Subway Franchise

Subway is the name of a multinational restaurant franchise that mainly sells sandwiches and salads. Fred De Luca and Peter Buck founded it in 1965. The corporate name of Subway is Doctor's Associates, Inc. (DAI). The company has 26,793 franchised units in 85 countries as on November 21, 2006 and is the fastest growing franchise in the world. This rapidly growing chain added over 2,000 locations in 2005. He first franchised Subway unit opened in 1974 in Wallingford, Connecticut.

In addition to its corporate positioning as a more health conscious restaurant, much of Subway's rapid growth can be attributed to its somewhat unique business model. Unlike most franchisers, the parent company does not operate any restaurants. Local franchisees operate the stores, and in most markets, Subway enters into a contract with a franchisee to be its Development Agent for that market. The Development Agent is then responsible for developing new locations, evaluating stores on a monthly basis, and assisting franchisees with whatever needs they may have. 8% of sales at each location go to royalties, while 4.5% of sales go into a fund, the Subway Franchisee Advertising Fund Trust, also known as SFAFT, which is operated by a board of directors voted on by Subway Franchisees. For franchisees, the Subway chain offers an equipment leasing program as well as franchise fee assistance for minorities. For existing owners, the Subway chain offers remodeling, relocation and expansions loans.

Each franchisee candidate is required to attend a two week training course. The course teaches business concepts, methods of operation and basic management skills. The time is spent in the classroom and on site at local Subway restaurants for "hands on" experience. At the end of the two weeks, each attendee must pass a comprehensive exam in order to become a Subway franchisee. There is also a franchisee training center in Miami FL, Australia, China, Canada, Germany, India, Korea, Lebanon and Russia. There are also courses for managers, multi unit owners, field consultants and development agents.

There are strict rules about the cleanliness and proper handling of food at the outlets. Gloves are required to be worn during all food handling procedures. Also, all franchises are provided with detailed information on proper food handling procedures in order to properly train their crewmembers. Topics that are covered include proper hand washing and glove use procedures, and food rotation. Food is prepared fresh daily and temperatures are monitored regularly. Also, a Serve Safe food safety program is offered to franchisees and other field staff from the greater New England area at the Subway chain’s headquarters. Franchisees in other regions are encouraged to take the course in their local area

New Subway franchises are opening at the rate of about 1,000 per year an indication that this system will continue to be the leader in its category for many years to come. Subway franchise opportunities are still ripe for the picking.

To appreciate this opportunity and become a successful and satisfied franchisee, your role will be focused more on managing the business rather than engaging in the “front line” operations: making the sandwiches. That means you will be looking after scheduling, buying, payroll, and other franchisee matters while ensuring that your patrons' appetites are satisfied to the fullest.

Owning a Subway franchise will not be a walk in the park, especially if your success leads you to owning multiple locations. If you plan to own just one location, be prepared to spend a lot of your time in the back office and managing employee performance. The financial investment is reasonable and makes you an attractive income if you select a viable location.