Mr Sub Established in 1990 by Jack Levinson and Earl Linzon. It was first opened in Toronto and has now developed into a chain of 335 submarine sandwich shops in Canada. Mr. Sub’s menu includes a wide choice of subs such as the Panini grilles subs, wraps, salads and soups. They also offer catering services for school and office parties along with delivery and take-out options. The key reasons for Mr. Sub’s success are as follows:Strong administration ties generated through original owners/ directorsGreat business experience, established since 1968Promotional packages that aimed at targeting varied demographicsAnd widely diversified Menu options
With 36.7% in agriculture 28.7% in industry, 34.6% in services.China spends about 40-50 % of its GDP on infrastructure.China has the second longest expressway network in the world and World's second largest rail network.
; due to less number of outletsSeen as local company
Mr Sub will continue to use the franchising mode as it has done in the past within Canada, and does not wish to indulge in exporting its product. In China, franchising has become a popular method of investment as less capital is required on the side of the franchisor and there are easier government regulations for establishing one’s own entities all over the country. As urban and rural disposable income rises, market potential also continues to rise rapidly. The new regulations do not impose any further requirements for Foreign Invested Enterprises (FIEs), implying that FIEs are subject to the same franchising rules as Chinese franchisors. In the 2004 Measures, one of the pre-requisites was that before engaging in franchising in China, franchisors had to operate a minimum of two "directly-owned" stores for at least one year in China ("the 2-stores-1-year rule"). (China’s New Franchising Regulations, 2007)The new regulations indicate that cross-border franchise operations are possible, meaning that the two directly operated stores no longer need to be located in China. This may imply that foreign franchisors who meet those requirements but have no operations in China (i.e. have two qualified locations abroad) can also apply. (Michael & Erik, 2013) The new regulations do not specify any other information concerning cross border franchising. Although the new regulation cancels previous additional filing requirements and does not require the franchisor to be incorporated in China.
Mr. Subs' expansion to China
Geeta Sakhuja, Moon Guo, Maninder Mangat and Zaman Ahmed
• Established in 1990 by Jack Levinson and Earl Linzon.
• First opened in Toronto and has now developed into a chain of
335 submarine sandwich shops in Canada.
• Mr. Sub’s menu includes a wide choice of subs such as the
Panini grilles subs, wraps, salads and soups.
• They also offer catering services for school and office parties
along with delivery and take-out options.
About Mr. Sub
• The official language is Mandarin.
• 45% of Chinese report the ability to speak English.
• In 2012, Unemployment Rate averaged 4.15 %
• China is an export oriented market economy.
• China's gross domestic product growth increased in the past 10 years
• China’s labor force in 2012 was 795.5 million
Target Country Assessment
• Well diversified menu list
• Strong administration ties
• Potential to grow among the
competition in the new market
• Great business experience
• Placing products in grocery stores
• Mr. Sub can gain more consumers using
the adaptation approach
• Positive feedback from Chinese
consumers for fast food
• Faces tough competition from global
competitors such as:
• Burger King, Subway and McDonald’s
• Competition in Chinese market:
• Yonghe King and Sun Ya Da Bao
Not widely known
Only Canada wide recognition
Not enough marketing promotion
No visible CSR practices
• Mr. Sub should gain 10% of market share by the end of first
• Enter the market with competitive pricing
• Opening outlets in most populated provinces.
• Target 72.1% population of male and female of age group 14-40.
• Existing Franchising model
• Franchising has become a popular method of investment in China
• As urban and rural disposable income rises, market potential also
continues to rise rapidly.
• The new regulations indicate that cross-border franchise
operations are possible.
• The new regulation also cancels previous additional filing
• Does not require the franchisor to be located in China.
Market Entry Strategy
• Location: Urban area
• Ages: 14~40.
• Educated, professional, middle class & high disposable
• Lifestyle: Active, Environmentally aware and have high
level of health concern.
Product line offering:
• Localize and diversify its menu to better fit the Chinese
• Mr. Sub’s original red packaging theme
• Comparatively smaller package sizes
• Recyclable and environment friendly
• Healthy eating and balanced lifestyle
• Shopping Bags and some products;
• Fresh and healthy
• Tasty good.
Marketing Mix - PRODUCT
• Outstanding customer service
• Knowledgeable employees
• Mr. Sub will also cater school programs and parties
• Consistent with the layout that is displayed in
MARKETING MIX - PRODUCT
• Competitive Pricing:
• High food quality standard
• Set the price a bit lower.
• Wholesale Pricing Program
• Focuses on partnering with gyms, schools and companies that offer
healthy food choice.
• Factors/Impacts on Pricing Strategy:
• Mr. Sub would set up franchises at some of the busiest and crowded
areas of China where people are always on the go.
• There are three location strategies an international restaurant
franchisor can adopt when entering the Shanghai market:
• (1) Locating in the Downtown Area
• (2) Locating in the Special Economic Zones, and
• (3) Locating near an upscale residential area.
Some of the advertising methods we wish to follow for Mr. Sub
would include the following:
1. Creating a new video advertisement to be published in China
• Theme: “SUMMER SUB”
• Media used: Commercial published on the local TV channels,
radio stations and on YouTube
• Frequency: Advertise twice every week and keep customers
regularly updated with Facebook updates, and tweets.
• Timing: Mid-July to August end.
2. Discount Special – MR. SUB sandwich with 2 cokes at
• Theme: “MR. SUB FALL SPECIAL – 10% OFF”
• Media used: For discount promotions publish flyers in
frequently read newspapers and magazines.
• Frequency: Advertise for every weekend until the winter
• Timing: Mid-September to December end.
Mr Sub. Profit & Loss Statement.
Cost of Goods sold
Net Income Before Depreciation
Net Income Before Taxes
Based on our intensive research
we believe that Mr. Sub should
move further with its expansion to