Subway is targeting fast food market leadership in every country it enters. Its public relations manager Kevin Kane reflects on the company's efforts to achieve this across Europe
It is predicted that 25 years from now, the most successful franchisors will have 50,000 outlets worldwide... wherever franchise companies are today, they are just scratching the surface. The future holds many opportunities, especially for those businesses that are able to effectively develop as an international brand.
With more than 21,000 locations in 75 countries, the Subway chain is poised for tremendous growth around the world. Last year, Subway opened more than 2,700 locations, which represents a massive 3 million square feet of prime retail space leased in 2003. The chain's next target is to open an additional 3,300 Subway restaurants this year.
While much of its network is based in North America, the chain's focus has shifted to its international operations. Subway recently announced the opening of its 2,000th store outside the US and Canada which, depending on who you believe, took place in any of 11 locations in Australia, Germany, Mexico, New Zealand or the United Kingdom. Such is the global interest in the company, all 11 opened within the same time period, tying for the honour of being the landmark location.
Subway's international locations currently account for 9.5% of the total Subway chain, up 1.5% over the last year, and another 800 international locations are expected to open by the end of 2004. The company has firmly established itself in Europe, which is proving an excellent base from which to expand - as has happened in the US and Canada, Subway has now overtaken the number of McDonald's outlets in Northern Ireland and this trend is set to continue across the continent over the coming years.
The European market's importance for the Subway chain was revealed in 2002, when the company opened a European headquarters in Amsterdam to manage growth and oversee operations in the region. By 2010, Subway's target is to have opened over 4,000 stores across the region and it is already well on track to achieving this milestone. The UK and Ireland are leading the way with over 270 Subway outlets now open across both countries, while Germany and Spain are also rapidly expanding with over 88 and 28 stores respectively. In total, Subway is currently present in 22 countries across Europe, including France, Finland, Netherlands and Austria. Mike Charest, Subway's European profitability and marketing manager, points out that "there are still numerous exciting opportunities across the European continent for those that want to become Subway franchisees or even area development agents".
The chain's progress in the UK and Ireland continues to lead Europe, with a network of over 400 outlets across the two markets the target for the end of this year. "The UK and Ireland are seen as the gateway to Europe for Subway," observes Kevin Graham, Subway's area development manager for the UK and Ireland. "The franchise chain is going to use the expansion here as an example of best practice of how efficiently and effectively it can be carried out in international markets."
According to Mintel's Sandwiches' 2003 UK report on Leisure Intelligence, Subway became the largest sandwich specialist in the UK and Ireland with more outlets than any other chain in the category. "Subway is experiencing phenomenal growth in the area," Graham adds. "As well as opening over 270 outlets, we have sold a further 230 franchises which are due to be opened once we have found suitable properties. We have now set our sights on bigger fish than the specialist sandwich chains in the UK and Ireland - our next target is to have more outlets than Burger King, and then more than McDonald's."
All Subway restaurants are individually owned and operated by franchisees that pride themselves on being good neighbours and active members of the community. An interesting fact is that about 70% of new Subway franchises are purchased by people already in the Subway system. Don Fertman, Subway's director of franchise sales, reflects: "Once franchisees have a taste of the business, they often come back for more."
Over the many years that the Subway chain has been operating, the company has fine-tuned and developed its franchise system. Both efficient and effective, it proves itself time and time again around the world. The Subway chain isn't showing any signs of slowing down, its growth continuing to break records and make franchising history. In 2004, Subway Restaurants was once again named the 'Number One Franchise' in Entrepreneur Magazine's 'Franchise 500' rankings, making this the 12th time that the company has won this prestigious honour.
Its philosophy that fast food does not have to compromise a healthy approach to meals has earned Subway a reputation for offering a healthier alternative to traditionally greasy and fatty fast food. Its fresh, nutritious, made-to-order sandwiches are prepared just the way the customers like them, right before their eyes. In fact, Subway's '7 Under 6' menu features seven delicious submarine sandwiches that contain six grams of fat or less, making Subway a popular choice in the quick-serve category for health-conscious consumers. With today's busy lifestyles, a meal on the go is often an everyday occurrence, yet many people are demanding more that just convenience - they want healthier choices. Subway's '7 Under 6' menu gives them exactly that - delicious low calorie and low fat options.
Subway fills the gap in the fast food arena by providing consumers with great tasting, healthier food and it is this, along with an excellent franchise system, which will see the chain continue to expand and prosper well into the future.