Subway (restaurant)

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Doctor's Associates, Inc.
Type	Private
Founded	Bridgeport, Connecticut, USA (1965)
Founder	Fred De Luca and Dr. Peter Buck
Headquarters	Milford, Connecticut, USA
Key people	Fred De Luca (President) Millie Shinn (EVP) David Worroll (Controller)
Industry	Fast Food
Products	Sandwiches Salads Pizzas Other food products
Revenue	▲ $9.05 billion USD (2006)
Employees	167,823 (2003)[citation needed]
Website	Subway.com

Subway is a franchise fast food restaurant that primarily sells sandwiches and salads. It is owned by Doctor's Associates, Inc. (DAI), and has over 29,045 franchised units in 86 countries as of March 2008 and is the fastest growing franchise in the world.^[1] Currently, Subway is the third largest fast food chain globally after Yum! Brands (34,000 locations) and McDonald's (31,000 locations).^[1][2][3]

Subway's main operations office is in Milford, Connecticut, and five regional centers support Subway's growing international operations. The regional offices for the European stores is located in Amsterdam, Netherlands. Australia and New Zealand, is supported from Brisbane, Australia, the Middle Eastern locations are supported from offices located in Beirut, Lebanon, the Asian locations from Singapore, and the Latin America support center is in Miami, Florida. In the UK and Ireland the company hopes to expand to 2,010 restaurants by the year 2010.^[4]

Many restaurant analysts attribute Subway's fast growth to the growing concern on health by restaurant customers, a trend that Subway has taken advantage of in its marketing. In 1999, an Indiana University student named Jared Fogle lost 245 pounds (110 kg) with a diet made up mostly of Subway sandwiches combined with exercise. The story is used by Subway as a large part of their marketing campaign to this day. Jared has emerged as a spokesman for Subway, furthering their image as a health-conscious restaurant chain.

Contents 1 Doctor's Associates 2 History 3 Products 4 Advertising 4.1 Sub Club 4.2 Sponsorship 5 Controversies 5.1 Criticism 5.2 Franchise relations 6 Global locations 7 References 8 Further reading 9 External links

[edit] Doctor's Associates

Doctor's Associates was founded by Fred De Luca and Peter Buck, Ph.D. in 1965,^[5] with the sole purpose of overseeing the Subway chain of restaurants. Buck was a scientist with a doctoral degree, and Fred DeLuca had aspirations of becoming a medical doctor, hence their choice of the name "Doctor's Associates." The company has nothing to do with any medical organization^[6].

[edit] History

Fred De Luca borrowed $1,000 from family friend Peter Buck to start his first sandwich shop in 1965, when he was only 17 years old. He was trying to raise money to pay for college. He chose a mediocre location for his shop, but by noon on the first day of the opening, customers were pouring in. On the radio advertisement they had promoted the name as "Pete's Submarines", which sounded like Pizza Marines, so they changed the name to "Pete's Subway"; eventually it was shortened to "Subway.", as it is known to this day. As of June 2nd, 2008, the company has 29,355 franchised locations in 86 countries and produces US$ 9.05 billion sales every year. In 2007, Forbes magazine named DeLuca number 242 of the 400 richest Americans with a net worth of 1.5 billion dollars.

In addition to traditional restaurants, Subway operates in many non-traditional locations. For instance, there are over 900 Subway locations inside of Wal-Mart stores and 200 on military bases, including several in Iraq, in addition to three located inside The Pentagon - as well as an increasing number on college and university campuses.

There is at least one adults-only Subway, located at Foxwoods Resort & Casino. It is accessible only after entering a gaming area which is restricted to guests 21 and over, but it also has a drive-thru.

Subway restaurants has been consistently ranked in Entrepreneur Magazine's Top 500 Franchises, and was selected as the #1 overall franchise in 2008. Additionally, it was ranked as the #1 "Fastest Growing Franchise", and the #1 "Global Franchise" as well.^[7][8][9]

[edit] Products

In 2000, Subway added seasoned breads and a line of specialty items to its menu. In 2003, most Subway markets switched their beverage contracts to supply Coca-Cola products exclusively, having previously had an exclusive contract with PepsiCo. In order to ink this deal, Coca-Cola helped pay for the initial rollout of toaster ovens to all existing restaurants in North America. Subway gave customers the option to have their sandwiches toasted in response to increased competition from rival sandwich chain Quiznos Sub, which popularized toasted sandwiches. In Australia, the introduction of Fresh Toasting enabled the Subway Franchise to prevent Quiznos from gaining market share. The Turbochef and Merrychef toaster ovens are a microwave and convection oven hybrid.

Subway menus vary by store, by country and by market. These are considered COP (country optional program), SOP (store optional program), MOP (market only program) — in Muslim countries omitting ham and other pork cold cuts — but retain core items which are included at every store. The main food sold by the store is Submarine sandwiches, sold in "Six-inch", "Footlong", and the new four inch "MiniSub" sizes. All Subway stores offer customers lettuce, tomato, onions, bell peppers, cucumbers, olives, jalapeños and pickles, as well as market selected options such as carrot, corn, radish and avocado. Like other fast-food restaurants they offer limited time offers or LTO from time to time. In addition to their standard menu, Subway also offers catering for all types of occasions. They offer "Giant Subs", which are a minimum of three feet long, and also offer a sandwich platter. These giant sandwiches can be ordered in bulk and to nearly any specification, something which Subway has promoted as a part of their campaign to tailor every sandwich to the individual customer's taste.

In 2006, the first kosher Subway restaurant in the United States opened in a suburb of Cleveland, Ohio. Fogle, who is Jewish, was in attendance at the opening. "With slight modifications, such as no pork-based products, and the use of soy-based cheese, the menu is virtually identical to that of any other Subway restaurant." ^[10]. Since then, kosher Subways have opened in New York, Los Angeles, Kansas City, and Baltimore^[11] and plans have been announced for Milwaukee, Boston, and one inside the JCC in West Bloomfield, Michigan, a suburb of Detroit.^[12] Some of these locations serve soy cheese, but most don't serve any form of cheese at all.

All Subway restaurants in Muslim countries serve a halal menu. There are also at least two Subway restaurants in the United States that do the same, and a growing number in the United Kingdom. The success of these stores has been mixed, but has resulted in plans to open more in certain areas.^[13]

Subway also offers items other than sandwiches; breakfast items include such baked goods as bagels, egg & sausage sandwiches, and as of July and August 2006, "personal pizzas" are available in select markets to their menu. The personal pizzas are made upon order (as with their sandwiches) and heated "in less than 90 seconds" (cooking for 85 seconds) as advertised on televised commercials. Breakfast and pizza items are only available in some stores.

In 2008, Subway began to offer Five Dollar ($5) Foot-long submarine sandwiches as a limited time only promotion. The fanatical response however, prompted Subway to make A Five Dollar ($5) Foot-long Everyday Value Menu that includes 8 footlong sandwiches; Spicy Italian, Cold Cut Combo, Tuna, BLT, Black Forest Ham, Meatball, Veggie Delite, & Oven Roasted Chicken as a permanent menu item.

[edit] Advertising

Subway uses the advertising slogan "Eat Fresh" to explain how every sandwich is made on freshly baked bread, using fresh ingredients, in front of the customer to their exact specification, by employees who Subway terms "Subway Sandwich Artists".

Beginning in November 2007, Subway's US commercials feature the Peter Griffin character from Family Guy in which he extols the virtues of its new Subway Feast sandwich.^[14] Subway has also used instant win competitions based on the game Scrabble as promotional tools.

[edit] Sub Club

For many years, Subway restaurants offered a customer rewards program called the "Sub Club". Customers would receive special stamps with the purchase of a sandwich, earning one stamp for a six-inch sandwich and two for a foot-long; small cards called "Sub Club Cards" were also provided for customers to paste the stamps onto and keep them collected in an orderly fashion. Originally, stamps were redeemable for a free standard sandwich (charges for extras such as double meat or extra cheese still applied) with no other purchase required—twelve stamps for a free six-inch, and twenty-four stamps for a free foot-long. A Sub Club for kids was also established, with one stamp earned for every children's Value Meal purchased, ultimately earning a free children's meal for eight stamps. Later, the regular Sub Club was altered to eight stamps earning a free six-inch, and sixteen stamps for a free foot-long, with the added condition that a 21 ounce or larger drink must be purchased to redeem the stamps.

In early June 2005, Subway announced that the popular customer rewards program would be phased out due to counterfeiting. Another reason, which was not stated by the company, for the discontinuation of the program was that there was a large amount of internal theft of stamps by Subway employees and affiliates, including the sale of rolls of the stamps online at places such as eBay. Officially the Sub Club program has been discontinued in the US and Canada by Doctor's Associates^[15], but additional markets have also made local decisions to discontinue the program. Currently the Sub Club program is still in use in some countries and territories such as Poland, El Salvador, Finland, Germany, Guatemala, Mainland China(Some stores), Taiwan and Brazil.^{[citation needed]} In many stores, the Sub Club promotion is still advertised on the cash register marquee to this day with "Join the Sub Club"

[edit] Sponsorship

Subway is the corporate sponsor for two NASCAR Sprint Cup series stock car races: the Subway Fresh Fit 500, held at Phoenix International Raceway; and the Subway 500, held at Martinsville Speedway. In addition, Subway has been the primary sponsor of the NASCAR Sprint Cup number 16 car, driven by Greg Biffle. Biffle has appeared in advertising for Subway along with his Crew Chief Doug Richert. In 2007, Tony Stewart has appeared with Jared Fogel in ads, and he has driven his #20 Home Depot Toyota with Subway primary sponsorship in the 2008 Subway Fresh Fit 500. Previously, Subway had sponsored Jeff Purvis' #51 car in at least one race in 2001. They also sponsor a pro-cycling team, and Gretna Football Club

[edit] Controversies

[edit] Criticism

The 2001 book Fast Food Nation by Eric Schlosser criticizes Subway's franchising policies. It claims that in the 1990s, Subway was involved in many legal disputes with franchisees, usually over encroachment (overly aggressive expansion, in which two restaurants are so close in location that they end up competing with one another).

The book blames the "Development Agents" who are given the task of growing the company regionally. They retain a percentage of the franchise fee for their local area, and so it is in their best interest to saturate markets with Subway restaurants in a region, despite the effect it will have on that region's Subway locations. Although this may lead to lower profits per Subway location, it leads to overall higher profits in the region, and therefore higher profits for the entire chain and the Development Agent.

On February 2, 2007 KNXV-TV with the help of the Arizona Department of Weights and Measures, reported that three Subway sandwiches, nominally each 3-foot (91 cm) long, were only 2 feet 8 inches (81 cm), 2 feet 8¼ inches (82 cm), and 2 feet 8½ inches (83 cm) long. The maximum variance in length allowed in that state is 3%, which on a 3-foot sub is 1.08 inches (2.7 cm). Upon further study, the report showed that the box designed to store Subway's 3-foot sandwiches were only 2 feet 10¾ inches (88 cm) in length; shorter than the maximum allowable variance. In response to the report, Subway stated that they are currently in the process of reevaluating their advertising, promotional, training and packaging materials with regard to the specific or implied length of Giant Subs and are taking steps to advise their franchisees to only discuss with customers the approximate number of expected servings and not a specific length of measurement.^[16]

In January, 2008, Subway started an essay contest, which excluded home schooled children. Straight from the contest page:

ELIGIBILITY. Contest is open only to legal residents of the United States who are currently over the age of 18 and have children who attend elementary, private or parochial schools that serve grades PreK-6. No home schools will be accepted.

Controversy has started from this contest, and letters have been written by people in the home school community to both Subway and Scholastic Inc. (sponsor).^{[citation needed]}

[edit] Franchise relations

In addition to its corporate positioning as a more health-conscious restaurant, much of Subway's rapid growth can be attributed to its uncommon business model. Unlike most franchisers, the parent company does not operate any restaurants. Local franchisees operate the stores, and in most markets Subway enters into a contract with a franchisee to be its Development Agent for that market. The Development Agent is then responsible for developing new locations, evaluating stores on at least a monthly basis, and assisting franchisees with whatever needs they may have. DAI takes an 8% royalty on all net sales from each store, while between 3 and 5% (depending on market) of net sales go into a fund, the Subway Franchisee Advertising Fund Trust, also known as SFAFT which is operated by a board of directors voted on by Subway Franchisees. Contrary to other major franchisors, Subway's parent company does not make any contribution towards advertising the chain.

SFAFT is in legal battles with Subway over their excessive spending of advertising funds on things other than advertising.

Among lawyers, Subway has become well-known for its aggressiveness in enforcing the arbitration clauses in its franchise agreements. One case went all the way to the U.S. Supreme Court, which ruled for the company.^[17].

[edit] Global locations

Examples of Subway's international operations: (Listed alphabetically by region)
Sydney, Australia	Sofia, Bulgaria	Puerto Vallarta, Mexico	Dar es Salaam, Tanzania

Africa  Egypt  South Africa  Tanzania  Zambia Asia  Bangladesh  China  Guam  India  Japan  South Korea  Malaysia  Pakistan  Philippines  Singapore  Taiwan  Thailand Australasia  Australia  New Zealand Caribbean  Aruba  Bahamas  Jamaica  Trinidad and Tobago

Europe  Austria  Belgium  Bulgaria  Czech Republic  Croatia  Finland  France  Germany  Greece  Gibraltar  Hungary  Iceland  Ireland  Italy  Netherlands  Norway  Poland  Portugal  Russia  Slovenia  Switzerland  Spain  Sweden  Turkey  United Kingdom

Middle East  Bahrain  Israel  Jordan  Kuwait  Lebanon  Oman  Qatar  Saudi Arabia  United Arab Emirates  Iraq North America  Belize  Canada  El Salvador  Mexico  United States South America  Argentina  Bolivia  Brazil  Chile  Colombia  Uruguay  Venezuela

[edit] References

[edit] Further reading

• Wikinews. "Subway sacks New Zealand worker for sharing free drink; lays theft charges", Wikinews, 2007-05-08. 

[edit] External links

• Official site
• UK Official site
• FoodInfoDB - Nutritional information for Subway's menu items

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