Fellowship

Xartup TM     Fellowship

From Doctor to Owner of World’s Biggest Fast Food Chain

In today’s blog we will take a closer glance at how an medical doctor aspirant build world’s largest fast food chain.

Beginning

  • Fred DeLuca, the founder of Subway, set out to pursue his ambition of becoming a doctor. He needed money and was looking for someone to assist him pay for his studies. A family member recommended he launch a submarine sandwich store. Dr. Peter Buck, gave him a $1,000 loan to become DeLuca’s business partner. Submarine sandwiches were their only speciality, so they built a restaurant named Pete’s Super Submarines. They even planned and set a 10-year target of building 32 outlets.

 

  • It didn’t take long for Subway to expand and predict enormous success after its founding. In 1978, the first Subway debuted in California, and by 1984, it had expanded internationally by launching a franchise in Bahrain.

 

  • There are 26,744 Subway restaurants in the United States, which surpasses the number of McDonald’s outlets in the country, making Subway the largest restaurant chain in the country. Subway has remained a high-ranking franchise on Entrepreneur’s Top 500 Franchises list since 2007.

 

Growth

  • Subway has battled to preserve its dominance in the sandwich business and its presence in the food sector throughout the years.

 

  • Subway began as a franchise-based company in 1974. Eight years later, the firm had grown from 16 to 200 locations, thanks to many advances and experiences. Subway has grown to roughly 5,144 sites by 1990, with an aim of 8,000 by 1995. Customers’ growing trust in Subway helped the firm grow to 10,000 locations by 1995.

 

  • Subway battled with McDonald’s and eventually surpassed it in terms of number of locations in 2002. The yearly income from stores across the countries was $9 billion in 2013. According to reports, Subway now has over 44800 locations across 114 countries.

SUBWAY IN INDIA

  • With large number of younger working people that are drawn to anything that represents modernity, the Indian market is lucrative sector for global brands like Subway to target.
  • Subway, the iconic American restaurant brand that has successfully extended throughout the globe, is now expanding into India. Subway, the global sandwich restaurant and food company, has opened its 600th franchise location in India, in Bharuch, Gujarat.

 

  • Subway is teaming with well-known food aggregators in India to expand its delivery network. They’re also excited to make things easier for customers by offering mobile ordering to the Indian market.

 

  • In a country like India, the Subway franchise is easy and inexpensive to start, and there are a large number of Subway locations. Currently, the American fast-food chain has roughly 660 locations in India, making it the eighth-largest market in terms of restaurant count worldwide.

Deal With Reliance

  • Reliance Retail purchased Subway’s Indian business on August 4, 2021. The firm is said to have the third-largest stake of the Indian QSR industry, which is now valued at Rs 18,800 crore, with Domino’s and McDonald’s leading the way with 21 percent and 11 percent shares, respectively.
  • The Mukesh Ambani-led Reliance Industries Limited appears to be on a buying binge. After dabbling with a variety of industries, including grocery, e-pharmacy, edtech, music, furniture, and more, the company now appears to be focusing on the QSR industry.
  • Subway India’s takeover transaction is said to be worth between $200 and $250 million.
  • Subway combines the freshness and healthfulness of its menu choices, which include sandwiches and other bakery goods, with the quickness and convenience of fast food. Subway, the fast-food restaurant company, has become a worldwide sensation, and its Indian offshoot has long been regarded as a national treasure. However, the current purchase deal with Reliance Retail may put an end to Subway Inc’s hunt for a single partner to help expand the company’s operations, but the arrangement may also herald in a bright future.

Downfall

  • According to Technomic analysis, Subway’s domestic sales fell to $8.3 billion in 2020, down from $10.2 billion in 2019. Additionally, the drop in sales has been accompanied by a large number of retail closures. Subway has shuttered the most sites among significant fast-food restaurants since March of 2020, with 1,557 fewer outlets than a year ago—a 6.6 percent net loss. Currently, there are approximately 22,200 locations in the network, but experts estimate that figure is expected to shrink significantly in the coming years.

 

  • Experts appear to be in agreement. Because of the increased rivalry in the sandwich market and the low profitability of Subway’s outlets, the brand is seen as an undesirable investment option.

 

  • Franchisees are attempting to get out of leases and ownership by selling businesses .  In addition, the value of a Subway store has dropped considerably for example in California in the previous five years the cost has dropped from, $300,000 to $400,000 to $100,000 at best.

 

Follow us on

Leave a Reply