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Subway Franchise

In: Business and Management

Submitted By katie2526
Words 828
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Subway’s mission is: “Delight every customer so they want to tell their friends – with great value through fresh, delicious, made-to-order sandwiches, and an exceptional experience.” Subway’s franchise vision is to be the number one Quick Service Restaurant (QSR) franchise in the world, while delivering fresh, delicious sandwiches and an exceptional experience. Subway has three core values: family, teamwork, and opportunity. Family is important to the Subway community. “We build our business relationships by serving each other, our customers and our communities, much as we do within our own families.” The next core value Subway holds near and dear is teamwork. “We challenge ourselves and each other to succeed through teamwork, against shared goals and to be accountable for our responsibilities.” The last core value is important for the franchisor and well as the franchisee, opportunity. “We create and entrepreneurial, ever-growing Subway community, increasing the opportunity for everyone.”
Subway, originally Pete’s Super Submarines, was founded in Bridgeport, Connecticut in 1965. A high school graduate named Fred DeLuca, just 17 years old, wanted to achieve a higher education. No matter how hard Fred worked, he only received $1.25 per hour, minimum wage at the time. Fred started to think he would not earn the money to be able to pay for his college tuition. Fred asked a longtime family friend Dr. Pete Buck, also a nuclear physicist, for financial advice. Instead of giving Fred the money to pay for his tuition, Dr. Buck suggested Fred open a submarine sandwich shop. Fred was shocked, but he wanted to know how it would work. Dr. Buck told Fred that customers would come in, give him money in exchange for submarine sandwiches, and then Fred would have enough money for his tuition. If Fred was willing to put in the work, Dr. Buck would be his partner. So they became partners; Dr. Buck wrote a $1,000 check to Fred and Pete’s Super Submarines opened. In 1968, the name changed to Subway. Fred DeLuca, 63 years old (46 years later), is still the president of Subway. The headquarters is in Milford, Connecticut. Subway is known for its fresh, customizable sub sandwiches. They also offer wraps, salads, and cookies. The five most popular Subway sandwiches are: Italian B.M.T., Tuna, Subway Club, Meatball Marinara, and the Chicken & Bacon Ranch. With so many options of breads, meats, cheeses, and veggies there are over two million sandwich varieties available. Subway conducted a study and found that almost 2,800 Subway sandwiches and salads are sold every minute. The target market for Subway is adults between the ages of 18 and 49 who are working and/or studying. They define this target market as, “Demanding Young People Who Know Their Own Minds.” There are currently 40,320 Subway Restaurants in 103 countries around the world. There are always new franchises in the works for Subway. With a failure rate of only 7%, it is almost a fool proof system. The initial franchise fee is $15,000. However, the total investment can range from $116,200 to $262,850 (franchise fee included), depending upon the type of building, size of the building, and location of the property. However, as with all franchises there are fees to be paid from the franchisee to the franchisor. Each week, 12.5% of gross sales (minus sales tax) is paid to the franchisor. There are two groups this 12.5% is formed from. Royalty fees are 8% of gross sales (minus sales tax) per week. Advertising fees are 4.5% of gross sales (minus sales tax) per week. In order to show the Ben Franklin +/- of opportunity all at once for the Subway franchise I moved it to the next page.

ELEMENT | IMPOR. FACTOR | PRO of SUBWAY | CON of SUBWAY | Brand Recognizance | 9 | 9 81 | | Franchisee Support | 7 | 9 63 | | Affordability | 9 | | 8 72 | Royalty Fees | 6 | | 7 42 | Growth | 5 | | 7 35 | Competition | 8 | 6 48 | | Healthy & Fresh | 9 | 9 81 | | TOTALS | | 273 | 149 | I chose Subway as my franchise opportunity because they are one of my favorite restaurants. Their $5 footlongs are economically possible for me, plus they are delicious and healthy. There are two Subway franchises in McAlester, where I live. They are both always busy, and I wonder why they do not expand. However, they have to receive permission from the franchisor in order to expand. During studying Subway, it peaked my interest even greater to open a Subway franchise. Although I am a broke college student at the moment, someday I want to open my very own Subway franchise.

WORKS CITED
"Customer Service FAQs." Customer Service FAQs. N.p., n.d. Web. 23 Sept. 2013.
<http://www.subway.com/ContactUs/CustServFAQs.aspx>.
"Franchise FAQs." Franchise FAQs. N.p., n.d. Web. 23 Sept. 2013.
<http://www.subway.com/subwayroot/development/FranchiseFAQs.aspx>.
Welcome To The Student And Educator Resource Guide. N.p.: Subway, 2009. PDF.

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