Industry News | January 21, 2003

Subway Restaurants Named Number One Franchise

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The Subway restaurant chain has been named the number one franchise opportunity for 2003 by Entrepreneur Magazine in its 24th annual Franchise 500 rankings.

According to Entrepreneur, the Franchise 500 rankings are the most comprehensive franchise rankings in the world.

"Being part of a winning team is instrumental towards the success of any organization on or off the field. Being number one in the Franchise 500 is like winning the Super Bowl. But instead of two teams competing, Subway competed against thousands of teams," comments Subway franchisee and former Arizona Cardinals Defensive Tackle, Jerry Drake.

The team effort factors largely into the company's success. Everyone is working hard; working together as a team to improve the organization. It's not really me running the company so much as a whole team all rowing together to move things in the right direction," says Fred DeLuca, president and co-founder of Subway Restaurants.

According to the International Franchise Association, most analysts estimate that franchising companies and their franchisees accounted for $1 trillion in annual U.S. retail sales from 320,000 franchised small businesses in 75 industries.

Nichole Torres of Entrepreneur Magazine writes, "As I consider that the Subway organization has managed to build the largest fast-food franchise in the United States while still keeping the company entrepreneurial, I am in awe."

According to the article in the January 2003 issue of Entrepreneur Magazine, the past few years of the Subway chain's history have been hugely successful. Not only is the chain the sandwich segment leader, and has been for many years, but its average unit sales volume growth rate of approximately 40%, over the past three years, is well above growth rates of the leading fast-food companies.

"In the past few years, we've dramatically improved our food, advertising and internal systems. Our gains have been building nicely and we're still far ahead of the rest of the fast food industry," continues DeLuca.

Additionally, franchise sales have been impressive as the Subway chain's reputation as a dominant player in the fast-food industry spreads.

"We're doing incredibly well. In 2001, the number of franchise leads we received increased by 75 percent. This year, it grew by another 40 to 50 percent. Back when we first started, people didn't even know what a submarine sandwich was. Now that we have a product that is sold around the world, it's amazing to see how many people contact us every week now for franchise information," adds DeLuca.

"The appeal of a Subway franchise is universal -- with low investment, a simple operation, and unparalleled support for the franchisees," says Don Fertman, director of franchise sales.

According to DeLuca, "We have a very simple approach to business. What's really great about our team is that they keep analyzing the market, they do a lot of research and testing and stay focused for the benefit of all our franchise owners."