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A breadwinning formula

Written by Josh Russell on Friday, 04 October 2013. Posted in Interviews

When it comes to franchising, Subway is certainly setting the gold standard

A breadwinning formula

If you asked a UK citizen to name a franchise, it wouldn’t be long before they hit upon Subway. Arguably one of Britain’s most recognisable franchises, the growth of the global submarine sandwich chain has been absolutely phenomenal, especially as it arrived on our fair shores less than two decades ago. Having now reached the towering heights of being the world’s largest restaurant operator, it’s evident that the franchise model has worked incredibly well for Subway.

The seed of Subway was first sown when founder Fred DeLuca was looking for a way to fund his studies in medicine; his friend Pete Buck suggested he started a sandwich shop and lent him $1,000 to help get the outlet off the ground. Originally launched in 1965 under the rather inauspicious name ‘Pete’s Super Submarines’, the store quickly scaled and added more outlets, eventually taking the name ‘Subway’ in 1968. And by 1974, DeLuca had begun to look to other expansion methods. As Trevor Haynes, Subway’s area development manager explains, “After Fred got to a small number of stores, he started to look to franchise and that was when it really took off.”

However, it wasn’t until 1996 that the sandwich shop was finally brought to Blighty’s high streets by a pair of entrepreneurs already familiar with the franchise’s system. “They were franchisees in Canada,” says Haynes. “They’d been very successful there and they decided ‘we could try the UK, we’ll look at Brighton’.”

Given the sub is such a uniquely American foodstuff, it’s not hard to see why there might have been some translation required for British audiences to get a handle on what the Subway experience is all about. “Initially people wanted things like butter or they thought ‘where’s the train station?’” laughs Haynes. But it didn’t take long for the public to fall in love with the humble hoagy. “It started to catch hold and really took off,” he says. “People loved the fact that you could choose so many different proteins and salad options.”

With time, Subway began to gather steam. From its modest beginnings in Britain’s premier seaside city, the franchise has mustered an impressive 1,685 outlets across the UK and Ireland. Despite experiencing the same slowdown as most enterprises during the shaky economic climate from 2008 - 2010, the franchise has definitely shifted into a new gear in the last decade. “It’s been developing at a phenomenal pace, particularly since the mid-2000s,” Haynes says. “We’re seeing some fantastic results coming through this year – we’re topping out at about 150 - 160 new locations so it’s really positive.

Explaining this expansion isn’t easy without first understanding just how flexible the Subway model has become. First of all, the company is moving beyond standard outlets and using the system’s versatility to spread the brand even further still. “We’re really focused on non-traditional stores. They could be stores in petrol filling courts, train stations or airports,” Haynes explains.

Subway has always been focused on delivering its products wherever and whenever its customers are. “We’ve got locations in high streets near nightclubs – they will be, between 1am and 3am, absolutely rammed with people,” says Haynes. And outlets in places like the London exhibition space ExCeL mean that the brand has a reach that extends far beyond the high street. “As long as there are people around to be served, we can to get to them,” he adds.

A lot of noise has been made about Subway’s position as a healthier fast-food alternative. “It can be a relatively healthy option,” comments Haynes. “There’s a little bit there for everyone; you can have just a ham salad sub or you can have something like chicken teriyaki with triple jalapeños.” And this is a market in which the franchise is committed to maximising; it is avidly working to support the government’s ‘Responsibility Pledges’ to remove all trans-fats from its menu, lower the sodium and calorie content of its meals and it already clearly displays all the nutritional content of its products. “We’re working really hard to ensure it can be as healthy as possible without jeopardising the integrity of the product or its taste profile,” Haynes goes on to say.

These factors have helped capture the consumers and franchisees obviously continue to follow suit. “People eat it all day long and even into the evening because it does have that ‘made for you as you want it, made to order’ aspect,” Haynes says. “That’s very appealing for franchisees.” And a relatively low franchise fee of £8,500, coupled with a straight-forward service model, just helps to sweeten the deal.

However, franchisees obviously aren’t just left to their own devices after signing on the dotted line. Out of the gate, the franchisee is placed for 40 hours hands-on experience in a store to get a feel for the offering and given access to a range of e-learning courses. Once completed, their next destination is the UK and Ireland training centre based in Cambridge.

“When they come into the classroom, it’s a very intensive two weeks teaching controls and the aspects of the business they need to be a success,” explains Haynes. “They’ll also do more in-store training to ensure they really understood all aspects of food handling and hygiene.”

On top of this, once a franchisee has graduated from this training, they are given 70 hours of opening assistance from one of the organisation’s field consultants to ensure they have the support they need in getting their outlet trading.

But Subway hasn’t just been a hit with its customers and franchisees. Over the course of the last two decades, the brand has won the top spot in US-based Entrepreneur Magazine’s Franchise 500 an astonishing 15 times. “It allows flexibility; that’s why we’ve been able to win such awards,” Haynes says. Because of this, the franchise is booming, now having more than 40,000 stores across 100 countries and achieving impressive growth in all manner of markets, including Eastern Europe, Russia, China and Brazil.

Haynes concludes: “It’s open to lots of nationalities and lots of different cultures because of the simplicity that allows individuals to become really entrepreneurial.” 

About the Author

Josh Russell

Josh Russell

When he isn’t tooling around on trains in a tux like the Daniel Craig of the Greater Anglia transport system, Russell spends his time living the glamourous life of an enterprise journalist, judging Digital Business of the Year at the National Business Awards and attending conferences like NixonMcInnes’ Meaning 2013. However, like all good secret agents, Russell lives a double life – in his case, as a closet revolutionary. Social enterprise, sustainable business and collaborative practices are his true passions, something that he has had plenty of opportunity to air in his features here at Elite Franchise.

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