No.1 Franchise is Now Subway

This post was written by Michael on February 18, 2010
Posted Under: Franchise News

Subway Franchise

Subway Franchise Healthy Alternative

Subway is a pretty safe bet, according to Entrepreneur magazine.

The Milford-based restaurant chain recently was recognized by the national publication as the No. 1 franchise opportunity for 2010, marking the 17th time out of the past 23 years that it has received the distinction. It also has been recognized by the magazine for the past several years as the No. 1 global franchise of the year.

“We’re very proud of Subway and the way it has grown,” Milford Mayor James Richetelli said of the company that started as a small sandwich shop in Bridgeport. “That growth has been in good part due to the many Milford residents that work there.”

Subway originally was founded in 1965 by Fred DeLuca and Peter Buck as Pete’s Super Submarines at 3851 Main St., across from Jewett Avenue in Bridgeport. Since opening its first franchise unit in 1974 in Wallingford, Subway has grown to more than 32,000 independently-owned stores with about 150,000 workers in 90 countries, including Iraq, Afghanistan and Zambia. There are nearly 23,000 stores in the United States, according to Subway’s Web site. As of December 2007, Subway sales totaled $13.2 billion worldwide, including $8.2 billion in the United States.

Subway, which is Connecticut Retail Merchant Association’s 2009 Retailer of the Year, will surpass McDonald’s as the fast-food chain with the most outlets worldwide, according to Entrepreneur magazine.

“We think this is a reflection of the strong system we have in place and the thousands of hard-working franchisees we have out there,” said Subway spokesman Kevin Kane, adding that Subway’s latest campaign, the “$5 foot long,” came from Miami franchisee Stuart Frankel. “Some of our best initiatives have come from them.”

Messages left with Entrepreneur seeking comment were not returned.

Doctor’s Associates Inc., Subway’s privately held franchisor, employs about 600 people at its headquarters at 325 Bic Drive, Milford, and has regional offices in Amsterdam, the Netherlands; Beirut, Lebanon; Brisbane, Australia; Miami and Singapore. The franchisor, which also is referred to as DAI, got its name because Buck was a scientist with a doctoral degree, and DeLuca had aspirations of becoming a doctor.

DeLuca began the business when he was 17 with a $1,000 loan from Buck, his family friend and partner, who suggested opening a sandwich shop to pay for college.

In addition to being a boon to the city’s economy, Subway also is a staunch supporter of local events, Richetelli said.

“All we have to do is ask and they are there donating sandwiches,” he said.

Subway’s success is partly because it keeps up with market trends, said Kathleen Alagno, president and chief executive officer of the Milford Chamber of Commerce.

“My congratulations to Fred DeLuca and the entire Subway team,” she said. “We are proud to have them based in Milford.”

Bob Gregory, Milford’s economic development director, agreed.

“Especially in these times when people are looking for other options in their life, owning a Subway franchise is one way to go,” he said. “We congratulate them on this recognition and wish them many more years at the top.”

Overall costs to open a traditional Subway restaurant in the United States for the first three months range from $114,800 to $258,300, not including exterior renovations. Each franchisee candidate is required to attend a two-week training course on business concepts, methods of operation and basic management skills and pass an exam. Franchisee training centers are at the Milford headquarters and in Miami, Australia, Brazil, China, Canada, Germany, India, Korea, Lebanon, Paris and Russia. There also are courses for managers, multi-unit owners, field consultants and development agents.

A franchise aspiring to be as successful as Subway should determine whether its business concept is replicable in many areas, delivers a unique product that meets consumer demand and provides an adequate return, said Alisa Harrison, vice president of communications and marketing for the International Franchise Association.

“If you can answer yes to these questions, you are off to a good start in building a successful franchise business,” she said.

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