Offering an array of healthy products compared to other fast food joints, Subway tops the priority list of majority of people. Working on this course, fast Subway restaurant chain has gained a lot of popularity and has been on an expansion spree pan India. Manpreet Gulri, Development Agent, Subway Systems India shares the origin, growth and future plans of Subway across India.
Abha Garyali (AG): Tell us something about the origin, growth and success of ‘Subway’? When, where and how did it originate?
Manpreet Gulri (MG): The first subway restaurant was opened in 1965 in Bridgeport, USA. A business relationship was forged between 17 year old Fred Deluca and Peter Buck that forever changed the landscape of the fast food industry. Subway chain was started by Fred Deluca who borrowed 1000 USD from his friend Peter Buck to start a submarine sandwich shop.
AG: When did Subway initiate franchising?
MG: The first franchised Subway unit opened in 1974 in Wallingford, Connecticut by Brian Dixon which not only changed his life but also changed the way that Subway did business.
AG: What difference have you noticed in the performance of the company after it opted for franchising?
MG: Fred Deluca and Peter Buck turned to franchising as they believed it was the best way to expand successfully. The company has grown very quickly since it started franchising. Subway restaurants are now the second largest fast food chain in the world with more than 31,000 Subway franchises in 91 countries and territories worldwide.
AG: How is Subway different from other restaurants? What is the USP of Subway?
MG: The USP of the brand is fresh and low calorie exotic dishes. It provides its customers with a delicious and healthy alternative to greasy fast food. Subway restaurants are simple to operate compared to other restaurants.
AG: What qualities do you look in prospective franchisees for your company?
MG: The prospective franchisee should be a true entrepreneur and needs to have a drive to be successful in business.
AG: How many franchisees do you have in India? Where are they located?
MG: In India we have 155 outlets in Delhi, Mumbai, Kolkata, Chennai, Ludhiana, Jaipur, Jalandhar, Amritsar, Patiala, Chandigarh etc.
AG: What all training and support do you provide to the franchisees?
MG: The Subway brand provides a variety of services, such as store design and local marketing assistance. A two week intensive training is provided which is compulsory for every franchisee to attend.
AG: How much investment is required by an aspiring franchisee?
MG: The set-up cost is very low. The average set up cost for a small mall or food court type location of about 350sq. ft varies between Rs.25-30 lakh. The set up cost for a larger independent location of about 750 sq. ft. is Rs.30-35 lakh. This includes cost of equipment, furniture and interiors.
AG: What are your future plans in terms of expansion through franchising?
MG: We plan to have 225 restaurants by 2010, 275 by 2011 and take the total score to 530 outlets by 2014.
AG: What are the challenges faced by a franchisee in this business?
MG: Operational challenges could be faced in the beginning but for that the local development agent office is available for assistance. Along with that the extensive online training tools are also available for the franchisees.