Poised for worldwide growth

Aiming to open another 2,800 SUBWAY restaurants throughout the world in 2006, the sandwich chain is poised for tremendous growth around the world. SUBWAY's European Regional Director Kevin Graham reports

Continuing to celebrate its 40th year in the quick-serve restaurant industry, with more than 25,000 locations in 84 countries, the SUBWAY® chain is poised for tremendous growth around the world. In 2005, the SUBWAY® chain opened more than 2,400 locations, which represents an impressive 3.5 million square feet of additional retail space leased in one year. The chain's target for 2006 is to open another 2,800 SUBWAY® restaurants throughout the world.

The SUBWAY® organisation recently announced the opening of its 3,500th location outside North America. Interest in developing the SUBWAY® brand internationally is so great that entrepreneurs from Bahrain to Brazil and from Sweden to South Africa opened more than 800 SUBWAY® outlets in the past year.

The chain's international locations now account for 22 per cent of the total SUBWAY® chain, up by 1.3 per cent from a year ago. The SUBWAY® chain expects that a full 44 per cent of new locations opened during 2006 will be in international markets.

The company has firmly established itself in Europe, an excellent base from which to expand. SUBWAY® restaurants have now overtaken the number of McDonald's outlets in the US, Canada, Australia and New Zealand. This is a trend that is expected to continue throughout the European continent over the coming years.

The European market is very important for the SUBWAY® chain and in 2002, the company opened a European headquarters in Amsterdam to manage growth and oversee operations in the region. By 2010, the chain's target is to have opened 4,000 restaurants across Europe and it is already well on track to achieving this milestone.

Although Australia and New Zealand, at 1,063 outlets, are the international champions with respect to the number of SUBWAY® locations outside of North America, the UK and Ireland are leading the way in Europe, with more than 650 SUBWAY® outlets combined, while Germany is also rapidly expanding with more than 300 SUBWAY® restaurants. The SUBWAY® chain currently has nearly 1,200 locations open in 24 European countries such as France, Greece, Hungary, Portugal and most recently, Slovenia.

"There are many exciting opportunities in Europe for those interested in becoming SUBWAY® franchisees or development agents," says Mike Charest, the European Profitability and Marketing Manager.

The SUBWAY® chain's Area Development Manager for the UK and Ireland, Kevin Graham, says: "The UK and Ireland is seen as the gateway to Europe for the SUBWAY® brand and the chain uses the expansion here as an example of how efficiently and effectively it can be carried out in international markets."

According to Mintel's Sandwiches - UK Report, Leisure Intelligence, July 2003 - the SUBWAY® chain became the largest sandwich specialist in the UK and Ireland with more outlets than any other chain in the category, including Pret A Manger and O'Brien's. "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 McDonald's," adds Graham.

Not resting on one's laurels is a mantra of the SUBWAY® restaurant chain. As the chain grows in size, it must also find new avenues to reach consumers. In addition to international development as a way to broaden the brand's scope, it has successfully found inroads, and customers, in non-traditional outlets. In SUBWAY® speak, the term non-traditional translates to locations where you might not expect to find a fully functioning restaurant, such as at an airport, a hospital or a grocery store.

Today, the SUBWAY® chain boasts more the 5,700 non-traditional locations, including more than 3,200 branches at convenience stores and filling stations, 200 on college and university campuses and units within 1,000 Wal-Mart stores. In fact, SUBWAY® sandwich shops have opened in some very unique venues such as an aluminum smelting plant in New Zealand, a car wash in Toronto, a Lexus showroom in California and even a church in Buffalo, New York, which is operated by the church to help provide job skills to underprivileged youth in the community.

A unique aspect that distinguishes the SUBWAY® brand from the competition is its reputation for offering a healthier alternative to traditionally fatty fast food. Successfully marketing the favourable nutritional values of many of its core menu items, the chain was able to educate consumers that they did not have to give up taste in order to reduce their fat and caloric intake. To illustrate that point, the SUBWAY® chain's television commercials in the US often feature a 190-pound everyman named Jared Fogle who lost an amazing 245 pounds in a diet and exercise programme of his own design that included eating nothing but SUBWAY® sandwiches for almost a year.

Jared first came to the attention of SUBWAY® executives in 1999 as the subject of a feature article in a popular health magazine. In January of 2000, his first of dozens of commercials for the sandwich chain aired, launching Jared well on his way toward achieving celebrity status.

Today, Jared is a constant fixture on television and is a frequent guest of news and talk shows and the subject of countless newspaper and magazine articles. On the road for about 250 days a year, Jared travels the world on behalf of the SUBWAY® chain, telling consumers and students about his miraculous weight loss success and the importance of eating right and maintaining an active lifestyle.

All SUBWAY® restaurants are individually owned and operated by franchisees that pride themselves on being good neighbours and active members of their communities. In fact, about 70 per cent of new SUBWAY® franchises are purchased by people already in the SUBWAY® system. According to Don Fertman, the chain's Director of Development: "Once a franchisee has a taste of the business, they often come back for more."

The SUBWAY® chain began selling franchises in 1974, nine years after the chain was established. The company has been fine-tuning and developing its franchise system ever since. The system is both efficient and effective, proving itself time and time again around the world. The SUBWAY® chain isn't showing any signs of slowing down. Its growth continues to break records and make franchising history. In January of 2006, SUBWAY® restaurants were once again named the number one franchise opportunity in Entrepreneur magazine's 'Franchise 500' rankings, making this the 14th time that the company has won this prestigious honour.