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Company history

n 1965, Fred Deluca had just graduated from high school in Bridgeport, Connecticut,
USA. Like many young adults his age, he had dreams of attending college. Although he
was a hard-working, competent and dependable young man, the $1.25-per-hour he
earned working at the local hardware store wouldn't be enough to finance his education.
Discouraged, Fred decided to ask Dr. Peter Buck, an old family friend, for some advice.
The two had known each other for years and Fred half expected Dr. Buck to loan him
the money for college after telling him of his plans to study to become a medical doctor.
nstead, Dr. Buck gave Fred an idea that would change his life and the lives of people
around the world.
" think you should open a submarine sandwich shop," said Dr. Buck.
At first Fred was skeptical, but after Dr. Buck explained how the sandwich shop could
finance Fred's future education, he was on board. That night, Fred and Dr. Buck formed
a partnership that would lead to the first SUBWAY restaurant.
By lunchtime on the first day Fred and Pete's submarine shop was open, customers
were pouring in. From that day on the company continued to grow. Fred and Pete had a
goal of opening 32 submarine sandwich shops within 10 years. By 1974, eight years
after they opened their first sandwich shop, Fred and Pete owned and operated sixteen
shops throughout the state of Connecticut, only halfway to their goal.
As Fred and Pete looked to grow the business, talk turned to franchising, an idea they
had previously dismissed as something only for "the big guys. Determined to succeed,
Fred and Pete decided franchising was the key to achieving their goal. So Fred met with
his friend Brian Dixon and made him an offer he couldn't refuse. He offered Brian a loan
to buy one of their restaurants, but to sweeten the deal, Fred told Brian that if he didn't
like the business, he could return it and owe nothing.
Brian is known as the very first SUBWAY franchisee setting the new standard for the
SUBWAY business model. This enabled Pete and Fred to not only reach their goal, but
surpass it. Today, entering their 46th year of operation, SUBWAY restaurants is the
world's largest submarine sandwich chain operates more units in the US, Canada and
Australia than McDonald's does. Countless awards and accolades have been bestowed
upon Fred DeLuca and the SUBWAY chain - the SUBWAY name and its products have
even appeared in numerous television and motion picture productions. The
SUBWAY franchise has come a long way from the modest sandwich shop in Bridgeport,
CT.

arketing strategy
Lately, have noticed a big jump in Subway's brand awareness and
marketing. wanted to point out a few things they are doing to hit one out
of the park. When you are selling a consumer a product, there are some
traits Subway is hitting more than most in a very tactful way.
Eat Fresh
Subway's slogan is perfect. How much more simple could they make
their slogan to imply so much? Does any other national food chain come
close to competing? You can see your food being made with tons of
leafy greens piled high right before your eyes.
08843 simple, powerful, implicate message
FootIong
A Subway franchise owner by the name of Frankel started something
huge. He was looking for a way to increase slumping weekend sales at
his restaurant, and that triggered the idea of selling Footlong subs for
just .
"There are only a few times when a chain has been able to scramble up
the whole industry, and this is one of them, says Jeffrey T. Davis, the
president of restaurant consultancy Sandelman & Associates. "t's huge.
Just take a look at what the competition has done since the
FootIong introduction. n fact, the biIIion in sales generated
nationwide by the $5 footlong alone placed it among the top 10 fast-food
brands in the U.S. for the year ending in August, according to NPD
Group.
08843 pricing and branding rolled into one
$ame but different
One of the biggest reasons personally love going to Subway is for the
food and how it is the same sandwich yet it is just a little bit different
every time. can order the same Roasted Chicken Breast sandwich from
5 different Subway Restaurants and they will be just a little bit different
each time. Not to mention a few extra or fewer veggies or sauces adds
an element of satisfaction you are looking for at that moment. Having the
ability to add or take away as you see fit is a nice and welcomed change
from the other fast food joints.
08843 meeting people's immediate needs
Carved out niche
The health industry is a multi-billion dollar annual business. Subway has
carved out their niche in the fast food industry in a healthy way. They
have become the default for a healthy and fast meal, two huge points.
Biggest Loser By sponsoring a run-a-way success tv show focused
on raising awareness of obesity and healthy living, Subway has
cemented themselves in the health niche and is expanding quickly.
arketing/Advertising Eat Fresh and Fast but not Fast Food. These
mantras are simple yet imply so much.
Don't forget Jared Subway placed a lot of faith in their spokesperson
Jared. magine if Jared packed on the pounds again or died of a heart
attack. Ouch. A very big and bold move that sets themselves apart from
so many of their competitors.
Picking a fight
Subway uses its own products against the competition in their quest to
elevate themselves. Subway says look at how bad McDonald's or Burger
King is for you and look how great our food is for you. The names,
products and health information of different brands are listed right on
Subway's packaging and marketing material.
AII food, aII hours
Most fast food restaurants have to switch systems over in order to make
breakfast items vs regular menu items. Subway doesn't have this
problem because they are only adding egg as an additional element. No
matter what type of person you are, you're able to enjoy breakfast for
dinner and visa-versa.
ConcIusion:
Use these same elements for your own business. Find new ways to
challenge the status quo, pick a fight with your competitors, carve out
your niche and provide a predicable yet unique experience every time.
Franchising
Why shouId join the subway?
Joining the SUBWAY team gives you the great opportunity to own your own business,
but not just any business, a proven business with a low investment, simple operations,
flexible floor plans, national and local support, national and regional advertising, a two
week training program, ongoing learning for our owners and their staff, store
development assistance, design support; lease negotiations, construction guidance and
much, much more.
Royalty and advertisement fee of subway
SUBWAY Franchisees pay 12.5 every week (gross sales minus the sales tax);
8 goes toward the Iranchise royalties and 4.5 goes towards advertising.
LI$% of used equipment Iike $ubway
Here is an abbreviated list of used restaurant equipment that's available at Orlando's
One Fat Frog Restaurant Equipment that one might find in a Subway :
Nu-Vu Proofer / Convection Oven
refrigerated cold table
slicer
Amana oven like Turbo Chef
refrigerator
freezer
walk in refrigerator
soda fountain
ice tea dispenser
ow much cost to open the subway restaurants?
While the initial Iranchise Iee is $15,000, each location is diIIerent and the initial
investment varies depending on restaurant size, build out costs, location, etc.




InternationaI growth of the subway
W 1
st
entered into world market in 1984 in the Middle East nation of
Bahrain
W nternational expansion approach at the time was.
"f you like Subway, you think it's a good thing, and you think it
would work in your country, then we'll teach you the concept
and how it works and you go make it work in your country.
W Used development agents to recruit franchises and assist in growth
W Core menu was left unchanged, with exception of religious and
cultural consideration
They believe the sandwiches will catch on and overcome
cultural barriers

ow important is Asia for $ubway?
W n Asia there are various cultures, religions and languages
This allows for a diverse, flexible, and innovative market
W Discretionary income is rising
Major opportunity for fast-food in the growing middle class
Allows Subway to zone in on market niche





arket Opportunity Facts:
W The Asia-Pacific fast food market has experienced 11.7 percent
growth between 1999 and 2003.
W The market was worth $77.9 billion in 2003, an increase of 55.8
percent since 1999.
W This growth is considerably stronger than the overall global market
and is driven by the large-scale expansion of the Chinese market 83
%
W n terms of value, Asia-Pacific represented 28.3 % of the global
market in revenues for fast food in 2003.

Competitors:
W McDonalds
W KFC
W Burger King
W Hardee's
W Wendy's
W Popeye's






$pecific RegionaI Drivers and Concerns

W Main drivers in Asia: Type of cuisine, price, convenient location, good
hygiene standards, and health.
W Concerns in Asia: Hygiene and nutrition are two of the largest
concerns in Asia
Massive social stratification means many cannot afford even
fast food
n some poor areas, family-owned restaurants are the only way
people can make a living

arket %rends and Consumption Behavior %owards Fast
Food in Asia
W Reception to fast food is large in many developed Asian economies
and growing in others
W Trends favor places that offer a "whole package which includes all of
the regional drivers (Type of cuisine, price, convenient location, good
hygiene standards, and health)
W Obesity in Asia is causing a push toward healthy low-calorie, low-fat
alternatives to typical fast food (burgers)
W Eating at Western style places perceived as high class
W Fast food venues provide a place for many people to conveniently sit
down and eat together. Eating together is very popular in Asia.


Asia Important as a arket of Interest for
Fast Food
W Yes, absolutely
W The Asian-Pacific region represented 28.3% of global revenue for fast
food industry

arket Opportunities in Asia
Best Countries in ParticuIar in Asia

CINA
DeLuca, who founded Subway when he 17 in 1965, said China had great
growth opportunity and targeted 500 stores in the next 5 years, with 35 to
50 set to open in the coming year.
Subway was looking particularly at second tier Chinese cities for expansion
as major ones such as Beijing and Shanghai had already built a good
foundation.
DeLuca said Subway's growth in China was in the early stages of
development with awareness for products still quite low.
Subway's China stores account for 0.5 percent of Subway's global network
of 32,000 stores with markets such as the United States, Canada, Australia
and the UK making up the bulk of revenue. n 2009, worldwide sales were
$13.8 billion, of which China contributed only a "tiny" amount.

W %hird Iargest economy at triIIion doIIars
W 97 % of the popuIation eat at fast food restaurants
W %he demand for fast food increases with the economy,
more disposabIe income
W Drive-thru's are increasingIy popuIar, as weII as eat-in
restaurants
Chinese peopIe don't Iike to eat with their hands; introduce a
subway saIad bread bowI

INDIA
W ExponentiaIIy increasing middIe cIass
W Fast food market growing between and 2% annuaIIy
W Indian food is very specific, needs adaptation between
chicken, Iamb, and fish
W Very high competition, but no reaI competitors in terms
of sandwiches
W
KOREA
W Fast Food market is growing % annuaIIy
W Increasing demand for heaIthy options
W $andwich saIes doubIed in 2
W Young professionaIs and students are interested in
heaIthy options and Iow caIories