One major franchise that requires a low investment and offers a range of possible locations to franchisees is Subway, owned by Doctor’s Associates, a Florida corporation with headquarters in Milford, Connecticut. Began in 1965, subway has more than 25,278 units in 83 countries and annual sales exceeding $3.9 billion.
Subway publishes a franchise-offering circular for prospective franchisers that also includes the names, addresses, and cell phone numbers of active franchise holders, listed by state. Subway encourages the prospective franchise buyer to see and see the restaurant where 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 through the franchisee ranges from $94,300 to $222,800, according to location and equipment needs. Nontraditional locations may require considerably less capital.
Subway units can be found in a wide range of sites including schools, colleges, offices, hospitals, airports, military bases, supermarkets, and truck stops-even casin.os. Most remarkable will be the company’s statement that less than 1 percent from the units fail, which can be partly accounted for by franchise holders’ choices to sell their unit or resell it to the company. Based on company approval, the area, hours of operation, and extra food items offered are flexible. The standard subway menu with price, however, can not be omitted.
No person should buy a Subway franchise-or any 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 annually attend the 2-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 assigned to a training restaurant. The customer pays a weekly franchise fee of 8 percent along with a 3.5 percent advertising fee according to sales. The buyer has a choice of insurance coverage; medical health insurance is another purchase option. Each franchise buyer receives a copy of the confidential operations manual containing about 580 pages. Menu Selection Subway’s flexibility in offering service in various locations is additionally observed in the types of food offered: submarine sandwiches, salads, cookies, a small-fat menu featuring sandwiches with lower than 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 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 yrs old. He and a family friend, Dr. Peter Buck, worked together on your own business plan for any submarine sandwich shop. It took them four hours to produce and was implemented with a loan of $1,000 from Dr. Buck. The first restaurant was opened in Bridgeport, Connecticut, in 1965.
It did well in the first summer through the help of advertising slogans like ”Put a foot within your mouth,” emphasizing the foot-long sandwich, and ”When you’re hungry,make tracks for subway christmas hours.” When summer ended, so did almost all of its sales. Dr. Buck suggested tjyxda a second restaurant. ”That way people will see us expanding and think that we’re successful.” It absolutely was not until they had five stores and much better locations that the stores began making profits. DeLuca is different the company’s system of franchise development several times over the years and it has kept the reasoning simple and comparatively cheap for franchise buyers.