One major franchise that requires a small investment and gives 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 bread has greater 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 telephone numbers of active franchise holders, listed by state. Subway encourages the potential franchise buyer to see and see the restaurant where they may be 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 from the franchisee ranges from $94,300 to $222,800, based on location and equipment needs. Nontraditional locations may require considerably less capital.
Subway units are situated in a wide range of sites including schools, colleges, offices, hospitals, airports, military bases, food markets, and truck stops-even casin.os. Most remarkable will be the company’s statement that under 1 percent of the units fail, which can be partly accounted for by franchise holders’ options to sell their unit or resell it to the company. According to company approval, the area, hours of operation, and further food items offered are flexible. The conventional subway menu, however, cannot be omitted.
No one should buy a Subway franchise-or any other restaurant-without backup learning and experience. Subway franchise buyers attend the Franchise Training Program at headquarters at their very own expense. Some 2,000 franchisees annually attend the 2-week course covering management, accounting and bookkeeping, personnel management, and marketing. On-the-job training in nearby Subway restaurants is scheduled as well, totaling 34 in-store hours.
Three or four trainees are assigned to a training restaurant. The purchaser pays a weekly franchise fee of 8 percent and a 3.5 percent advertising fee based upon sales. The buyer has the choice of life insurance; health insurance is yet another purchase option. Each franchise buyer gets a copy of a confidential operations manual containing about 580 pages. Menu Selection Subway’s flexibility in offering service in various types of locations can also be noticed in the kinds of food offered: submarine sandwiches, salads, cookies, a small-fat menu featuring sandwiches with lower than 6 grams of fat, and a low-carb option featuring wraps.
Subway features bread items which are prepared from frozen dough and served fresh through 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, wherein 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 including apple pie.
Subway History The Subway story began when Fred DeLuca, its cofounder, was 17 years of age. He and a family friend, Dr. Peter Buck, worked together on your own business plan to get a submarine sandwich shop. It took them four hours to produce and was implemented having a loan of $1,000 from Dr. Buck. The initial restaurant was opened in Bridgeport, Connecticut, in 1965.
It did well in their first summer through the help of advertising slogans like ”Put a foot inside your mouth,” emphasizing the foot-long sandwich, and ”When you’re hungry,make tracks for subway christmas hours.” When summer ended, so did the majority of its sales. Dr. Buck suggested tjyxda a second restaurant. ”That way people will see us expanding and feel that we’re successful.” It absolutely was not until they had five stores and better locations that this stores began earning money. DeLuca has evolved the company’s system of franchise development several times through the years and contains kept the reasoning easy and comparatively cheap for franchise buyers.