Subway franchise question and answer
Despite some of the recent economic challenges in retail, comparatively the Subway chain's major points of difference over other QSRs is that customers are able to tailor make sub sandwiches exactly the way they want it. Given this variety, (you can make around 2 million different types of sub sandwiches), you can start to appreciate why Subway restaurants have such a broad appeal and consumer base - young and old, male and female, meatlover and vegetarian.
The Subway chain is really not too different to other QSRs in marketing execution. Funds are invested in both top line marketing efforts and in local store marketing. Regular research initiatives provide the system with feedback on our marketing efforts and help drive the marketing strategy.
Basics about your system?
"Pete's Submarines" was the first Subway restaurant opened in 1965 in Bridgeport, Connecticut by co-founder and president Fred DeLuca. Fred borrowed $1,000 from family friend, co-founder Dr. Peter Buck. Today there are currently over 24,000 Subway restaurants worldwide in 82 countries.
The first Australian location opened in Perth in 1988. Australia is the Subway franchise's largest market outside North America and the Subway franchise has more Australian locations than any other QSR chain (850). Interestingly we are also 100% franchised and have no company owned locations. So every Subway restaurant in this region is wholly owned by a member of the Australian community. There are still many development opportunities out there for continued expansion and 2006 could see us reach 1,000 stores in Australia alone.
Besides our products, some of the other aspects that set the Subway system aside from other QSRs stem from the foundational, healthful aspects of the Subway concept and our service/product proposition. The Subway system was founded on the provision of a healthful product made quickly. Even though we didn't create the submarine sandwich, we certainly helped put them on the map. We believe we have also played a large role in changing the way consumers think about fast food. Our brand has been a QSR benchmark for more healthful options for some time and it is only natural for competitors to follow our lead. Being 'healthful' is certainly a point of pride for both Subway owners and corporate staff alike. The Subway service proposition is a key strength with mass appeal. That is customers can customise their sandwich any way they like to suit their taste.
Another aspect that sets the brand aside from other QSRs is that Subway franchisees themselves play a large role in the development of the brand. There are 5 seats upon the regional advisory board and franchisee owned bodies hold 3 of these seats.
Who you see as your key competitors?
Our competitive environment has expanded over the past couple of years. We keep an eye on our direct sandwich competitors. The challenge with monitoring these direct competitors is that many are in their early stages of their development and their impact is largely localised (vs national). We also review most major fast food franchises with a focus on those that imitate our products or service.
As previously stated, we still see much potential in the market for continued growth of the Subway brand. It is the smaller, developing brands that face the toughest test.
The future?
In this region the Subway brand is very well recognized and very well accepted. This is the result of many years of hard work, persistence and the possession of a quality product and unique service proposition. I guess the point to be made is that after 17 years in this region, with the many achievements we have made to date, we still see that there is huge potential for us. We are continually researching the market and we are always looking for ways to improve what we already have. The future is still very exciting for us.
Naturally, each new franchised player in the market is looking for its own 'ground' – its point of difference. All offer convenience – many sit in the same food courts. Subway has its strong brand and combinations. Trios has its 'La Vida Laffe' – the laffe being a new kind of product, Quiznos toasts, and Healthy Habits has gourmet nutrition.
Of particular note is the nutrition angle – no one is ignoring it. Subway's big rise owes much to the perception of it being a healthier alternative to other fast offerings. But how healthy is 'healthy'? Determined to secure the highest of the high ground, Healthy Habits commissioned an independent comparative survey – the first shot in what might prove to become an interesting battle. We're carrying this response pretty much verbatim as the tone is interesting. 24.07.2007
FCA Member
Contact Subway Systems Australia P/L
Tel: 1800 630 355
Fax: 07 3852 4081
