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A Message From the President & Founder

Hello - Welcome to the SUBWAY® Franchise


At the SUBWAY® world headquarters we take pride in offering you access to one of the most reasonable, well-structured,
restaurant franchise programs available. Our concept is to keep your investment low, the operation simple and to offer customers
delicious fast food that is often healthier than many products offered by other fast food restaurants. In fact we have been voted,
by customers, the #1 submarine sandwich choice in Restaurants & Institutions magazine five times! This concept has propelled
the SUBWAY® franchise to become the largest among sandwiches and salads and the second largest fast food franchise in the
world. The company’s initiative and flexibility has made it possible for many entrepreneurs to open SUBWAY® restaurants in
locations that many other franchisors would not, or could not, consider. Our restaurants can now be found at airports, business &
industry, military bases, hospitals, truck stops, colleges & universities, convenience stores and major sporting facilities, to give
some examples.

Quality drives our success. A systematic franchising program gives you access to the know-how and expertise that comes
from more than 33 years of experience, plus the potential for growth with a world leader. We offer our customers value, quick
service, and a variety of nutritious, great tasting sandwiches. As a result of our quality operations, the SUBWAY® system has added
over 11,000 stores in the last eleven years, and has been ranked the #1 franchise by Entrepreneur magazine eight times.

SUBWAY® restaurants are open and operating in over 65 countries. Some of these countries include: Australia, Canada,
China, Costa Rica, Cyprus, the Dominican Republic, El Salvador, England, Greece, Honduras, Iceland, Indonesia, Ireland, Israel,
Japan, Mexico, New Zealand, the Philippines, Portugal, Spain, Switzerland, Taiwan, Turkey, the United States and Venezuela, and
we open in several new countries each year. As the international market expands, we look forward to continued growth in new
countries including those in Europe, Asia, Africa, and South America.

To find out more about the opportunities that are currently available, please fill out the enclosed form(s) and return
them promptly. We look forward to hearing from you soon!

Frederick A. DeLuca
President and Founder

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•All About Us
•Investment

About Our Franchise Our start up costs are exceptionally low for a franchise of
How We Started our size and stature. You can often purchase dependable brand
Fred DeLuca, the co-founder of Subway Sandwiches and name restaurant equipment at reasonable prices through our
Salads®, was a 17 year old high school graduate with a goal of purchasing power. As leasehold improvements are only a small
going to college and one day becoming a doctor. Fred asked a portion of the total capital requirements, you are not putting a lot
family friend, Dr. Peter Buck, a nuclear physicist, for some of valuable cash into non-recoverable fixed assets.
advice on how to raise money to pay his tuition. It seems that Also, take note that most stores are only 500-1,500 square
Dr. Buck had seen a successful submarine sandwich shop in his feet (50-150 square meters) in size, and may be opened in a
home state of Maine and thought it would make a great venture wide variety of building styles. The small amount of space
for this enthusiastic young student. In August 1965 Dr. Buck required to open a SUBWAY® unit reduces your overhead costs.
loaned Fred $1,000 to open his first unit in Bridgeport,
Connecticut which sold freshly made footlong sandwiches. Financing
As part of their business plan, a goal was set to open 32 An important consideration in purchasing your first
stores in the first ten years of operation. In 1974, only 16 stores SUBWAY® store is how to finance your investment. A good
were open. How would they reach their goal? Fred’s solution? arrangement is to have 50% of the total capital requirements
Franchising. Why not get other people involved in this oppor- available in cash and sufficient collateral to obtain funding for
tunity. Fred and Pete hit their goal of 32 stores the following the balance. Your Development Agent or Regional Manager
year, right on schedule and proceeded to set a new goal: can provide guidance in selecting a qualified financing source.
Target 200.
As they reached the 200 store mark, Fred announced his
latest and most ambitious goal: 5,000 stores open and operating Equipment Leasing*
by 1994, a goal which was reached and exceeded by 1990! In addition to providing guidance to potential franchise
Today the SUBWAY® franchise has over 13,500 units open with owners in securing financing for a SUBWAY® restaurant, we
no sign of slowing. We have virtually written franchise history make available to franchisees an equipment leasing program.
with the incredible feat of opening over 11,000 stores in the past Please note that capital requirements for major equipment can
eleven years. be reduced by taking advantage of the equipment leasing
program.
*Equipment leasing is presently only available in the U.S., Canada, Guam and
Member: International Franchise Association Australia.
As a member of the International Franchise
Association, the SUBWAY® franchise supports the Royalties and Fees
IFA’s Code of Ethics, which details standards of
fairness and ethical conduct for franchisors. The Royalties and fees are based on gross sales minus sales tax.
SUBWAY® franchise is also a member of the Canadian The royalty is 8% to the company. A 3.5% advertising fee is
Franchise Association, the National Restaurant Association and paid to the Subway Franchise Advertising Fund Trust, also
other franchise associations around the globe. known as SFAFT. Franchisees in some markets may vote
to increase the marketing fee percentage for local advertising
purposes.
Customer Recognition

76
In franchising, widespread customer recognition of a trade
name and logo is the equivalent of goodwill. The SUBWAY®
name and logo are well recognized and respected, and our
TM
recognition continues to grow as we open several new countries
each year.
subs
under
grams
of fat
Initial Investment The 7 subs under 6 grams of fat logo is currently being used in the United States. As well, a
Your total initial investment will depend on many factors. similar logo is being used in Canada. Although the above claim is currently valid only in the
United States, it is a good example of the kind of promotions the SUBWAY ® system uses to
Some of those factors include: location, rent, size of unit, emphasize the healthier quality of many of our sandwiches over greasy fast food.
Regular 6” Subway Club (5g of fat), Roasted Chicken Breast (6g), Ham (5g), Roast Beef (5g),
and equipment. An estimate of total cost to open a franchise Veggie Delite (3g), Turkey Breast & Ham (5g), and Turkey Breast (4g) prepared according to
including the franchise fee can be found in the back of this standard recipes with Italian or wheat bread, meat, onions, lettuce, tomatoes, pickles, green
peppers, and olives, and without cheese or condiments (e.g., mayonnaise). Customer
brochure. The franchise agreement is for 20 years and requests to modify standard sandwich recipes or add cheese or condiments may increase
renewable for 20 years. fat or calorie content.

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•Investment
•Menu
•Support
High Reinvestment Menu
We are extremely proud that more than half of all new Sandwiches and Salads
franchises are awarded to existing owners who are expanding. The basic menu offers a variety of cold and hot submarine
sandwiches (made with Italian or wheat bread), deli style sand-
wiches and salads. There are 10 cold and 5 hot sandwiches, 5
Potential Market deli style sandwiches, 3 super sandwiches, Kids’ Pak® meals (a
We feel it is important to gain as much market share as pos- deli style sandwich, cookie, small drink and a premium) and a
sible. Our mission is to equal or exceed the number of outlets variety of salads all of which are considered mandatory.
operated by their largest fast food company in every market that However, internationally, cultural variances may prohibit offer-
we enter. Since McDonald’s® is the largest fast food company ing certain menu items within a particular country. The deli
in the world and the largest in most individual markets, it is style sandwiches are a mandatory value menu item, although
useful to use their distribution and growth as a benchmark. they are not required upon the initial opening of the first store in
McDonald’s® currently operates over 23,000 outlets in 109 a new country. At their option, any franchisee may offer a total
countries, and they are currently projecting the addition of over of 6 local items on their menu: 2 cold and/or 2 hot submarine
2,000 units per year to their chain.* With our system and oper- sandwiches, 1 salad, and 1 deli style sandwich.
ational strengths, low capital requirements, simple operation
and low overhead, as well as a dedicated field and headquarters
staff, there is reason to believe the SUBWAY® franchise will
Beverages and Snacks
continue to grow as a dominant force in the world market. Besides the approved fountain beverages described in the
*Source: 1997 McDonald’s® Annual Report Operations Manual, owners are able to carry additional drink
selections dispensed through the soda unit. In addition owners
may choose to participate in the Optional Bottled Beverage
Profit Potential Program. Fresh baked cookies and chips are required and a
The potential sales and profitability of a SUBWAY® local baked goods dessert item may be added.
restaurant is naturally of major interest to any prospective
franchisee. To determine this information, we encourage you to
contact as many existing owners as you wish and question them
Optional Programs
on how they are doing. We will provide you with the name and Optional programs include a catering program, a breakfast
phone number of any franchise owner that we have operating program, a soup program, a smoothie program and a new age
around the world, after you complete and return the application. bottled beverage program (juices, waters and teas). SUBWAY®
We have a policy that no employee of the company can also offers a new exciting opportunity to co-brand with “TCBY”
provide you with projections as to your potential sales, earnings Frozen Yogurt® and mamma ilardo’s® EXPRESS PIZZA.
and profitability. This policy eliminates possible misunder-
standings and leads to a better long-term relationship. Bread Baking
Of course, it is not mandatory To achieve quality, freshness and uniformity throughout
for franchisees to provide exact the franchise, SUBWAY® franchisees bake bread in stores.
figures, but most of them are SUBWAY® owners take pride in giving their customers the
willing to give you a good idea freshest product possible, and the appealing aroma of bread
Growth of how they are doing and state
if they are satisfied with their
baking is a power in-store
sales tool. The procedure
SUBWAY® franchise. for baking bread is simple and
easy to fit into the schedule of
any store. Our bread products
come frozen in pre-formed
sticks and rounds. Baking is
continuous, producing
finished product about every
four hours.

Left: The SUBWAY®


13,000+

franchise has opened


12,516

Left: Fresh bread baking occurs


2,888

5,144

7,327

9,893

over 11,000 stores in


throughout the day at every
the past 11 years.
SUBWAY® location in the world.
1988

1992

1994

1996

1998
1990

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•Support

Efficient Set Up Owner Input


The set up of a SUBWAY franchise has been fine tuned to
®
The company is interested in receiving input from
promote efficiency and simplicity. Most of the business day franchisees, and supports the SUBWAY® Franchise Owners
centers on the refrigerated sandwich unit which holds the meats Advisory Council (SFOAC) to improve communications
and vegetables needed for product preparation. Meats are between franchisees and the headquarters staff. The Council is
received in bulk or pre-sliced form. Pre-sliced saves labor and comprised of franchisees who bring suggestions for improve-
product costs and makes the operation even more efficient. The ment and change to the attention of the company.
form of meat set up you have will depend on your individual
market.

Field Support
Development Agents & Regional Managers
The SUBWAY® franchise has over 150 Development
Agents (DA) and Regional Managers (RM) each of whom cov- A beautiful mall location in Connecticut, USA
ers a specific region. These representatives offer local
assistance with site evaluation, design and construction. The Headquarters Support
DA/RM is the site representative during each store’s initial Research and Development
opening. Periodic store evaluations are also performed by the The Research and Development Department works with
DA/RM. For some international locations there may still be DA approved vendors, testing and developing new food items, paper
positions available. Call your Sales Manager for more details. products, and equipment. The company will provide guidance
(See page 7.) in sourcing distributors for food and products in the area.

Site Selection Store Design


It is recommended that after training is completed, The company provides custom floor plans for decor and
franchisees should begin the site location process. Sites range equipment placement at no additional charge. SUBWAY® stores
from 500 to 1,500 square feet (50-150 square meters), with sites are designed to meet several objectives, including the ability to:
averaging 1,000 square feet. A location should be situated to • Enhance the SUBWAY® image
take advantage of nearby residential and business communities. • Present the products and services to their best advantage
All sites must be approved by DA/RM. The franchisee, with the • Facilitate easy maintenance
assistance of the DA/RM and the home office Leasing • Conserve energy, both economically and physically
Department, negotiates the economics of the lease with the • Provide proper customer flow
landlord. The objective is to secure the best possible location at • Increase efficiency
a reasonable rent. The design you receive will automatically take the above
factors into account and will be based on the information your
Store Designer receives from you and/or your DA/RM. The
information provided to the Store Design Department will
include questionnaires and a completely dimensioned drawing of
the SUBWAY® location.

Equipment
You will work with your DA/RM to determine the equip-
ment and decor needs of your store based on the floor plan
provided.
Once the equipment list is complete and has been approved
by your DA/RM, your Construction Assistant will verify prices
and determine the total cost of your equipment and decor
package.

Customers line up outside of an Iceland store

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•Support
•Advertising
•Insurance Programs
A beautiful location in Ankorage Alaska, U.S.A.

Training Local Advertising Markets


An understanding of what it takes to open and operate a Each SUBWAY® store belongs to a local SFAFT market
SUBWAY® restaurant is important. Our intensive two week which elects an Ad Rep. or Local FAF board,
training program in Milford, Connecticut U.S.A., Costa Rica, depending on the number of stores
and Australia covers the fundamentals of establishing and in the market. Every owner
operating a SUBWAY® store. The Training program is split has access to an Ad
between one week of classroom and one week of in-store Advisor to answer
instruction. Further education is provided via periodic questions about
newsletters and videos to all franchise owners which provide advertising
useful operations, marketing, and advertising information and materials and
updates. Also available is an optional five day course for promotions.
store managers.

Local Store Marketing & Promotions


Our Local Store Marketing and Promotions Department
works with our DA’s/RM’s and individual franchisees. They TV Advertising***
assist individual stores with the development and implementation In 1997, SFAFT launched a national advertising campaign
of a marketing plan to increase awareness in the local community. promoting the honest, wholesome and lower-in-fat products
sold in SUBWAY® restaurants.
***National television advertising is currently in progress only in the
Public & Community Relations United States and Canada. Please consult with SFAFT about adver-
SUBWAY® headquarters and franchisees donate millions of tising in your specific market.
sandwiches every year. They also provide disaster relief and
donate to and support many charitable organizations. Insurance Programs
Gold Standard
Headquarters has negotiated with top rated insurance
carriers as part of our Gold Standard Insurance Program which
provides tailor made protection for SUBWAY® owners. The
program offers one of the most comprehensive packages
available, covering workers compensation and liability
Advertising** insurance at competitive prices.
SFAFT
Advertising plays a role in the marketing of almost every Health Insurance
business, and the SUBWAY® franchise system is no exception. The SUBWAY® system continually searches for the best
As an owner, you will need to spend a portion of your gross possible coverage at a reasonable cost. We now have various
receipts to promote your own store. In addition to your person- companies writing health insurance packages in the U.S. Each
al efforts to increase sales, all franchisees contribute a percent- offers programs that can be tailored to the individual franchisee.
age of weekly store sales to the Subway Franchisee Advertising
Fund Trust (SFAFT).
**The advertising program may be structured differently in your country
depending on local regulations. All programs are subject to change.

Systemwide Planning
SFAFT operates for the advertising benefit of all
SUBWAY® restaurant owners. Systemwide promotions, media
plans and professional materials are developed and implement-
ed by SFAFT with assistance from the national ad agency to
promote SUBWAY® restaurants and their quality products to
millions of consumers around the world.
This volunteer board is elected by owners in an annual
election and meets regularly to review and provide input on
marketing strategy developed by the Marketing Director and
advertising agency. Customers line up for sandwiches at this store in Saudi Arabia

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•Summing Up
•Your Next Steps
•About Franchising
Summing up the Franchise Program Step 3
The Franchisee is Responsible For: Review the disclosure document with a financial advisor or
• Franchise fee attorney. If at all possible, it is strongly suggested that you visit
• Leasehold improvements the existing units closest to you. We also encourage a tour of
• Leasing or purchasing equipment our modern world headquarters facilities, and if you finalize the
• Hiring employees and operating the store purchase of your first franchise while here, we agree to credit
• Paying 8% royalty to company (weekly) the round trip transportation to your account. Certain
• Paying 3.5% advertising fee (weekly) restrictions do apply. (Not valid at time of training.)
• Paying additional advertising fee if your market elects to
participate in the program If you have additional questions:
In the United States and Canada Call
Toll Free: 1-800-888-4848
In Australia Call
Toll Free: 1-800-630-355
In New Zealand
Toll Free: 0-800-444-618
From other countries feel free to call one of our experienced
Regional Sales Managers.
• South & Central America/South Africa: 1-203-876-6620
• Asia/Pacific: 1-203-876-6621
• Europe: 1-203-876-6622
This beautiful SUBWAY® restaurant in Beijing, China is • Africa/Middle East: 1-203-876-6628
one of 700 plus locations outside of North America All Areas: 1-203-877-4281
Fax: 1-203-876-6688
Company Provides: Email: franchise@subway.com
• Access to product formulas & operational systems site Web Site: http://www.subway.com
evaluation
• Training program Investigating Franchising
• Operations Manual
Franchising Does Work
• Representative on-site during opening Franchising is one of the most effective systems for distrib-
• Periodic evaluations and ongoing support ution of goods and services known today. It combines the
• Informative publications entrepreneurial drive and ambition of the small business man
• Marketing and advertising support with the experience and expertise of a larger company. The
result is often a rewarding partnership for both parties.
Your Next Steps As a franchise owner, you are given access to years of busi-
Step 1 ness experience without attending the school of “hard knock.”
After you have finished reading the enclosed material You sell a product that has been well accepted in many markets
thoroughly, complete the enclosed application and mail it to our or as a brand name with which people are already familiar. The
headquarters in envelope provided. Filling out an application operation and control of your business has been established,
does not obligate you to purchase a franchise. Upon receipt, assisting you in running the business.
we will send you a disclosure document which includes even In contrast to purchasing an independent business, buying a
more specific information on our company. You can also fill franchise is an investment not only in your store, but in the
out the application on-line. franchising company as well. If the chain expands, your indi-
Note: Many areas are presently limited for new development. Your Office vidual business may build greater equity. Government statistics
will be able to provide information on current and future availabilities. You
show the failure rates of franchises are significantly lower than
can also check our web site at www.subway.com to view our list of stores
currently for sale. those of individuals starting a new business on their own.
When you purchase a franchise you are joining a team. The
members of that team have mutual goals. Together they work to
Step 2 build the company’s sales image, and reduce the common
In order to finalize your decision, talk to others - current expenses. As a member of the team, you can increase your
franchise owner, the Better Business Bureau, the International knowledge of site selection, lease negotiations and store
Franchise Association office, the Association of Canadian construction. Years of experience are needed to become
Franchisors office, and outsiders who will provide you with proficient in these areas.
facts and figures.
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•About Franchising
•Our Owners

Today, franchises are under stringent laws which protect the Pete Patel
prospect’s interest. However, be sure you do your homework Los Angeles, CA USA
before making a final decision. I had just graduated from
college when I got involved with
Franchisee Success Stories SUBWAY®. My career plan was
Peter Aucoin to take over the family hotel/motel
Webster, MA USA business. We wanted to incorporate
After more than twenty years of restaurant and catering services
working in the field of advertising into our business and I knew there
and marketing I wanted a change so was a lot to learn about the industry.
I decided to take “word of mouth We decided that the best education
advertising” literally - I opened a would be to own and operate our own restaurant and we
SUBWAY® restaurant. SUBWAY® wanted to go with a leader so we chose SUBWAY®.
has a great product and my I did a lot of homework before opening my business -
customers just love the variety and that was a key to my success. I researched the company,
of our menu. talked to other franchisees and listened to the ideas shared by
The new focus on advertising and marketing the low fat others.
message and the value of our famous footlongs is terrific. I learned a lot from the other franchisees in the system
Customers are now thinking of SUBWAY® first and that is and from the support I was given from the corporation. The
good news. success I had with the first restaurant prompted me to purchase
SUBWAY® gives customers what they want-choices and two more franchises and at the age of 23 I was a multi-unit
we do that in a good clean environment. I was always very owner with the world’s second largest restaurant chain - It was
impressed with the level of quality products and service that amazing.
SUBWAY® franchisees provided and I wanted to be a part of The proven systems in SUBWAY® helped me make the
theat. My only regret - I should have done it years ago! right choices and take the right steps along the way. There is
a unique support system available to franchisees - from the
opening of the first store right through the purchase of
Tharita Jones
additional locations,
Tulsa, OK USA I am so happy with my SUBWAY® restaurants that I
I began my SUBWAY® career
as office manager for the develop- decided to focus solely on them.
ment office in Tulsa. I was working
hard to raise a family, keep a roof
over our heads and pay my bills.
After three years my Development
Agent asked me if I was ready to
take on the challenge of owning
my own SUBWAY®. I said Yes!
It was certainly going to be a challenge balancing my time
between work and home but I was ready for it. I knew that
SUBWAY® had a great training program and support that
would help me develop my business.
It was the systems that are in place that helped lead me to
my first success with SUBWAY®. The on going training I
have received has helped me move on to open my own conve-
nience store with a SUBWAY® restaurant in it just a mile from
where I had grown up.
I am now in a partnership with my DA to open more We also have more than 2,500 non-traditional locations
SUBWAY® restaurants and convenience stores in my area. worldwide. Please call our headquarters for more information.
Thanks to SUBWAY® what once seemed like a far off dream is
now a reality.

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•Menu
•More Info

This is an example of the 1998 U.S.A. Menu

Thank you for your interest in the SUBWAY® franchise. Please take the time to fill out and return the
application(s) in the pocket located at the right (no obligation). We will then send you more detailed
information and be able to put you in touch with a Development Agent or Area Representative. So fill out
and return your application today. Also, feel free to contact one of our Sales Managers if you have any
questions at 1-203-877-4281 or toll free 1-800-888-4848 in the U.S. and Canada.
Doctor’s Associates Inc. is the franchisor and is located at 3000 NE 30th Place Suite #207, Ft. Lauderdale, FL 33306. SUBWAY® is a registered
trademark of Doctor’s Associates Inc. Doctor’s Associates Inc. has licensed use of the mark to Subway Franchise Systems of Canada, Ltd., Subway
Systems Australia Pty Ltd., and Subway Partners, C.V., affiliates that offer and sell the SUBWAY® franchise outside of the United States of America. NY
Residents: “This advertisement is not an offering. An offering can only be made by a prospectus filed first by the Department of Law of the State of New
York. Such filing does not constitute approval by the Department of Law.”

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