 |
| $2,000,000 | $160,000 | $90,000 | $250,000 |
What has Subway SBA lending looked like since 2020?
Since 2020, Subway franchisees have taken 322 new SBA 7(a) loans. 7 have already charged off. Early defaults on loans under six years old are worth noting. Most SBA failures take longer to develop.
Loans approved since 2020, by fiscal year — counts only: 7 have charged off to date and most are still outstanding, so no rate is drawn.
Source: U.S. SBA FOIA dataset, statuses as of June 30, 2026.
Show the numbers behind this chart
| Fiscal year | Loans | Charged off | Rate |
|---|---|---|---|
| FY2010 | 149 | 7 | 4.7% |
| FY2011 | 153 | 9 | 5.9% |
| FY2012 | 150 | 9 | 6.0% |
| FY2013 | 140 | 5 | 3.6% |
| FY2014 | 139 | 15 | 10.8% |
| FY2015 | 148 | 15 | 10.1% |
| FY2016 | 97 | 15 | 15.5% |
| FY2017 | 63 | 3 | 4.8% |
| FY2018 | 101 | 12 | 11.9% |
| FY2019 | 71 | 2 | 2.8% |
| FY2020 | 62 | — | outstanding |
| FY2021 | 53 | — | outstanding |
| FY2022 | 48 | — | outstanding |
| FY2023 | 43 | — | outstanding |
| FY2024 | 38 | — | outstanding |
| FY2025 | 43 | — | outstanding |
| FY2026 | 35 | — | outstanding |
How to read this
A charge-off means a franchisee borrowed, operated, and failed severely enough that the SBA wrote off the government-guaranteed loan. Unlike franchisor marketing or Item 19 disclosures, this is an observed outcome recorded by a federal agency. One caveat cuts the other way: SBA borrowers are typically less capitalized than all-cash buyers, so these rates can overstate risk for well-funded operators.
How reliable is this number?
Subway's figure rests on 1,211 resolved SBA 7(a) loans approved between fiscal 2010 and 2019. That cohort has matured, so the rate is a settled outcome, not a projection. With 1,211 resolved loans, the sample is large enough that a single default barely moves the figure. Loans approved since 2020 are excluded from the rate because most are still outstanding; they appear on this page as counts only. Every Subway figure is recomputed from the public SBA FOIA file on each rebuild.
Is Subway in financial trouble? What the SBA data shows
Subway's SBA 7(a) default rate was 7.6% for loans approved FY2010–FY2019 (92 of 1,211 loans charged off) — 44th lowest of 81 Limited-Service Restaurants brands tracked here. A default rate close to the Limited-Service Restaurants average of 10.3% is, on its own, neither a warning sign nor a reassurance.
Frequently asked
- What is Subway's franchise failure rate?
- Subway franchisees defaulted on 7.6% of SBA 7(a) loans between FY2010 and FY2019 — 92 of 1,211 loans were charged off — according to U.S. Small Business Administration data. That is lower than the Limited-Service Restaurants industry average of 10.3%.
- How does Subway compare to other Limited-Service Restaurants franchises?
- Subway's 7.6% SBA default rate is lower than the Limited-Service Restaurants industry average of 10.3%. See every Limited-Service Restaurants franchise ranked on the Limited-Service Restaurants industry page. Limited-Service Restaurants franchises →
- What does 'SBA default rate' mean?
- An SBA default rate is the share of SBA 7(a) loans, approved FY2010–FY2019 and since resolved (paid in full or charged off), that were charged off — written off after the borrower failed to repay. It is not a measure of unit closures.
- How much does a Subway franchise cost?
- Subway's 2026 FDD puts the total initial investment (Item 7) at $263,000–$630,000, including an initial franchise fee of $15,000 (Item 5). The average SBA 7(a) loan to a Subway franchisee in the 2010s cohort was $241,277.
- Who owns Subway?
- Subway is franchised by Doctor’s Associates LLC, according to the brand's FDD (2026).
Source
Source: U.S. Small Business Administration, 7(a) loan program charge-off data, FY2010–FY2019. Franchise data is matched on the SBA's franchise code / brand name. "Failure rate" here means the share of approved loans (resolved: paid in full or charged off) that were charged off; it is not a measure of unit closures. Last updated September 30, 2026.
Every brand in one table, with percentiles and breakdowns by year, industry and loan size: franchise SBA default rates, all 415 brands.
Cite this page
Franchise Default Rates (2026). Subway franchise SBA 7(a) default rate, FY2010–FY2019 cohort: 7.6% (92 of 1,211 loans charged off). Derived from U.S. SBA FOIA data, loan statuses as of June 30, 2026.
https://franchisefailurerates.com/franchise/subway/ · Data & methodology · Download the dataset (CSV)