Industry News | September 25, 2008

Subway to Open School Locations in Scotland

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News outlets reported Tuesday that Subway locations will be opening in as many as six schools in Scotland in the near future. If the test is successful, the East Renfrewshire council would look into purchasing franchise rights from the sub company.

“We’ve been working on the school thing for over a decade,” says Les Winograd, a spokesman for Subway. “It’s primarily domestically. We have about 50 or so locations inside schools and about eight of them are in international markets.”

Although certain school systems in Texas, Alaska, and Virginia are already offering students easy access to the brand, initial reports of Subway’s expansion in the U.K. are latent with skepticism. Issues ranging from the calories and salt content in the sandwiches to the unnecessary peer pressure on students who couldn’t afford to buy the sandwiches remain points of contention.

If the proposed expansion is like anything Subway’s experienced in U.S. schools, however, those problems won’t be enough to break the deal. According to Winograd the domestic school locations have been received very well by both U.S. parents and children and often help the school foodservice staff carry the burden of the lunchtime rush. “There’s a lot of advantages like keeping the kinds on campus and encouraging the kids to eat healthier,” he says of Subway’s presence in schools.

Subway allows schools to pick and choose the menu available to students. “Because there are regulations and requirements that differ from town to town, some school districts can serve certain items that others can’t,” Winograd says. “So we allow schools to choose what they want to sell, which further reduces their costs.”

To make the partnership even more enticing to school systems, Subway waives its franchising fee for arrangements where the school acts as a franchisee. The other scenario is for the school to act as a landlord, allowing a franchisee to rent space in the cafeteria for a monthly fee or percentage of receipts. “We’re very flexible with schools … We basically put the location in whatever spot they have available,” he says.

Wahid Sadiq, a Subway managing director in the west of Scotland, told Forbes.com that the partnership acts as a stepping stone for the brand’s farther expansion into the region in the future.

“Subway is getting quite a good reputation over there,” Winograd says. “Subway has about 1,200 locations in the U.K. alone, and we’re one of the fastest growing brands there. I’m sure part of that is due to the fact that we offer options that are low in fat and calories.”

--Blair Chancey