One major franchise that will require a low investment and gives a range of possible locations to franchisees is Subway, owned by Doctor’s Associates, a Florida corporation with headquarters in Milford, Connecticut. Started in 1965, subway restaurant has greater than 25,278 units in 83 countries and annual sales exceeding $3.9 billion.
Subway publishes a franchise-offering circular for prospective franchisers which includes the names, addresses, and phone numbers of active franchise holders, listed by state. Subway encourages the potential franchise buyer to see and see the restaurant where these are training. The primary fee is $15,000 for first-time franchise buyers. This fee is reduced to $4,000 for qualified owners purchasing additional franchises. Total initial investment from the franchisee ranges from $94,300 to $222,800, based on location and equipment needs. Nontraditional locations may require much less capital.
Subway units are situated in a wide range of sites including schools, colleges, offices, hospitals, airports, military bases, grocery stores, and truck stops-even casin.os. Most remarkable is the company’s statement that less than 1 percent in the units fail, which can be partly taken into account by franchise holders’ choices to sell their unit or resell it for the company. According to company approval, the area, hours of operation, and extra food items offered are flexible. The conventional subway menu with price, however, should not be omitted.
Nobody should buy a Subway franchise-or some other restaurant-without backup learning and experience. Subway franchise buyers attend the Franchise Training Curriculum at headquarters at their own expense. Some 2,000 franchisees annually attend both-week course covering management, accounting and bookkeeping, personnel management, and marketing. On-the-job learning nearby Subway restaurants is scheduled as well, totaling 34 in-store hours.
Three or four trainees are allotted to a training restaurant. The customer pays a weekly franchise fee of 8 percent as well as a 3.5 percent advertising fee according to sales. The purchaser has a choice of life insurance; medical health insurance is another purchase option. Each franchise buyer gets a copy of any confidential operations manual containing about 580 pages. Menu Selection Subway’s flexibility in offering service in various types of locations is also observed in the types of food offered: submarine sandwiches, salads, cookies, a minimal-fat menu featuring sandwiches with under 6 grams of fat, as well as a low-carb option featuring wraps.
Subway features bread items which are prepared from frozen dough and served fresh from the oven. The frozen dough is thawed in a retarder unit in a refrigerator. The bread rises in a proofer and is also then baked in a convection oven, wherein a fan speeds the baking process. Bread formulas are specified at company headquarters and uniformly followed worldwide. Fresh-baked goods include white and wheat scored bread, deli-style rolls, wraps, breakfast selections (at some stores), cookies, and specialty items like apple pie.
Subway History The Subway story began when Fred DeLuca, its cofounder, was 17 yrs old. He along with a family friend, Dr. Peter Buck, worked together on a business plan for a submarine sandwich shop. It took them four hours to create and was implemented with a loan of $1,000 from Dr. Buck. The very first restaurant was opened in Bridgeport, Connecticut, in 1965.
It did well in the first summer with the aid of advertising slogans like ”Put a foot in your mouth,” emphasizing the foot-long sandwich, and ”When you’re hungry,make tracks for subway hours.” When summer ended, so did most of its sales. Dr. Buck suggested tjyxda a second restaurant. ”That way individuals will see us expanding and believe that we’re successful.” It was not until they had five stores and locations the stores began making money. DeLuca has changed the company’s system of franchise development many times over time and contains kept the idea easy and comparatively cheap for franchise buyers.