Thursday, August 2, 2012

Franchiser and Franchise question

1.Does the company offer any financial assistance to its franchisees?

For new franchisees, the SUBWAY® System offers an equipment leasing programme. For existing franchisees, the SUBWAY® System offers remodeling, relocation and expansion loans.

2.What other support does the company offer its franchisees?

The SUBWAY® network provides a variety of services, such as outlet design and local marketing assistance.

3. How does the SUBWAY® System and HQ communicate with its franchisees and the world?

HQ communicates with its franchisees through a bespoke communications system, newsletters, conference calls, email, and regularly produced training videos. The SUBWAY® Development Agents also communicate with franchisees on a regular basis. It also communicates to the world and franchisees via the Internet.

4. How many franchise outlets now exist? How many outlets are companies owned?

Almost all SUBWAY® outlets are franchised. There is only one company-owned unit, which is operated as a testing facility by the Research and Development department.

5. What kind of training program does the franchiser offer?

Each franchisee candidate is required to attend a two-week training course. The time is spent in the classroom and on-site at a local SUBWAY® outlet. The course consists of 50% classroom training and 50% outlet training, so franchisees can practise in reality what they have learnt in the classroom. At the end of the two weeks, each attendee must pass a comprehensive exam in order to become a SUBWAY® franchisee. Once the training is complete, they will begin working with their Development Agent on the next steps.

6. How much is the franchise fee? What additional fees are there?
  • Initial franchise fee is RM 406,200 - RM 886,650
  • Franchise fee is RM30,000
  • Leasehold improvements and equipment.
  • Hiring employees and operating restaurants.
  • Paying 8% royalty to the company and a fee into the advertising fund.

7. How risky is the franchise opportunity?

The SUBWAY® franchise is actively seeking businesses to lease space to a trained franchisee. There are also thousands of corporate, as opposed to individually owned, SUBWAY® stores around the world. The flexibility of the chain’s franchise system has allowed SUBWAY® outlets to open in a variety of locations. These include:
  • Convenience stores
  • Shopping centres
  • Airports
  • Railway and bus stations
  • Hospitals
  • Universities, colleges and student unions
  • Motorway service stations
  • Department stores
  • Military bases
  • Stadiums and arenas
  • Amusement parks
  • Casinos
  • Convention centres
  • Places of work
8. How does the franchise handle complaints from and disputes with franchisees?

Customers are allowed to send complaints though the contact form from Subway company website and they will feedback concerning specific restaurants are forwarded to the owner(s) of the SUBWAY® restaurant. Otherwise, we do not provide your information to third parties.


Appendices


i was take a picture at Subway Festival Mall after having a interview with supervisor 



We go to PWTC have a interview with franchisor about the information of open a franchise outlet.

Franchisor Question of Subway

1.What is the background of the company?

Subway took its journey from a single outlet in Perth and now has a target market of young Australian consumers that is more nutrition conscious and focuses on having healthy food as opposed to burgers or fries. It happens to be the undisputed market leader in the category of sandwiches while it has a competitive edge over others in terms of having ten times more locations than any other brand. By the year, 1993, Subway had opened up 8,400 stores with most of them being in North America that made it the number two fast food chain in the United States with Pizza Hut being on number one (McDonald, 1998). 

2.What is the company’s current financial status?

The current financial status Subway company is stable.There are related party transactions between the Company and its shareholders, for office rental and non-interest bearing loans.  During fiscal 2008, the Company loaned one shareholder RM48,400,000($12,100,000) in which RM36,400,000($9,100,000) was paid back in 2012.The Company is liquid and has a good current ratio of 1.9 to 1.  The Company for tax purposes is treated as a Sub chapter S Corporation and therefore pays no federal income tax.  During the year ended December 31, 2012, the Company paid RM34,316,000($8,579,000) of dividends to its shareholders as distribution.It appears from the face of the financial statements that the Company owns RM56,000,000($14,000,000) in machinery and equipment, which is part of the franchisee unit.  The nature of the Company’s revenues is not evident from the financial statements.  The statement of operations is in summary form and does not detail the expenses.

3.What is the performance of the company record?

SUBWAY Franchisee of the Year awards are presented to the overall winners of the multi-unit and single unit owner categories from North America and the chain's international emerging and developed markets. Selected from among the chain's more than 17,000 franchisees from around the world, the recipients are: Joe Franch of Rochester, NY & Steve Stewart of Buffalo, NY; Blake Newton of Gunnison, Utah; Ismail Mohammad of Lynnwood, Washington; Jennifer Smith & Julie Jansen of Cobar, Australia; Neil Garnett of Innisfail, Australia; Andre Lima Dos Santos of Rio de Janeiro, Brazil; Carolina Ugalde Olavarria of Huechuraba, Chile; Abdul Almutairi of Sharq, Kuwait; and Pavel Andrianov & Yury Gurgov of Moscow, Russia.

4.How the companies train the franchisee?

Franchise World Headquarters is proud of the excellent support systems available to SUBWAY® franchisees. Ongoing support is provided before and after you open your store. As soon as you join the SUBWAY® team, you’ll have access to help to get you started. Once open, systems are in place to help you operate your location effectively.Before You Open:
  • Training-
     You and your designee or manager will take part in our intensive two-week program.
  • Restaurant/Store design-
     You will be provided with floor plans for your specific location.
  • Site selection-
     You will be assisted in evaluating the location for your business.
  • Equipment ordering-
     You will receive guidance on ordering your equipment package for timely delivery.
After You Open:
  • Operations manual
     - SUBWAY® restaurants’ in-depthmanual covers a full range oftopics important to running your business.
  • Field support
     - Your local representative will help you get started and provide ongoing operational evaluations.
  • Franchisee services
     -A coordinator will serve as your main contact person, who is just a phone call or e-mail away.
  • R&D
     - SUBWAY® franchise executive chef, baking specialists, staff nutritionist, and product development team continually strive to make our excellent food even better.
  • Continuing education
     - Regular newsletters, e-mails and voice-mails, DVDs and additional learning tools are also available.

5.What is the competition of the company?

Just as in any other fast food segment there is extensive competition, with many sandwich chains, each battling to be number one while still competing from its individual niche.McDonald's is still the power player within the fast-food sandwich segment.  McDonald's is number one in unit allocation, with a total of 12,750 company-owned and franchised units and holds a #1 rank in market share.  Within Subway's niche market, they are the power player, with Burger King and Wendy's a distant second.

6.What is the Company mission ?


“ To provide the tools and knowledge to allow entrepreneurs to successfully complete in the QSR industry worldwide by consistently offering value to consumers through providing great fasting food that is good for them and made the way they like it” (Subway , 2005 )


'Our People,Our Communities' is a slogan for our mission.We know that it takes more than just good food to nourish a strong people and build a vibrant community. It starts with taking care of people, the heart and soul of the SUBWAY® experience.We value the cultural richness and breadth of ideas resulting from the diversity that is fostered in who we are and what we do. We are dedicated to building strong business relationships through open communication, respect and by with each other as well as by serving our customers and our neighborhoods; much like we do within our own families.As the franchisor of the SUBWAY® brand, we draw on the strong entrepreneurial spirit and passion that exists throughout our organization to help shape and grow our business. We strive to and create opportunities for our franchisees, their staff, and the people within the communities in which serve.We continually challenge each other to succeed through teamwork, against shared goals & benchmarks, and to be accountable for our actions. We take great pride in our business and are committed to being good global citizens; to encouraging healthy, active lifestyles and to making a difference where we live and work around the world.
7. What are the strategies marketing of Franchisor?

The Subway example represents marketing and product strategies that are classic examples of focusing on market demand, consumer trends, product leveraging, and innovation. The marketing strategies of creating clear brand recognition, brand and product association, and market demands, have strategically positioned Subway to advance market share into the near future. These marketing strategies are also repeatable fundamental marketing strategies transcending the fast food market. 


8.What is the SUBWAY® Brand's marketing goal?


To bring customers into the stores and keep them coming back! In other words, the SUBWAY® Stores wants to make all potential customers aware of its products, convince them to try it, and by providing good value, and great fresh food, turn them into regular satisfied customers.

History of Subway

History of Subway

The Seventeen-Year-Old Entrepreneur

In 1965, Fred DeLuca set out to fulfill his dream of becoming a medical doctor. Searching for a way to help pay for his education, a family friend suggested he open a submarine sandwich shop.
The First store
With a loan of $1,000, the friend, Dr. Peter Buck offered to become Fred’s partner, and a business relationship was forged that would change the landscape of the fast food industry.
The first store was opened in Bridgeport, Connecticut in August, 1965. Then, they set a goal of having 32 stores opened in 10 years. Fred soon learned the basics of running a business, as well as the importance of serving a well-made, high quality product, providing excellent customer service, keeping operating costs low and finding great locations. These early lessons continue to serve as the foundation for successful SUBWAY® restaurants around the world.



SUBWAY®, the Franchise

By 1974, the duo owned and operated 16 submarine sandwich shops throughout Connecticut. Realizing they would not reach their 32 store goal in time, they began franchising, launching the SUBWAY® brand into a period of remarkable growth which continues to this day.

A Fresh Future

Today, the SUBWAY® brand is the world's largest submarine sandwich chain with more than 34,000 locations around the world. We’ve become the leading choice for people seeking quick, nutritious meals that the whole family can enjoy. From the beginning, Fred has had a clear vision for the future of the SUBWAY® brand. As we continue to grow, we are guided by his passion for delighting customers by serving fresh, delicious, made-to-order sandwiches.

Timeline for start the business


1965 

Fred DeLuca and Dr. Peter Buck team up to open their first submarine sandwich shop in Bridgeport, Connecticut. Originally called “Pete’s Super Submarines,” they sell 312 sandwiches the first day. The average cost of a sub was between 49 cents and 69 cents.

1966 

Partners DeLuca and Buck form Doctor’s Associates Inc. The name is derived from Dr. Buck, who holds a Ph.D., and the fact that DeLuca hoped to earn enough money in the sandwich business to pay his college tuition and eventually become a medical doctor.

1968 

The SUBWAY® name is used for the first time.

1974 

The first franchised SUBWAY® sandwich shop opens in Wallingford, Connecticut.

1975 

The chain’s flagship sandwich, the classic BMT, is first introduced. It is named for the Brooklyn-Manhattan Transit system, but later it is referred to as “Biggest, Meatiest, Tastiest,” in advertising campaigns. The first SUBWAY® restaurant located outside of Connecticut opens in the state of Massachusetts.

1976 

The first SUBWAY® restaurant in Florida opens in Ft. Lauderdale. The Training Department is established at SUBWAY® headquarters in Milford, Connecticut.

1977 

The “Snak” sub sandwich is introduced. The name is later changed to the “6-inch.”

1978 

The first SUBWAY® location on the West Coast opens in Fresno, California

1980 

The SUBWAY® chain introduces its New York City transit-system-themed mural as a décor item in a restaurant in Ithaca, New York.

1981 

 SUBWAY® restaurant number 200 opens in Renton, Washington.

1982 

The SUBWAY® chain opens its 300th location.

1983 

SUBWAY® restaurants begin introduction of freshly baked bread at U.S. locations. The SUBWAY® chain is ranked number one in the sub sandwich category for the first time byEntrepreneur magazine.

1984 

Party Platters and the SUBWAY® Club sandwich are introduced. The 400th Subway restaurant in the United States opens in Dallas. The chain ventures into the international arena and opens a unit in the Middle Eastern nation of Bahrain.

1985 

Steak and Cheese and Wheat Bread are added to the menu. The SUBWAY® restaurant chain celebrates the opening of the 500th unit, and the opening of the first restaurant in Puerto Rico.

1986 

Breakfast menu is introduced at SUBWAY® restaurants at participating locations. The first SUBWAY® restaurant in Canada opens in St. John’s, Newfoundland.

1987 

SUBWAY® restaurants now number 1,000 locations with opening in Anderson, Indiana. The chain opens the first locations in the state of Hawaii and in the Bahamas.

1988 

Cold Cut Combo is introduced. The chain’s 2,000th location opens in Kaneohe, Hawaii. First Australian location opens in the city of Perth. Entrepreneur magazine lists the chain as the number one franchise opportunity for the first time in their annual Franchise 500 rankings.

1989

The 3,000th SUBWAY® restaurant opens in North Muskegon, Michigan. The SUBWAY® chain now present in all 50 U.S. states. First SUBWAY® restaurant opens inside a grocery store. A SUBWAY® restaurant has a cameo appearance in the Mel Gibson film, “Lethal Weapon 2.”

1990 

The SUBWAY® restaurant chain reaches its goal of 5,000 restaurants with an opening in Texas. The first SUBWAY® restaurant opens in Mexico.

1991

The first SUBWAY® kid’s meal is introduced, known as the Kids’ Pak™. First SUBWAY® restaurants open on a college campus and in an amusement park. First SUBWAY® network TV commercial airs. SUBWAY® products are featured in the motion picture “Terminator 2: Judgement Day.”

1992 

The SUBWAY® chain participates in its first school lunch program. First Subway restaurants open in Japan and Saudi Arabia.

1993 

The first SUBWAY® restaurant opens inside a convenience store. The SUBWAY® brand is featured in scenes in the films “The Coneheads” and “The Beverly Hillbillies.”

1994 

Restaurants and Institutions magazine gives the SUBWAY® restaurant chain the top ranking in their consumer choice survey for the sandwich category. SUBWAY® restaurants open for business in Austria, Brazil, Iceland and Russia.

1995

The chain celebrates its 30th anniversary with the opening of the 11,000th location. The SUBWAY® chain becomes a supporter of the Produce for Better Health Foundation’s National 5-A-Day program. SUBWAY® chain begins first motorsports sponsorship with an Indy race car. SUBWAY® restaurants open in China, Costa Rica, Ecuador, Egypt, El Salvador, Honduras, Ireland, Jamaica, New Zealand, Spain, Switzerland and Taiwan. The SUBWAY® brand is featured in scenes in the movie “Ace Ventura--When Nature Calls” and on TV in the animated series, “The Simpsons.”

1996 

The SUBWAY® restaurant chain opens its 300th international location. SUBWAY® shops arrive in Colombia, Denmark, Guatemala, Kuwait, Martinique, Nicaragua, Philippines, Singapore, South Africa, Turkey, United Kingdom, Uruguay and Venezuela. The motion picture, “Happy Gilmore” features numerous scenes at a SUBWAY® restaurant.

1997 

SUBWAY® chain introduces the “7 under 6” menu, featuring seven sandwiches with 6 grams of fat or less. SUBWAY® restaurants open in Bolivia, Lebanon, Malaysia, and Panama.

1998 

The chain opens its first restaurants in Italy, Norway, Pakistan and the United Arab Emirates. Convenience Store News reports the SUBWAY® chain is the most preferred fast-food partner among convenience store executives.

1999 

The 14,000th SUBWAY® restaurant opens. For the first time ever, SUBWAY® commercials appear on network television in the U.S., every week of the year. The first SUBWAY® restaurants open in Germany, Qatar, Sweden and Zambia. The SUBWAY® float entered in Tournament of Roses parade wins the Governor’s Trophy for the first time.

2000 

Men’s Health magazine reports the story of Jared Fogle, a young man who lost 245 lbs. by eating SUBWAY® sandwiches for a year. He eventually becomes an icon for the brand and appears in a long running series of television commercials. SUBWAY® restaurants open in Finland, Netherlands, Poland and Tanzania. Fred DeLuca’s book Start Small Finish Big--Fifteen Key Lessons to Start--And Run-Your Own Successful Business is published by Warner Books. The SUBWAY® chain makes the biggest changes to its menu to date by introducing a line of sandwiches featuring four gourmet sauces and seasoned breads. The SUBWAY® brand is featured in the film, “Saving Silverman,” which stars actor and former SUBWAY Sandwich Artist®, Jason Biggs.

2001 

The chain reaches 15,000 restaurants worldwide. Cucumbers are added to the SUBWAY® menu. The first restaurant opens in Croatia, France, India and Oman. The SUBWAY® chain is the winner of the gold award for the sandwich category in the Restaurants and InstitutionsChoice in Chains Award and receives the MenuMasters Award for best menu/line extension from Nation’s Restaurant News. The SUBWAY® brand is mentioned on TV shows such as “Friends”, “Jeopardy”, “Saturday Night Live”, “The Tonight Show” and “The Late Show with David Letterman.”

2002 

The Wall Street Journal reports that the SUBWAY® chain has surpassed the number of open and operating McDonald’s restaurants in the U.S. SUBWAY® restaurants reach the milestone of 16,000 locations worldwide. That record is broken several months later when the chain opens its 17,000th location. The SUBWAY® chain opens its first restaurants in Belgium and Bulgaria. The SUBWAY® chain becomes the national sponsor of American Heart Association’s American Heart Walks. The SUBWAY® chain’s Tuscany Décor is rolled out marking the first complete interior and exterior revamp the chain has ever undertaken.

2003 

The 20,000th SUBWAY restaurant opens. Research firm, Sandelman & Associates’ Quick Track National Study rates SUBWAY® highest among national fast food chains and the leading chain based on the availability of healthy/nutritious food. The SUBWAY® chain wins Silver Skillet awards from Restaurant Business magazine. First SUBWAY® restaurants open in the Czech Republic and Luxembourg.

2004

The 22,000th SUBWAY® restaurant opens. A SUBWAY® restaurant opens inside the True Bethel Baptist Church in Buffalo, NY, where the pastor, who is the franchisee, uses the restaurant to teach job skills to area residents who are in need of a helping hand. SUBWAY® restaurants open for the first time in St. Kitts, St. Martin, Hungary, Grenada, and Chile. The SUBWAY® chain launches its FRESH Steps childhood obesity initiative.

2005

The 24,000th SUBWAY® restaurant opens. Toasted subs are introduced. The SUBWAY® chain is named Best Franchise in North America by Global Finance magazine and takes two first place spots in QSR magazine’s inaugural “Best of” Awards, being recognized for “Best Use of Space” for its non-traditional location strategy and “Best Grassroots Giving” for the on-going efforts of franchisees to give back to their communities. A SUBWAY® restaurant opens at the South Carolina regional headquarters of Goodwill Industries. The restaurant is part of a program dedicated to helping people with barriers to employment learn the skills needed to better provide for themselves and their families. SUBWAY® restaurants open for the first time in Anguilla and Antigua.

2006 

The 26,000th SUBWAY® restaurant opens. The SUBWAY® chain sponsors Little League Baseball World Series, held in Williamsport, Pennsylvania.

2007

The 28,000th SUBWAY® restaurant opens. The SUBWAY® chain launches its Fresh Fit® and Fresh Fit for Kids™ meals. The first SUBWAY® Eco-Restaurant opens in Kissimmee, Florida to incorporate more environmentally responsible operations and to introduce the chain’s Eat Fresh, Live Green™ initiative.

2008 

The 30,000th SUBWAY® restaurant opens. The SUBWAY® introduces its long running $5 Dollar Footlong promotion.

2009

The 32,000th SUBWAY® restaurant opens. SUBWAY® opens first restaurants in Macau and Slovakia.

2010 

The 33,000th SUBWAY® restaurant opens. 25,000 SUBWAY® restaurants throughout the U.S. and Canada introduce the brand’s new national breakfast offerings, which include a variety of omelet sandwiches made with the customer’s choice of egg whites or whole eggs. The SUBWAY® brand is featured in the hit TV show, Undercover Boss. Jared, the “Subway Guy” runs the New York City marathon. Unique SUBWAY® restaurants opening include one on a riverboat in Germany and at the 1 World Trade Center construction site in New York City. The restaurant, which is only accessible to construction workers and those with official business on the site, is housed on a crane that rises as each floor of the building is completed.

2011

With more locations than any other restaurant chain worldwide, the 35,000th SUBWAY® restaurant opens, including the 8000th non-traditional SUBWAY® restaurant. The chain received the first ever “A” in the Eat This, Not That! Restaurant Report Card, as well as top honors from Zagat. Five more Eco Restaurants open, bringing the total up to 14, with other locations incorporating eco elements.