One major franchise that needs a small investment and provides 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 bread 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 that includes the names, addresses, and cell phone numbers of active franchise holders, listed by state. Subway encourages the prospective franchise buyer to see and observe the restaurant in which these are training. The first 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 by the franchisee ranges from $94,300 to $222,800, depending on location and equipment needs. Nontraditional locations may require considerably less capital.
Subway units are located in a wide range of sites including schools, colleges, offices, hospitals, airports, military bases, food markets, and truck stops-even casin.os. Most remarkable will be the company’s statement that lower than 1 percent from the units fail, that is 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 typical subway breakfast menu, however, cannot be omitted.
No person should invest in a Subway franchise-or some other restaurant-without backup learning and experience. Subway franchise buyers attend the Franchise Training Course at headquarters at their particular expense. Some 2,000 franchisees every year attend the two-week course covering management, accounting and bookkeeping, personnel management, and marketing. On-the-job training in nearby Subway restaurants is scheduled as well, totaling 34 in-store hours.
3 to 4 trainees are assigned to a training restaurant. The buyer pays a weekly franchise fee of 8 percent along with a 3.5 percent advertising fee based on sales. The customer has the choice of life insurance; medical insurance is an additional purchase option. Each franchise buyer gets a copy of the confidential operations manual containing about 580 pages. Menu Selection Subway’s flexibility in offering service in various locations can also be noticed in the kinds of food offered: submarine sandwiches, salads, cookies, a low-fat menu featuring sandwiches with lower than 6 grams of fat, and a low-carb option featuring wraps.
Subway features bread things that 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, in which 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 such as apple pie.
Subway History The Subway story began when Fred DeLuca, its cofounder, was 17 years of age. 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 produce and was implemented having a loan of $1,000 from Dr. Buck. The very first restaurant was opened in Bridgeport, Connecticut, in 1965.
It did well in its 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 christmas hours.” When summer ended, so did most of its sales. Dr. Buck suggested tjyxda a second restaurant. ”That way people will see us expanding and feel that we’re successful.” It had been not until that they had five stores and much better locations that this stores began making profits. DeLuca has changed the company’s system of franchise development several times over time and has kept the idea easy and relatively inexpensive for franchise buyers.