Subway- A sub-marine size franchise opportunity

By selling 312 sandwiches on the first day each one costing about 49-69 cents just to pay of their college debts and medical fees with a loan as minimal as a $1000, And now having its franchise spread across in 100+ countries with over 41,512 franchises locations in the world, that’s how a 17-year old boy started this sandwich giant which we now know by the name, Subway

Subway, in India was first established in Delhi in 2001 and ever since it has about 660 locations spread across the country with 60 restaurants being added annually through its franchise model, growing at the rate of 12-13% every year, We bet you’re hungry for this franchise opportunity, aren’t you!

About subway

Subway is an American privately held restaurant franchise that primarily sells salads and submarine sandwiches (subs).

Facts about subway

• Industry : restaurant
• Genre : fast food
• Founded : August 25th, 1965
• Founder : Fred DeLuca, Peter Buck
• Headquarters : Connecticut, USA
• Key people : John Chidsey, CEO

Everything you need to know about Subway franchise

Unique selling point (USP) : The unique selling point of having a subway franchise is the its competitive edge in :

• Offering fresh take outs and food, justifying by its tag line “eat fresh”
• Secondly, subway being the healthiest fast food restaurant chain among all the others catering to both the health and taste needs of consumers

Menu of subway

Business model of a subway franchise

The business model of a subway franchise can be defined using these four variants

Value proposition: The value which this franchise is likely to bring to you is:

• Benefit of owning one of the top 500 franchises of the 2018 entrepreneur 500 franchise list.
• Low investment costs and abundant marketing and franchise assistance by subway
• Wider target audience because of adaptation of westernisation in the food consumption patterns

Target consumers: The target consumers to your healthy-cum-fast food franchise restaurant are

•  Diet conscious millennials and baby boomer generation
• Students
• Working class
• Work-from-home consumers
• Budget-Savy consumers
• Online food delivery platforms
• Shopping malls
• Airports

Competitor review: It goes without saying that the competition the fast food restaurant business is as aggressive as it gets. But subway has a different genre of its own because of the product it offers.

However, the few key competitors of this franchise are

• McDonald’s
• Burger King
• Dominos
• Pizza Hut
• Organic-vegan based local restaurants and stalls
• Unorganised sandwich sector

Also read :

• How to start Domino’s Franchise
• How to start McDonalds Franchise

Marketing strategy: The marketing strategy that is implemented by subway is:

Advertising: Through tv commercials, billboards near airports, hoardings in an urban traffic prone area etc

Print media: Newspaper ads, blogs, articles etc

Listings: listing on google directories etc

Sales promotion: festive offers, combos etc

Benefits of starting a subway franchise

Wider target audience: The majority of the Indian population is the working class constituting 53% of it and the other majority being the Gen-Z which are the popular targets of subway because it promotes a healthy and diet conscious lifestyle

Low investment and high profit margin: Subway comes at low investment costs and also pre existing marketing and training supports extended by subway. It also yields a major portion of profit margin and expansion becomes easy

Brand familiarity: Because of being in operation since 65 years and ensuring localisation in taste like tandoori tofu, veg seekh in India and adding 8 new products annually to the menu subway has attracted many loyal customer and helps you enjoy brand familiarity

 Assistance by subway: Another benefit of this franchise is the supports and assistance extended by subway to your franchise in terms of the following:

• Two week training program
• Flexible floor plans
• National and local support
• National and regional advertising
• Store development assistance
• Design support
• Lease negotiation
• Construction guidance

Growing demand for ready-to-eat food: Because of the busy schedule and cost cutting practices and dietary demands of the office going population , working class millennials and sturdy teenagers subway is the brand which caters to all the these needs of these consumers making it the most healthiest and quickest option when it’s comes to have a wholesome bite for lunch on a busy day, that is everyday

Increased demand for food delivery: The increased demand for food delivery from apps like ZOMATO and swiggy which now have an option for healthy eating, subway goes on top of the list getting more take out demands than the outlet based

Benefit of customisation: Unlike any other fast food joint like Burger King, McDonald etc subway offers a wide range of variety to customise the sandwiches, wraps, salads as they like on both app based and outlet based spaces thereby giving freedom to the customers in terms of the taste and benefits they like to seek

What are the requirements and qualifications for setting up a subway franchise

Requirements

Area requirements: minimum area requirement of

• 170 sq ft for food court franchise
• 350 sq ft for non-food court

Skill requirements: Minimum skill requirements of Passing the skill test consisting of math and English based knowledge , scheduled and made mandatory by subway for all of its franchise owners

Required Financial, educational and entrepreneurial background

Manpower requirement: minimum manpower of 8 employees is required

Qualification

Qualification in terms of the following documents:

• Standard franchise agreement
• Lease/rental agreement
• GST registration
• PAN/Aadhar card details

Investment required to run a subway franchise

The initial investment of running a subway franchise comes to

Content Amount
1. Initial investment ₹ 25 lakhs – ₹ 30 lakhs
2. Franchise fee ₹ 4.5 lakhs and 2.5 lakhs for the next
3. Advertising and loyalty fee 3.5% – 8%

Profits made form running a subway franchise

The anticipated profit and return on investment is not less than 40% – 50% annually.

However the breakup of the capital requirements of a subway franchise on a wide basis goes as follows

How to apply for a subway franchise

The ways in which one can apply for a subway franchise are

• Either you can visit the official website of subway and fill up the details as required by the subway franchise application form and wait for a follow up
• Or you can contact subway through it’s official contact number and email address, draft your query regarding the franchise application and go with the procedure

Suggestions

Have you locked up on your favourite sauces and desired veggies for your ideal sub yet?

well, while you do that we’ll give you reasons as to why you should take up this franchise opportunity

• Firstly, owning a subway franchise would mean being a part of the largest retail franchise restaurants of the world. The brand reputation and image your are likely to earn is immeasurable
• Secondly, the return on investment and profit margin on a subway franchise is higher than it is for any other fast food franchise
• Lastly, the operation involved in managing this franchise is as minimal as making a sub and a salad, operating an oven and adding sauces and veggies.