| Subway | |
|---|---|
 |
|
| Type | Wholly owned subsidiary |
| Founded | Bridgeport, Connecticut (1965) |
| Founder | Fred De Luca and Peter Buck |
| Headquarters | Milford, Connecticut |
| Key people | Fred De Luca (President) Millie Shinn (EVP) David Worroll (Controller) |
| Industry | Fast Food |
| Products | Sandwiches Salads Pizzas Other food products |
| Revenue |  $9.05 billion USD (2006) |
| Employees | 150,000 (2003) |
| Parent | Doctor's Associates |
| Slogan | Eat Fresh |
| Website | [Subway] |
Subway is the name of a franchise fast food restaurant that mainly sells sandwiches and salads. It was founded in 1965 by Fred De Luca and Peter Buck. The corporation that owns the trademarked name of Subway is Doctor's Associates, Inc. (DAI). The company has over 28,400 franchised units in 87 countries as of September 2007 and is the fastest growing franchise in the world.[1] Currently, Subway is the third largest fast food chain globally after Yum! Brands (34,000 locations) and McDonald's (31,000 locations).[1][2][3] Subway's main operations office is in Milford, Connecticut, and five regional centers support Subway's growing international operations. The regional office for Europe's 1,000 stores is in Amsterdam, Netherlands. Australia and New Zealand, with over 2,100 outlets, is supported from Brisbane, Australia. The 300 Middle Eastern locations are supported from Beirut, Lebanon. Singapore supports the 300+ Asian locations. The Latin American Support Center in Miami assists over 1,100 restaurants. In the UK and Ireland the company hopes to have 2,010 restaurants by the year 2010[4]. Many restaurant analysts attribute Subway's fast growth to the growing concern on health by restaurant customers, a trend that Subway has taken advantage of in its marketing. In 1999, an Indiana University student named Jared Fogle lost 245 pounds (110 kg) with a diet made up mostly of Subway sandwiches combined with exercise. The story is used by Subway as a large part of their marketing campaign to this day. Jared has emerged as a spokesman for Subway, furthering their image as a health-conscious restaurant chain.
Contents |
History
Fred DeLuca borrowed $1,000 from family friend Dr. Peter Buck to start his first sandwich shop in 1965, when he was only 17 years old. He was trying to raise money to pay for college. He chose a mediocre location for his shop, but by noon on the first day of the opening, customers were pouring in. On the radio advertisement they had promoted the name as "Pete's Submarines", which sounded like Pizza Marines, so they changed the name to "Pete's Subway"; eventually it was shortened to "Subway", as it is known to this day. As of 2007, the company has over 28,400 franchised locations in 87 countries and produces US$ 9.05 billion sales every year. In 2007, Forbes magazine named DeLuca number 242 of the 400 richest Americans with a net worth of 1.5 billion dollars. When the company was founded, Dr. Peter Buck, co-founder, was a scientist with a doctoral degree, and Fred DeLuca had aspirations of becoming a medical doctor. Hence the name Doctor’s Associates, Inc. As of 2007 the commercials use Peter Griffin from Family Guy. In 2008 Brett Carrillo and Andrew Presler, of the band Apertura, will appear in commercials for the company.
Operations
Subway uses the advertising slogan "Eat Fresh" to explain how every sandwich is made on freshly baked bread, using fresh ingredients, in front of the customer to their exact specification, by employees who Subway terms "Subway Sandwich Artists®". In 2000, Subway added seasoned breads and a line of specialty items to its menu. In 2003 Doctor's Associates Inc. (DAI) signed an exclusive contract to offer Coca-Cola products. Coca-Cola helped pay for the initial rollout of toaster ovens to existing restaurants. Subway gave customers the option to have their sandwiches toasted in response to increased competition from rival sandwich chain Quiznos Sub, which popularized toasted sandwiches. In Australia, the introduction of Fresh Toasting enabled the Subway Franchise to prevent Quiznos from gaining market share. The Turbo Chef toaster is a microwave and convection oven hybrid. In addition to traditional restaurants, Subway operates in many non-traditional locations. For instance, there are over 900 Subway locations inside of Wal-Mart stores and 200 on military bases, including several in Iraq, in addition to three located inside The Pentagon - as well as an increasing number on college and university campuses. There is at least one adults-only Subway, located at Foxwoods Resort & Casino. It is accessible only after entering a gaming area which is restricted to guests 21 and over, but it also has a drive thru.
In 2006, the first kosher Subway restaurant opened in a suburb of Cleveland, Ohio. Jared Fogle, who is Jewish, was in attendance at the opening. "With slight modifications, such as no pork-based products such as bacon or ham, and the use of soy-based cheese, the menu is virtually identical to that of any other Subway restaurant." [4]. Around 15 further locations are planned for 2007, in places including Baltimore, Brooklyn, Kansas City and Los Angeles.[5]. All Subway restaurants in Muslim countries serve Halal menu, There are also at least two Subway restaurants in the United States that do the same, and 3 in the United Kingdom. Local franchisees have plans to open seven more Halal operating Subway restaurants in the United Kingdom later in the year.[5] In addition to its corporate positioning as a more health-conscious restaurant, much of Subway's rapid growth can be attributed to its somewhat unique business model. Unlike most franchisors, the parent company does not operate any restaurants. Local franchisees operate the stores, and in most markets Subway enters into a contract with a franchisee to be its Development Agent for that market. The Development Agent is then responsible for developing new locations, evaluating stores on a monthly basis, and assisting franchisees with whatever needs they may have. 8% of sales at each location go to royalties to Doctors associates (they give third back to the local DA), while 4.5% (as of 1 January 2008) of sales go into a fund, the Subway Franchisee Advertising Fund Trust, also known as SFAFT which is operated by a board of directors voted on by Subway Franchisees. SFAFT is in legal battles with Subway over their excessive spending of advertising funds on things other than advertising. Among lawyers, Subway has become well-known for its aggressiveness in enforcing the arbitration clauses in its franchise agreements. One case even went all the way to the U.S. Supreme Court (and the company won). See Doctor's Associates, Inc. v. Casarotto, . Subway is the corporate sponsor for two NASCAR Nextel Cup series stock car races: the Subway Fresh Fit 500, held at Phoenix International Raceway; and the Subway 500, held at Martinsville Speedway. In addition, Subway has been the primary sponsor of the NASCAR Nextel Cup number 16 car, driven by Greg Biffle. Biffle has appeared in advertising for Subway along with his Crew Chief Doug Richert. In 2007, Tony Stewart has appeared with Jared Fogel in ads, and it is likely that he will drive his #20 Home Depot Chevrolet with Subway primary sponsorship in the two Subway sponsored races. Previously, Subway had sponsored Jeff Purvis' #51 car in at least one race in 2001. They also sponsor a pro-cycling team. Subway restaurants has been consistently ranked in Entrepreneur Magazine's Top 500[6] Franchises, and was selected as the #1 overall franchise in 2007. Additionally, it was ranked as the #1 "Fastest Growing Franchise", [7]and the #1 "Global Franchise"[8] as well.
The Subway menu
In its early years Subway was a theme franchise naming its sandwiches after well known Subway stops. This early history can still be seen in the BMT (Brooklyn-Manhattan Transit) sandwich Subway menus vary by store, by country and by market. These are considered COP (country optional program), SOP (store optional program), MOP (market only program) — in Muslim countries omitting ham and other pork cold cuts — but retain core items which are included at every store. The main food sold by the store is Submarine sandwiches, sold in Six-inch, Footlong sizes, and the new four inch "MiniSub" sandwiches for children as well as adults. All Subway stores offer customers lettuce, tomato, onions, capsicums, cucumbers, olives, jalapenos and pickles, as well as market selected options such as carrot and avocado. Like other fast-food restaurants they offer limited time offers or LTO from time to time. In addition to their standard menu, Subway also offers catering for all types of occasions. They offer "Giant Subs", which are a minimum of three feet long, and also offer a sandwich platter. These giant sandwiches can be ordered in bulk and to nearly any specification, something which Subway has promoted as a part of their campaign to personally tailor each and every sandwich to a customer's individual taste. Subway also offers items other than sandwiches; breakfast items include such baked goods as bagels, Egg & Sausage sandwiches, and as of July and August 2006, "personal pizzas" are available in select markets to their menu. The personal pizzas are made upon order (as with their sandwiches) and heated "in less than 90 seconds" (cooking for 85 seconds) as advertised on televised commercials. Breakfast and pizza items are only available in some stores. The Feast - History The New SUBWAY Feast was added to Menus across The United States and Canada on November 19th 2007. This particular sandwich had a unique origin. Created by the self proclaimed "Biggest SUBWAY fan of All-Time", Mike Sangiamo.
Subway Rewards Programs
Sub Club
For many years, Subway restaurants offered a customer rewards program called the "Sub Club". Customers would receive special stamps with the purchase of a sandwich, earning one stamp for a six-inch sandwich and two for a foot-long; small cards called "Sub Club Cards" were also provided for customers to paste the stamps onto and keep them collected in an orderly fashion. Originally, stamps were redeemable for a free standard sandwich (charges for extras such as double meat or extra cheese still applied) with no other purchase required—twelve stamps for a free six-inch, and twenty-four stamps for a free foot-long. A Sub Club for kids was also established, with one stamp earned for every children's Value Meal purchased, ultimately earning a free children's meal for eight stamps. Later, the regular Sub Club was altered to eight stamps earning a free six-inch, and sixteen stamps for a free foot-long, with the added condition that a 21 ounce or larger drink must be purchased to redeem the stamps.
In early June 2005, Subway announced that the popular customer rewards program would be phased out due to counterfeiting. Another reason, which was not stated by the company, for the discontinuation of the program was that there was a large amount of internal theft of stamps by Subway employees and affiliates, including the sale of rolls of the stamps online at places such as eBay. In the US, customers were able to get 40 cents per stamp during a phase-out period, but in the UK, staff were told to give out stamps until mid April 2006, and accept stamps until June 1st 2006, refusing them thereafter. In Australia, Sub Club stamps were no longer given out as of August 1, 2006. However, stamps were still redeemable until February 1, 2007. Each stamp gave the customer 50 cents off their purchase, with seven stamps receiving a free six-inch (along with the usual eight). Currently the Sub Club program is still in use in a few countries such as El Salvador, Germany, Taiwan and Finland.
The Subway Rewards Card Program
Customers can load and reload value onto their card to pay for their Subway restaurant purchases. They'll also earn Subway Rewards Points with every purchase - one Reward Point for every dollar spent on their favorite Subway sandwiches, salads and other menu items. Points can be redeemed for the following food items: 10 Points = 1 Cookie, 15 Points = 1 Bag of Chips, 20 Points = 21 oz. Drink, 35 Points = Mini Sub, 50 Points = Regular 6-inch Sub or Wrap, 75 Points = Regular Foot-Long Sub or Salad The Subway Rewards & Cash Card Program is optional on a market-by-market basis throughout U.S. and Canada.
Criticism
The 2001 book Fast Food Nation by Eric Schlosser criticizes Subway's franchising policies. It claims that in the 1990s, Subway was involved in many legal disputes with franchisees, usually over encroachment (overly aggressive expansion, in which two restaurants are so close in location that they end up competing with one another). The book blames the "Development Agents" who are given the task of growing the company regionally. They retain a percentage of the franchise fee for their local area, and so it is in their best interest to saturate markets with Subway restaurants in a region, despite the effect it will have on that region's Subway locations. Although this may lead to lower profits per Subway location, it leads to overall higher profits in the region, and therefore higher profits for the entire chain and the Development Agent. On June 26, 2007 KNXV-TV with the help of the Arizona Department of Weights and Measures, reported that Subway's 3-foot sandwiches were only 2' 8.25" (82 cm) long and another sandwich from Subway was only 2' 8.25" (82 cm) long. According to the Arizona Department of Weights and Measures, the minimum length of Subway's 3-foot sub should be 34.92" (88.7 cm) to meet state regulations. Upon further study, the report showed that the box designed to store Subway's 3-foot sandwiches were only 2' 10.75" (88.25 cm) in length; shorter than the maximum allowable variance. In response to the report, Subway stated that they are currently in the process of reevaluating their advertising, promotional, training and packaging materials with regard to the specific or implied length of Giant Subs and are taking steps to advise their franchisees to only discuss with customers the approximate number of expected servings and not a specific length of measurement.[9]
See also
References
- ^ a b Subway publication (2007). SUBWAY® Chain Facts. Subway Restaurants. Retrieved on 2007-09-23.
- ^ Joe Bramhall. McDonald's Corporation. Hoovers.com. Retrieved on 2007-08-23.
- ^ Joe Bramhall. YUM! Brands, Inc.. Hoovers.com. Retrieved on 2007-08-23.
- ^ UK, Subway. About Us. Retrieved on 2007-09-21.
- ^ http://www.manchestereveningnews.co.uk/news/s/1012/1012707_Subway_goes_halal.html
- ^ [1]
- ^ [2]
- ^ [3]
- ^ Ducey, Joe. Sub-Standard. Retrieved on 2007-07-10.
Further reading
- Wikinews. "Subway sacks New Zealand worker for sharing free drink; lays theft charges", Wikinews, 2007-05-08.
