After “refreshing” its entire menu in 2021, Subway is now turning its attention to its franchise system. The sandwich chain is embarking on a “multi-year transformation journey,” which will include updating its roster of franchisees, according to a recent company statement.
Specifically, Subway hopes to swap some of its single-unit franchisees, many of whom are first-time business owners, with larger franchise companies. “The brand is actively inviting franchisees with multiple resources and multiple units to join the company…and discuss potential acquisition of restaurant portfolios with existing operators,” the statement read.
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The transition to larger-scale contracts is part of Subway’s longer-term goal of becoming an “experience-driven” company. The chain says it wants to improve the customer experience in its restaurants and believes that well-funded multi-unit operators are its best bet to achieve this goal. Planned enhancements include system-wide store remodeling and investment in offsite formats.
“To ensure we remain competitive for years to come, we are expanding with high-calibre, multi-unit franchisees who bring operational expertise, development capabilities and capital,” said Steve Rafferty, senior vice president of development of Subway.
This is great news for Subway. The brand’s 21,000 locations are mostly run by single-unit, mom-and-pop operators, thanks to the fact that they offer some of the lowest start-up costs in the quick-service restaurant industry. Initial franchise fees at Subway are as low as $15,000, about a third of what McDonald’s charges, according to a 2019 estimate. It’s a selling point that has helped the chain become the biggest company in fast food in the United States.
But with its new focus on customer experience, Subway is shedding its famous growth strategy, hoping to transition to a stronger, more consolidated franchise system better positioned to deliver a “consistent, high-quality customer experience.” quality”. Whether the chain will be able to attract this type of high-calibre clientele remains to be seen.
Owen Duff is a freelance journalist based in Vermont, home of Ben & Jerry’s. Read more