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Thoughts On A Giant Of Sandwiches

Sometimes I wonder, how does Subway do it?

I’ve known about them for about 20 years. In that span of time, they’ve expanded exponentially. They’re everywhere, and I don’t just mean everywhere in the US. They seem to be everywhere in the world. It seems that the demand for a simple, affordable sandwich really is universal.

So I was amazed to read that Fred DeLuca, founder of Subway, has plans to open another 5,000-7,000 more outlets before finally admitting that the sandwich giant has reached market capacity. QSR magazine recently sat down with DeLuca for a candid discussion on the past, present and future of the franchise and it really seems that there is no stopping Subway.

It was 1965 when Subway first started, as a sub shop called Pete’s Super Submarines. DeLuca was only 17 at the time, but he had franchising in his DNA. He hoped to open “32 outlets in 10 years”. He didn’t reach that goal, but he has achieved just about everyone subsequently.

The challenge for Subway, both for franchisees and for franchisors, is, to borrow the old Budweiser express, to know when to say when. Subway’s units are in just about every town in the world, and so far everyone is benefitting from some such market concentration. This was evident when Subway’s breakfast menu succeeded despite initial anxieties from some franchisees.

“The sandwich category is doing better than most sectors, and it’s hard to tell if Subway is benefitting from that or driving it,” David Henkes, vice president of the research firm Technomic Inc, told QSR.

Either way, Subway isn't complaining. And who can question Subway’s strategy? Everyone in the organization seems to benefit from its interest in expansion. It’s interesting to see DeLuca advocating new food franchises, selling Mexican food and pizza. We’ll be watching their evolution. But for the now, and for the near future, they're going to be hard to stop.

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