Last updated with 2026 FDD data, April 2026.
Subway's 2026 FDD reports a $239K to $537K Item 7 range, an 8.0% royalty plus 4.5% ad fund, and no Item 19 disclosure. McDonald's reports a $1.5M to $2.7M range, a 4.0% royalty plus 4.0% ad fund, and a $4.0M average unit volume in Item 19. Buffalo Wild Wings reports a $2.5M to $4.9M range, a 5.0% royalty plus 3.8% ad fund, and a $3.6M AUV. Three brands, three capital tiers, three very different disclosure postures.
For a buyer running a fast food franchise cost comparison in 2026, the three combined cover most of the QSR and casual-dining market: 19,502 Subway units, 13,559 McDonald's units, and 1,183 Buffalo Wild Wings units, totaling more than 34,000 US locations. Each one answers a different question about how much money goes in on day one, how much keeps coming out every week, what revenue is realistic, and whether the system is growing or shrinking under existing operators.
Marcus, a composite drawn from FranchiseLens buyer-profile data, is 42, the CFO of a Charlotte logistics firm, with $500K in liquid capital, roughly $1.2M in total project funds after SBA underwriting, and 12 years of P&L responsibility but zero restaurant operating experience. Subway's Item 7 floor fits inside his liquid alone. McDonald's Item 7 floor sits at three times his liquid, with the franchisor's qualifying net-worth gate stacked on top. Buffalo Wild Wings' floor is five times his liquid before the casual-dining operator gate enters the picture. The 2026 FDDs draw the boundaries clearly.
Key Takeaways
- Subway's 2026 FDD opens at the lowest Item 7 floor in QSR ($239K) but charges the highest combined royalty plus ad fund (12.5%) of the three and discloses no Item 19 revenue benchmark.
- McDonald's 2026 FDD reports a $4.0M AUV (Item 19) on a $1.5M-$2.7M Item 7 range, the highest disclosed unit-economics profile in the comparison set.
- Buffalo Wild Wings' 2026 FDD reports a $3.6M AUV at a $2.5M-$4.9M floor, with the lowest combined fee rate (8.8%) of the three.
- Subway's unit count contracted 3.1% in its most recent disclosure year (roughly 620 net closures); McDonald's grew 0.8%; Buffalo Wild Wings was effectively flat at -0.2%.
- Normalized litigation per 100 units, computed from Item 3 three-year counts: Subway 0.43, Buffalo Wild Wings 0.25, McDonald's 0.11.
Why these three brands frame the 2026 fast food franchise cost comparison
Subway, McDonald's, and Buffalo Wild Wings sit at three different points on the franchise capital curve. Subway is the lowest-cost national QSR brand for a buyer who can write a $250K check. McDonald's is the mid-tier, capital-intensive QSR commitment with a real-estate component embedded in the deal structure. Buffalo Wild Wings is the casual-dining tier, full-service, liquor-licensed, and operationally adjacent to a Texas Roadhouse or Applebee's rather than a counter-service QSR.
The 2026 FDDs filed by each brand answer five questions a serious buyer needs to resolve before signing: what it costs to open (Item 5 and Item 7), what it costs to operate (Item 6), what franchisees actually earn (Item 19), what the unit-count trajectory looks like (Item 20), and what the legal record shows (Item 3). The brief version of marketing materials only covers the first of those five. The full picture lives in the FDD. Our FDD primer walks through what each Item is supposed to disclose and where franchisors are allowed to remain silent.
Investment floors: what each brand costs to open
Per Item 7 of the 2026 FDD, the three brands sit at three different capital tiers. Subway is the entry, McDonald's is the capital-intensive QSR commitment, and Buffalo Wild Wings is the full-service casual-dining build.
The spread is not even. Buffalo Wild Wings' Item 7 floor is 10.5× Subway's floor and 1.7× McDonald's floor. Buyers stress-testing where their own capital lands across these three tiers can run the numbers in the total investment calculator. The drivers behind the spread are format and location specification. Buffalo Wild Wings operates a 6,000 to 8,000 square foot full-service box with restaurant-grade kitchen equipment, a full bar, and liquor compliance. McDonald's operates a 4,000 to 5,000 square foot drive-through-anchored box on a freestanding pad site, with a real-estate transaction folded into the franchise structure under McDonald's ownership of the underlying land or lease in most deals. Subway operates a 1,000 to 1,200 square foot build inside retail shells, gas stations, universities, and highway rest stops, which compresses every line of Item 7.
For Marcus, the composite buyer above, the Item 7 stage already narrows the field. McDonald's franchisee qualification typically requires liquid capital materially above the Item 7 floor and net worth in the high seven figures, plus restaurant operating experience that he does not have. Buffalo Wild Wings exits the conversation outright on the capital line. Subway is the only one of the three that survives Item 7 review for his profile.
The royalty stack: what franchisees pay every week
Item 7 is the one-time number. Item 6 is the every-month number. Combined royalty plus ad fund compounds over a 10-year agreement, and the Item 6 ordering inverts the Item 7 ranking: the cheapest brand to open is the most expensive brand to operate.
Subway charges 8.0% royalty plus 4.5% ad fund for a combined 12.5%. McDonald's charges 4.0% royalty plus 4.0% ad fund for a combined 8.0%. Buffalo Wild Wings charges 5.0% royalty plus 3.8% ad fund for a combined 8.8%. The 4.5-percentage-point spread between Subway and McDonald's is the largest gap in the QSR top 10 for combined Item 6 fees.
| Brand | Royalty | Ad fund | Combined | 10-year burn on $1M AUV |
|---|---|---|---|---|
| McDonald's | 4.0% | 4.0% | 8.0% | $800K |
| Buffalo Wild Wings | 5.0% | 3.8% | 8.8% | $880K |
| Subway | 8.0% | 4.5% | 12.5% | $1.25M |
McDonald's sits at the structural floor for ongoing fees among national QSR brands. Buffalo Wild Wings is close behind, consistent with a post-acquisition negotiating posture under Inspire Brands ownership (Buffalo Wild Wings was acquired in 2018 for $2.9 billion). Subway sits at the top of the QSR fee distribution, and the spread widens further at higher AUVs because both rates are revenue-based. The royalty calculator projects the cumulative dollar gap across a 10-year term for any AUV assumption.
A day in the economics
At Subway, $100 of customer spend pays $8.00 in royalty and $4.50 in ad fund, leaving $87.50 before food, labor, rent, and debt service.
At Buffalo Wild Wings, the same $100 pays $5.00 in royalty and $3.80 in ad fund, leaving $91.20.
At McDonald's, the same $100 pays $4.00 in royalty and $4.00 in ad fund, leaving $92.00. Note that McDonald's franchisees also pay rent to the franchisor in the majority of deals (the real-estate component is structured separately from the Item 6 stack), which materially changes the headline read.
The punchline: McDonald's retains $4.50 more per $100 of customer spend than Subway before any operating cost is counted. On a $4.0M AUV McDonald's unit, that 4.5-point delta is $180,000 per year in franchisor-fee savings. On a sub-$500K Subway unit, the absolute dollar gap is much smaller, but the percentage drag on already-thin margins is severe.
Item 19: who tells you what franchisees actually earn
Item 19 is optional under FTC Rule 436. Franchisors choose what to disclose. McDonald's discloses. Buffalo Wild Wings discloses. Subway does not.
McDonald's 2026 FDD Item 19 reports a $4.0M average unit volume across its US franchised locations. Buffalo Wild Wings' 2026 FDD Item 19 reports a $3.6M AUV. Subway's 2026 FDD omits Item 19 entirely. For a 19,502-unit US system, the absence is the story. A prospective franchisee evaluating Subway has no franchisor-disclosed revenue benchmark and must triangulate from FranchiseBusinessReview surveys, franchisee forum posts, and sample P&Ls from existing operators willing to share. That pushes diligence from a 30-day exercise to a 90-day exercise, and it pushes the loan-officer conversation from a clean AUV underwrite to a comparables-based estimate. Our Item 19 financial performance breakdown covers what each disclosure tier signals.
By the numbers
2.67× McDonald's revenue-to-investment ratio ($4.0M AUV on a $1.5M Item 7 floor). The QSR category median sits at 2.4×.
(Source: Item 7 and Item 19, McDonald's 2026 FDD; FranchiseLens industry benchmark, n=142)
For Marcus, the Item 19 disparity is the line between McDonald's and Subway as a serious financial bet, and it is the line he is least able to bridge without a disclosed AUV. Subway's $239K floor is well within his liquid, but every cash-flow projection he builds on top of that floor depends on a number Subway will not give him. McDonald's fits the underwriting model cleanly because the franchisor publishes the figure. Whether McDonald's is reachable is a separate question; whether the math is computable is not.
Unit count and growth: what Item 20 shows
Item 20 discloses opens, closes, transfers, and terminations year over year. Unit count trajectory is the single most predictive signal in the FDD, because a brand that cannot grow its own system cannot attract new operators at scale, and a brand that is shrinking creates resale-liquidity risk for any 10-year exit.
McDonald's added units at a 0.8% rate in its most recent disclosure period, reaching 13,559 US locations in its 2026 FDD. That works out to roughly 108 net openings on a base of 13,451. Buffalo Wild Wings contracted by 0.2%, holding roughly flat at 1,183 units. Subway contracted by 3.1%, from approximately 20,120 to 19,502 US units, which translates to roughly 620 net closures in a single filing year.
The 600-plus Subway closures are not evenly distributed. Subway's Item 20 shows the contraction concentrated in non-traditional venues (gas stations, mall food courts, highway rest stops), with standalone street-facing stores closing at a lower rate. The operational read: Subway is trimming its weakest real-estate tier rather than bleeding across the category. That is a deliberate portfolio action by Subway's parent under Roark Capital ownership. It is still a negative signal for a buyer evaluating a new standalone build, because portfolio contraction raises questions about resale value over a 10-year hold.
McDonald's 0.8% growth rate is unspectacular in absolute terms but historically rare for a 13,000-plus-unit system. Most QSR brands at that scale stop growing in their home market. McDonald's continued positive net unit change reflects new format rollouts (CosMc's pilot, modernized drive-throughs, and ghost-kitchen partnerships) and selective rebuilds rather than greenfield expansion.
Turnover separates the three brands sharply. McDonald's reports an Item 20 franchisee turnover rate of 0.2%, which translates to roughly 27 transfers or terminations per year across the system. Subway's 4.5% rate translates to approximately 878 franchisees exiting per year, which in absolute terms is roughly 74% of Buffalo Wild Wings' entire US footprint leaving one brand every twelve months. McDonald's turnover floor is partly a function of capital-intensity (a $1.5M to $2.7M investment is harder to walk away from), but the absolute level still reflects franchisee retention that no other QSR brand at scale matches.
The math
620 Approximate net Subway closures per year, implied by a 3.1% contraction on a 19,502-unit base. That is more units lost annually than McDonald's adds (~108) and roughly half of Buffalo Wild Wings' total US footprint.
(Source: Item 20, Subway and McDonald's 2026 FDD)
Litigation: what Item 3 actually shows
Item 3 of the FDD requires franchisors to disclose pending and recent litigation. Raw counts must be normalized against system size to be useful. Per 100 units, the three brands separate cleanly.
| Brand | Item 3 (3-year count) | Per 100 units | Annual turnover count |
|---|---|---|---|
| McDonald's | 15 | 0.11 | ~27 |
| Buffalo Wild Wings | 3 | 0.25 | ~13 |
| Subway | 84 | 0.43 | ~878 |
Subway's 84 disclosed actions over three years concentrate in three recurring categories per Item 3 disclosures and public filings: franchisor-initiated contract-enforcement matters, franchisee-initiated territory and pricing-mandate disputes, and consumer-facing class actions in which Doctor's Associates (Subway's legal entity) is named alongside individual franchisees. The most widely reported is Amin v. Subway Restaurants, a class action over tuna ingredient labeling. The Northern District of California dismissed the case in 2023 after the plaintiff moved for voluntary dismissal with prejudice. Subway won the case. It still spent three years of litigation budget on it, which is the read a prospective franchisee should take from a high Item 3 count: operational friction, not necessarily wrongdoing. Our breakdown of hidden risks in franchise agreements walks through how to read litigation density in context.
McDonald's 15 actions over three years are a low count for a 13,559-unit system, but the docket includes some of the most consequential cases in QSR. The Byron Allen Entertainment Studios suit alleging discriminatory advertising-spend allocation against Black-owned media companies was settled in March 2024 (covered in Reuters and the Wall Street Journal). The Robinson v. McDonald's Corp. class action filed in 2020 by former Black franchisees alleging systemic underperformance of assigned territories remains in litigation. These are reputational rather than operational matters for an individual buyer, but the franchisor-level legal exposure is part of the diligence picture.
Buffalo Wild Wings' three actions in three years are the lowest in the comparison set. The brand's most visible recent legal exposure has been consumer-class takeout-fee complaints filed in multiple states (covered in Restaurant Business and QSR Magazine) rather than franchisee-initiated disputes. For a 1,183-unit system, three Item 3 actions over three years sits at the QSR median.
Green, yellow, and red flags by brand
Each scorecard summarizes the full Item-by-Item review. Each flag is a specific data point we would raise on a buyer diligence call.
Which brand fits which buyer
For the capital-light first-time operator (liquid $100K to $400K): Subway is the only one of these three that clears Item 7. The trade-off is structural: 12.5% combined fees on top of an undisclosed AUV, in a system contracting 3.1% per year. Subway's accessibility is real, but it pairs with the weakest disclosure profile and the worst trajectory of the three. Buyers at this capital tier are typically better served by a food and beverage franchise brand outside the Subway scale tier that does disclose Item 19, which is the comparison the Buffalo Wild Wings vs Wingstop vs Subway breakdown addresses directly.
For the experienced multi-unit operator with liquid above $1M and restaurant or franchise operating history: McDonald's is the strongest bet on unit economics in the comparison. A $4.0M AUV at an 8.0% combined fee, paired with 0.2% turnover and a positive growth rate, supports a development deal even after the franchisor-controlled real-estate component is folded in. The qualifying gate excludes most buyers from this conversation, but for those who clear it the underwriting math is the cleanest in QSR.
For the capital-rich casual-dining operator with $1M-plus liquid and willingness to manage a full-service box: Buffalo Wild Wings re-enters the conversation. A $3.6M AUV, 8.8% combined fee, and a low Item 3 count support a multi-unit deal. The trade-off is the 0.2% system contraction, which raises legitimate questions about resale value at the 10-year mark.
For Marcus, the composite buyer at the top: the 2026 FDDs effectively force a single-option answer. McDonald's is gated out by the franchisee qualification line. Buffalo Wild Wings is gated out by both the capital line and the operating-experience line. Subway is reachable, but the Item 19 omission means he has to underwrite the deal on triangulated comparables rather than a franchisor-disclosed AUV. The right move for Marcus is to widen the comparison set beyond these three before signing anything, which is the diligence question set every first-time buyer should run.
Frequently asked questions
Which is the best fast food franchise to own in 2026?
On 2026 FDD data, McDonald's has the strongest unit-economics profile of the major QSR brands: $4.0M AUV (Item 19), 8.0% combined fee (Item 6), 0.2% turnover, and 0.8% net unit growth. Reachability is the catch. McDonald's franchisee qualification typically requires high seven-figure net worth and restaurant operating experience. For buyers under that gate, the comparison shifts to brands that disclose Item 19 at lower investment tiers.
How much does it really cost to open a Subway vs McDonald's franchise?
Per Item 7 of the 2026 FDDs, Subway opens for $239K to $537K. McDonald's opens for $1.5M to $2.7M. The 6× spread reflects format and real estate. Subway operates a 1,000 to 1,200 square foot build inside retail shells. McDonald's operates a 4,000 to 5,000 square foot freestanding pad-site box, with the real-estate transaction folded into the franchise deal structure under McDonald's control of the underlying lease in most cases.
Why does Subway not disclose Item 19?
Item 19 is optional under FTC Rule 436. Franchisors may include or omit financial performance representations. Subway has historically declined to publish Item 19 data in its FDD, which means prospective franchisees cannot rely on a franchisor-provided revenue benchmark. Subway sits in the non-disclosing tier alongside several other top-30 QSR brands. The absence is legally permitted, but it shifts the underwriting burden entirely onto the buyer.
What are the ongoing fees for a McDonald's franchise?
Per Item 6 of the 2026 McDonald's FDD, the combined ongoing fee is 8.0% of gross sales: a 4.0% service fee (royalty equivalent) plus a 4.0% advertising contribution. That figure does not include rent, which McDonald's franchisees pay separately to the franchisor in the majority of deals because McDonald's controls the underlying real estate. The rent component is structured outside Item 6 and varies materially by location.
Is Buffalo Wild Wings a good franchise investment in 2026?
Buffalo Wild Wings' 2026 FDD shows a strong unit-economics profile (8.8% combined fee on a $3.6M AUV) and a low litigation count (3 Item 3 actions over three years). The brand contracted 0.2% in net units in the most recent disclosure period, which is close to flat but signals limited new-territory availability. For an experienced multi-unit operator with liquid above $1M, Buffalo Wild Wings is a defensible bet. For first-time operators, the $2.5M Item 7 floor and full-service operator gate disqualify the brand at the capital line.
What the FDDs do not cover
FDDs are static disclosures filed annually. They do not capture mid-year operational changes, franchisor leadership transitions, local market saturation, post-filing litigation, or commodity inflation that compresses unit-level margins between filings. The 2026 FDDs for Subway, McDonald's, and Buffalo Wild Wings reflect operating data through roughly December 2025. The next cycle will capture early-2026 unit performance and any newly filed actions. A buyer evaluating any of these brands should request the most recent monthly unit-count and opens-and-closes data directly from each franchise development team and should run a lawyer's mark-up of the franchise agreement alongside the FDD, not after.
Full FDD breakdowns on FranchiseLens: Subway, McDonald's, Buffalo Wild Wings.