- Fred Deluca opened the first Subway sandwich shop in 1965 with a goal of opening 32 stores in 10 years but only opened 16 stores by 1974, prompting a change in strategy. - The Subway brand was launched in 1974 focusing on serving high quality and healthy products, providing excellent customer service, and keeping costs low through good locations and recruiting franchisees. - Subway's core mission is to serve its franchisees worldwide by offering support systems through products, tools and knowledge that continually change due to cultural norms and customer expectations. - As of 2010, Subway had 33,611 franchise restaurants in 92 countries, having been voted the top franchise opportunity by Entrepreneur magazine 17 times in 21 years

1. |

2. ]
M 1965 - Fred Deluca opened submarine sandwich shop
Goal to open 32 stores in 10 years
M 1974 - With only 16 stores opened he changed the strategy
Business Expansion
M 1974 - The Subway brand was launched
Overview

3. ½ Serving a high quality healthy products
½ Providing excellent customer service
½ Keeping investment operating costs low
½ Finding good store locations
½ Continuously recruiting new franchisees
Overview

4. ^a
The Mission

5. ^
½To serve their ¶Franchisees· worldwide
½To offer their Franchisers ´support systemsµ
(The tools, products and knowledge)
^
a !#
The Business

6. ]
Subway·s core
mission ´to serve
the franchiserµ
Continuous Change
The tools, products and
knowledge provided by
Subway continually
change due the cultural
norms, customer
expectations of the
territory.
** Product Development**
^ 0
$ %
a |
The Business

7. 3
· Specifying Investment capital minimums
· Specifying City populations Income
Per capita minimums
´ ,this
definition will effect everything,the choice of our distribution
outlet, crafting of our messages, choice of the media and the
setting of pricesµ 5 Most Important Questions ²Drucker)
Who is your customer?

8. ]
Who is the Customer
Subway has chosen the Franchisee
(investor) to be their ]

9. ]
A Subway support customers through providing
the a which in
turn allows them to offer their consumers
(secondary customers) the consistent standard
and value for money
What does the customer value?

10. ]
a !
CustomersValue
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· a
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·D
·D

11. ]
A Subway offers Cultural variety to the menu:
A Subway allows for religious and cultural differences to the
standard menus Hallal (Hindu and Muslim communities )
A Trinidad ² Shaddow benny and Tamarind sauce
A India ² Curry sandwich options
A Scotland - deep fried fish with vinegar
^]
^ * +
$!,
What does the customer value?

12. ^ # $
$ %%'' ()
**+$ ,+*
´To satisfy the customer is the mission and purpose of the business,and can
therefore be answered only by looking at the business from the outside, from the
m µ (pg 24,The Essential Drucker)
What are the results ?

13. A Subway is a private Company no financial data available
A We therefore reviewed Subway Corporation·s overall
performance results by looking at five main areas
What are our results?
^
$!,- +
(

14. $ -
A Subway corporation·s growth and awards
A Subway community service social projects
A Performance of the franchisees themselves
A Performance of Subway compared to other
comparatively priced QSR·s *
A Negative feedback
What are our results?
^
$!,- +
(
** QSR ²Quick Service Restaurant

15. -
A 33,611 franchise restaurants located in 92 Countries
( in 36 years - aprox.77 stores per month)
A Voted ´{ ¬ !.µ by Entrepreneur
magazine, the 17th time this has been awarded to Subway in 21
years
A Selected as ´ µ by consumers on ´Most Popular,µ
´Top Serviceµ and ´Healthy Optionsµ Zagat Survey 2010
What are our results?

16. -
] .
A ^ utilizing natural and recyclable products in their restaurants,
(the 1st Eco-Store opened 2007 in Florida)
A Sponsors the   program, engages
students in physical activity while raising funds for cause
A In Grenada Subway sponsors local Charities and schools and makes
contributions to individuals for medical assistance.
What are our results?
´
/ +
-$
^a a 0
µ Max DePree
Qualitative results

17. -
$ $
A Confidence in the brand 70% of franchisees are multiple store owners.
A Store profits range from 16% - 20% of gross sales, investor
A High percentage of repeat customers to stores(secondary customers)
What are our results?

18. - $
$ $
What are our results?
! #$% m 
Royalty and food 40% ($146,000)
Rent 13.2% ($48,000)
Power and Insurance 4.6% ($16,800)
Garbage,tel, office expenses 1.6% ($6,000)
Salaries 16.4% ($60,000)
Sales tax 8 % ($29,200)
Net profit (before tax) 16.2% ($59,000)

19. -
$ /
A
What are our results?
Quantitative Results
US Fast Food Franchise Industry Report - Comparison of investments
2010
Name of franchise Initial franchise fee
Royalty on Gross
sales
Total Initial
Investment
Minimum

!#! $ %
$%
%
'
()*#
+* ##
,-
http://www.franchisedirect.com/foodfranchises/fastfoodfranchiseindustrystudy/14/262

20. -
$ /
A QSR industry dominates the ¶Top 5 Global Franchises·,and Subway
Franchise is number two overall.
What are our results?
+*.'/ 0#*#' *1 **
Franchise Name Business Description
Country of
Origin
()*# 2,34 (# 5,
,- 2,3,4 - 5,
677 2,3 677 . - 5,
' 2,3 5,
2,3 ' ** 4 5,
http://www.franchisedirect.com/top100globalfranchises/the2009report/158/767/
Quantitative Results

21. - $
0 $
A UDevelopment sales agentsU coerce franchisees to open additional stores,
A No exclusivity on territories, new stores open close by.
A Brand recently criticized for, undermining its ´eat healthy taglineµ
A management systems are costly to franchisees.
A Subway stipulates that the Franchisers purchase all supplies and food
products from Subway Corp.
A Possibility that Subway overinflates the potential profits to new investors
What are our results?

22. A Subway Corporation·s overall goal is to continue expansion globally
A (a) To be the number one franchiser of the world (qty and value)
A (b) To develop their ´go greenµ environmental principles globally.
A (c) Creating a micro-lending movement issueing small loans to
disadvantaged people
A
What is the Plan?

23. |. 12
A
^$ 1
22
A 1
A $ 3
¬ ( )
{ 4

24. 3
½ For Investors having limited capital ($90 -$100,000 of less) However, they
must be aware that because the profits are between 16 ² 20% and they
will eventually need to open additional stores if they want to increase
profits
½ For locations in larger territories and economies since they have the ability
to expand and open additional stores.
Recommendation

25. V
3
½ For investors in smaller economies (populations of 100,000 or
less), as it would be difficult to maximize profits by continual
expansion due to the limitation of smaller populations.
½ For investors investing in their initial store who are not willing
to work in the store themselves as hiring a manager will
decrease your profits by 4% - 5% average.
½ For investors with more than $200,000 capital to invest, they
may be better off investing in another franchise where the
Royalties fees are less and profits more, (rather than opening
two Subway stores)
Recommendation

26. $
^x V
A Despite the absence of financial information from this privately
held company we have analysed their overall performance
based on statistics, business reviews and customers comments.
A We are of the opinion that their strategy has paid off and will
continue to do so in the future
A We recommend ¶Subway Corporation· for investment
Recommendation

27. |
Dawn Williams
Jeffrey Bonaparte
Henson Gittens
Brigitte Assing
Presented by:

28. 3
Recommendation

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Recommendation

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Recommendation

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Recommendation