Subway Franchises

Subway Franchises - Can you imagine how many people dismissed the idea of a restaurant that only served cold sandwiches, before the idea took off? I can hear them now: “You’ll never get rich doing that!” Well, a guy named Fred De Luca borrowed $1000 in 1965 to start a sandwich shop, at the time intending to raise money for college. By 2008, Subway restaurants have 28,000 locations in 86 countries, with a gross income of $9 billion dollars. Forbes magazine names De Luca as the 242nd richest American with a net worth of $1.5 billion.

So there! Do you think maybe he decided to skip college?

Subway is now the third largest fast food chain in the world, beaten only by McDonalds and Yum Brands (who own Taco Bell, KFC, Pizza Hut, Long John Silver’s, and A&W Restaurants). They got here almost entirely by franchising. In fact, they take it a step farther; there are no company-owned restaurant locations today. Instead, local franchisees operate the stores, and not only that, but Subway enters into contracts with the franchisees to be its development agent for different geographic locations. The development agents, franchisees themselves, then sell franchise contracts for their area.

This has enabled fantastic flexibility and nimbleness in development. There are Subways inside of 900 Walmart stores. There are Subways on military bases and inside casinos. There are subways conveniently located on college and university campuses - there, see, De Luca got to go to college after all! And there are three Subways located inside the United States Pentagon in Arlington, Virginia.

Well, now that we’ve breathlessly recited the stats, of course we know that Subway is a franchisee’s ideal opportunity. The Subway operation offers training, financial assistance, and assistance with locating, advertising, supply ordering, and other operational needs. The company brags that it works very closely with franchisees, and since the development agents program means that you’ll be working with a franchisee yourself, that is a claim that is very easy to believe.

Subways are unique in another way as well. Their advertising is handled through a percentage of franchise sales, which go into the Subway Franchisee Advertising Fund Trust and s operated by a board of directors voted on by Subway Franchisees. Yes, we said “voted”! As a franchisee, you get some say in how the company is run! This is how we get TV commercials with “Eat fresh!” as their slogan. By the way, look for preferred purchasers in the franchise contract, since as with any fast food chain, they want to control quality of supplies and ingredients.

Start-up costs also range through a variety of brackets. From about $80,000 to $250,000, depending on a lot of variables. Subway is one organization which stretches to fit the space allotted. They can be a mini-sub shop wedged into a corner of the mall or a full restaurant offering not only submarine sandwiches, but breakfast items and pizza as well. In addition, some Subways have branched out into ethnic/denominational specialty. There are certified Kosher Subways, and the Subways in Muslim countries serve Halal menus.

It is nearly guaranteed that there is a place for anybody within Subway’s restaurant franchising empire. And you can expect that they’ll continue to expand in the coming years.