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The Franchise Business Opportunity: Subway Restaurants Research Paper


Subway is the American popular restaurant franchise which specializes in selling such fast food as submarine sandwiches. The franchise develops actively, and today, Subway restaurants are opened in more than 100 countries all over the world (“Subway”). To discuss the particular features and advantages of using the Subway franchise opportunity, it is necessary to focus on the perspective of opening one more Subway restaurant in Griswold, Connecticut.

Description of the Franchise

The first Subway shop and restaurant were opened in Connecticut in 1965, and Subway became the franchise in ten years, contributing to the brand’s development and recognition. Today, the Subway franchise is owned by the Doctor’s Associates Inc. (DAI), and it sells different types of submarine sandwiches, salads, and baked goods in the United States, and the menu is different with references to the restaurants’ locations globally (“Subway”).

Mission and Philosophy Statement

The franchise’s mission is to “delight every customer, so they want to tell their friends – with great value through fresh, delicious, made-to-order sandwiches, and exceptional experience” (“Subway Guide” 2). Subway focuses on proposing only fresh products, and the franchise’s philosophy is reflected in the advertising slogan “Eat Fresh” (“Subway”). The philosophy supports such values as family, teamwork, and opportunity, and it can be formulated the following way: “We build our business relationships by serving each other, our customers and our communities, much as we do within our own families” (“Subway Guide” 2).

Management Plan

Subway develops an effective international management strategy to regulate the operations of many restaurants around the globe. The focus is made on the strict corporate culture and emphasis on values and high-quality. The basic management plan responds to the issues of effective planning, organizing, controlling, and leading, which are associated with the development of the franchise globally (“Subway”).

Business Costs

Subway’s competitive advantage depends on proposing adequate costs of opening and operating the business. Thus, the franchise fees associated with the startup are fixed, and today, they are $15,000 (“Subway”). This fact explains the popularity of the franchise among entrepreneurs all over the world. The other fees associated with the other essentials, real estate, equipment, and insurance are influenced by the new restaurant’s size, location, and build-out costs which are set by the franchisee. However, the total investment can range “from $114,800 to $258,300 for traditional locations and $84,300 to $200,100 for non-traditional locations”, and these numbers include the franchise fee, construction costs, equipment costs, and the operating capital (“Subway”; “Subway Development”). Moreover, franchisees are expected to pay 12.5% every week to the franchisor to cover the franchise royalties and advertising fees. The net worth is expected to be $80,000 (“Subway”).

Funding Acquisition

If the franchisee has no necessary costs, it is possible to use the assistance of reputable lenders working with Subway. The franchisor provides all the necessary information on the lender requirements and particular features of the agreement to choose the appropriate lender among such companies as Ascentium Capital, LLC, JenCas Financial, Inc., and IPC Financial Solutions (“Subway Approved Lenders Comparison Chart for US and Canada” 1).

Franchisor Assistance

To help the franchisee start the business, the franchisor provides such services and assistance as the equipment leasing program; training; and local marketing assistance. To guarantee that the franchisee can succeed after opening a new restaurant, the franchisor focuses on proposing the advantageous equipment leasing program. The next step is the two-week training course, which provides the classroom training and outlet training to make the franchisee to practice all the skills and knowledge. The next stage is the work with the Development Agent to work out the effective marketing plan and strategy. Subway also proposes the necessary marketing assistance to design the restaurant and to compete within the industry effectively (“Subway”; “Subway Development”).

Franchisee Requirements

To open the Subway restaurant, the franchisee should complete the final examination after the two-week training courses and provide the approximate marketing plan to respond to the brand’s image and corporate principles. The Subway restaurants should propose the set menus with the local variations which do not exceed six items. The franchisee is also expected to complete the Basic Skills Test as part of the training program. The franchisor has the limited control over the business, and this approach provides many opportunities for the franchisees’ development because the main requirement is to follow the Subway’s high-quality standards and to support the brand image (“Subway”; “Subway Development”). The control of the franchisor is associated with approving the suppliers, distributors, strategies, and general approaches influential for the brand image.

Opportunity Attractiveness

The discussed opportunity can be considered as attractive for the franchisee because the Subway restaurants are expected to respond to the community’s needs. The community in Griswold, Connecticut, is not familiar with the Subway restaurants, and it is reasonable to focus on the effective location and marketing strategy while opening a new restaurant. The target market can be discussed as good because the local community is interested in Subway restaurants as one of the largest fast-food restaurant chains because there are no representatives of the industry in the city. The young population seeking for the opportunity to visit the fast-food restaurant comes to the nearest cities, and it is possible to attract the young male and female population while focusing on the development of the Subway restaurant according to the pattern of the small family restaurant, but with the focus on the high quality of the sold services and products (“Subway”; “Subway Development”).

The Location of Business

265 Slater Ave, Griswold, CT 06351, United States

The Marketing Plan

To market the fresh products under the Subway brand, it is necessary to focus on such elements of the marketing plan as the (1) definition of the business mission, (2) the focus on the target market, (3) the analysis of the competitive environment, (4) the market positioning with references to the franchisor’s principles, (5) the development of the market model, and (6) the focus on the key success and risk factors (Nickels, McHugh, and McHugh 12-29). The franchisee demonstrates independence while developing the strategies for the second, third, and sixth points. The realization of the first, fourth, and fifth steps depends on the principles and norms stated by the franchisor (“Subway”). Thus, the choice of the strategies and models to follow can be discussed as rather limited.

Conclusion

Today, Subway restaurants are located in many countries globally, and this fact is associated with the idea that Subway proposes rather advantageous conditions and terms for entrepreneurs to become the franchisees. As a result, each year, new restaurants are opened in different countries, and the franchising principles are regularly revised to respond to the modern trends within the industry.

Works Cited

Nickels, William, James McHugh, and Susan McHugh. Understanding Business. USA: McGraw-Hill/Irwin, 2012. Print.

. 2014. Web.

Subway Approved Lenders Comparison Chart for US and Canada. 2013. Web.

Subway Development. 2013. Web.

Subway Guide. 2010. Web.

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IvyPanda. (2020, May 13). The Franchise Business Opportunity: Subway Restaurants. Retrieved from https://ivypanda.com/essays/the-franchise-business-opportunity-subway-restaurants/

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"The Franchise Business Opportunity: Subway Restaurants." IvyPanda, 13 May 2020, ivypanda.com/essays/the-franchise-business-opportunity-subway-restaurants/.

1. IvyPanda. "The Franchise Business Opportunity: Subway Restaurants." May 13, 2020. https://ivypanda.com/essays/the-franchise-business-opportunity-subway-restaurants/.


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IvyPanda. "The Franchise Business Opportunity: Subway Restaurants." May 13, 2020. https://ivypanda.com/essays/the-franchise-business-opportunity-subway-restaurants/.

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IvyPanda. 2020. "The Franchise Business Opportunity: Subway Restaurants." May 13, 2020. https://ivypanda.com/essays/the-franchise-business-opportunity-subway-restaurants/.

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IvyPanda. (2020) 'The Franchise Business Opportunity: Subway Restaurants'. 13 May.

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