World of Franchising - SUBWAY & NAASF

A discussion of issues affecting franchisee operators in the Subway franchise system and how the system may be improved. If you have any comments and wish to contribute to this web page; feel free to email the author.

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Location: Canada

My background is in Research and Development (Science) as well as Economic Development (Business). Currently managing my own businesses. My degree; B.Comm, Finance Major.

Sunday, April 24, 2005

What do Subway and McDonalds have in common?

Sure, they are both large players in the QSR industry. McDonalds leads the hamburger QSR while Subway leads the Submarine sandwich sector. Other than that nothing is similar? After all, Subway is the healthy choice while McDonalds is not.

I was watching the show “Super Size Me” the other week. You know the one where this guy eats nothing but McDonald food for a couple of weeks and gets ill from the experience.

It got me to thinking what we do in Subway. Our staff is trained to ask, “On a foot long, extra cheese, double meat, bacon”? We don’t say will that be super sized? But the message is the same. If they do not then we get marked out of compliance and penalized for not up selling to the customer.

In this age where so many people are having difficulty in eating properly would in not be nice if there was one place where they were not tricked into eating more than they should? Maybe I should say they are not being tricked into eating too much as much as coerced. For example; the price of a foot long sub is less than 50% more than for a six inch sandwich. You get twice the amount of food for paying about 40% more, in most cases!

My recommendation:

1. Charge extra for extra items so that profits are maximized and temptation for excess on behalf of the customer is reduced.

2. Do not offer a foot long sandwich for less than the equivalent 2 six inch units.

3. Do a better job of promoting salads with low fat dressings.

4. Offer a Meal Deal with a reasonable discount.

5. Do not offer a toy with Kids Packs. Keep the cost low to encourage more kids to visit.

6. Seriously review the breakfast menu by offering a product which the customer wants.

7. Eliminate the drive through.

Some of the above have nothing to do with over sizing the customer’s waist but will improve the satisfaction of the customer while generating reasonable profits.

Item 1 is a no brainer but we still offer the customer a selection of add ones which are not available at any other business. It makes it difficult to control costs and also makes the modest buyer feel like he is supporting the eating habits of the indulgent ones.

Item 2 is supposed to encourage sales by up-selling the customer. Rather, why not eliminate the foot long items on the menu board. It will help simplify a very confusing display of choices by about 40%. In addition there will be less discrepancy between rural and urban stores. Urban stores tend to sell more six inch sandwiches. As such food cost will be more equitable and comparable between different locations.

Item 3 should be obvious to allow the person who wants to eat healthy a choice. It is sad to note that the salad program which we rolled out last year was an abysmal failure. What is even sadder is that our person responsible for this failure received an award for excellence!

Kids should be encouraged to visit more often. Offer them a toy at a price if they want one. However, with a selection of only four toys are we saying expect you to come to Subway only four times in six, or so, weeks? Get rid of the included toy and keep the price down. Mom will be real happy.

We do not have a real breakfast menu. We really need one.

Subway prides itself on making the sandwich in front of the customer. You can not do that in a drive through. In addition, you will need more staff and also have to invest more in capital assets and maintenance. If an owner wants one let him have one but don’t coerce them into installing a drive through.

Well that is about all for today.

Take care.


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