Fast food restaurant chains are essentially modeled on facility of expansion; the concept of franchising has expanded hundreds of restaurant chains worldwide as corporations have made expansion as simple and cheap as possible. However, a hierarchy of facility still remains, and Subway’s stance as the largest chain in the world places it staunchly at the top of the list of easiest restaurants to expand.
From the bare bones layout, Subway franchises are simple–an oven, fridge and a counter are all that are needed for the sandwich chain. McDonald’s, on the other hand, requires a full kitchen, many more employees, and more likely than not, space for a drive-thru. Yet the numbers prove this as well: McDonald’s franchises cost, on average, over $1 million to start while Subway franchises require less than half of that.
Globally, Subway’s menu lends itself to easy expansion as well. Don Fertman, Subway’s director of development, cites many options as key to the globalization of the brand. The first is a local menu option which the corporation provides to franchisees; essentially, if local consumers want it and it’s doable within the Subway kitchen, headquarters gives the franchise the go-ahead to experiment. Fertman has seen quite intriguing combinations; in Japan, for example, restaurant-goers seem to favor a pastrami and potato salad combo that does not exist in domestic US locations.
Fertman also notes Subway’s approach to franchising: rather than search for master franchisees, individuals who can run tens or hundreds of stores, Subway has shifted to a search for local entrepreneurs and developers. Fertman states:
“We like to have people from the country who are going to be either hands-on owner/operators for the franchise business or development agents, where that is their only business and they have the focus on the Subway business as opposed to a larger corporation.”
This spirit is not necessarily reflected in the required hoops to jump through to open a McDonald’s franchise. By lowering costs, keeping menu options adaptable and open, and initiating a search for local, individual franchisees, Subway has been able to take over McDonald’s as the world’s largest chain with a focus on facility of expansion.