Financing a subway store

[UrbanRetail]

Several Costa Coffee Drive-Thru's near me have queues all day long. Our Subway is always dead.

 

[alan1302]

Subway was considered healthy? its meat, bread and calorific sauce. We are talking about chains in America that have increased in massive quantities of late, vegan, salad type set-ups.

The whole world is changing - people are buying less fast food. Look at McDonalds even it is changing - selling bad food is becoming a hard sell.

Subway - at least my local ones do sell a a lot of healthier options like salads as well as low calorie/low fat subs...not sure how Subway can be seen as a high calorie though unless you make your sub high calorie

 

[Lewis5373]

I just looking in the subway on our highstreet earier.

Earlier was 2 people in the shop.

Around 2pm it was full in there tbh but it was all school kids.

That will certainly be a consideration. No doubt some bad press like Jared Fogle and the removal of the £5 footlong deal had an impact but I feel like the right location can still bring good results. However I won't say much more until I've spoken the the franchisees (which is part of the process, minimum of 3) to get a true understanding of the trends.

I'll get a Subway perhaps once a week if I'm working from home. There are three on Deliveroo that I can choose from. One of them recently started using little rectangular Subway branded cardboard boxes for Deliveroo that keep the heat a bit better and stops it getting bashed about. I only use that one now. £7.40~ for a 6-inch, 500ml drink and a cookie is good value to me.

Deliveroo and other services are on my list of additional revenue streams to look in to. Apparently they take a 30% cut and it's £700 to set up though!

Only bought a Subway 3 times. Walk in, look at the menu, jumped on by two staff, do you want this, do you want that, what bread, any extras..........'we've got a special on this today'.

Me...'Cheese Roll please '

Any extra cheese with that sir?

Would expect a footlong sub, a drink and 2 cookies for that kind of shocking price.

I agree it's pricey but I don't blame them if it's true that Deliveroo takes a 30% cut!

@Chris Ashdown beat me to it, but given that you have plenty of experience operating a store, what is the value of the franchise to you @Lewis5373 ?

How much more profit will you make from the store as a Subway franchise than you would make from the same retail unit providing similar food on an unbranded basis?

How much less could you source and fit-out premises outside the franchise?

If the first answer is not very much, and the second is a lot, consider starting up without the franchise.

Apart from anything else, if your experience and your customers tell you that they want a foot-long sub, and franchisees cannot/will not supply under the franchise agreement, you have the opportunity to start at an advantage by offering something similar.

This is certainly a consideration, but equally some benefits of a recognised brand, extensive support and the hardest work like operations manuals, intellectual property and other bits already being done. Especially as I have Subway experience but mininal to no actual business experience and zero business qualifications. Franchising will be hard enough but starting from scratch might be a bit much! I'm still leaning towards a franchisee but I'll do my research before investing that kind of money too.

I'm still giving some thought to a franchise in my town. I think it would do very well if placed in the right part of the high street, catching school people etc.

If it's a Subway, time for a business partnership!

If starting on your own the look of the store and the food is so important.

If the food does not look good on instagram don't bother!

If doing your own cafe type then you absolutely must go after the vegan brigade! I had a very nice vegan cake yesterday in one of the locals.

£16 was 4 coffee's and 2 small pieces of cake.

Hmm... cake...

I watched a documentary about Subway on YouTube the other day it was one of the proper channels btw nothing independent or made up. Anyway, turns out they are really struggling in America and loads of franchises have been closing as customers are choosing healthier options.

My personal view is that if you get into this now you are buying into something on the decline rather than something on the rise. Do more research as would hate for you to fail and loose all that money.

Correct, however that's only in America. The EU has disallowed the "yoga mat plastic" for a while and I haven't heard any news or closures in the UK. However I have seen the videos you're talking about and it is still a concern I will investigate, mostly when I meet with franchisees and can get a realistic take on the growth or decline of sales.

Two things that are interesting about that:
1. Americans, in general choosing healthy options??
2. Subway used to be considered a "healthy alternative"...

It absolutely did, but not helped by things like the yoga mat plastic thing, how some stores only get deliveries once a week (so the bagged lettuce already looks dull and tomatos rotting), and that the "Eat Fresh" only refers to salad but nothing else. But it seems Subway is making some progress towards healthier choices in some areas. About f---ing time!

Subway was considered healthy? its meat, bread and calorific sauce. We are talking about chains in America that have increased in massive quantities of late, vegan, salad type set-ups.

The whole world is changing - people are buying less fast food. Look at McDonalds even it is changing - selling bad food is becoming a hard sell.

There will still always be a market though!

Yes that was their marketing when it first came about. Before they started punting the idea of choose what you want, it was all about "Eat Fresh" and stuff like that. The excessive calories in the bread (full of sugar) and the sauces (full of sugar) only came out of the woodwork much later on.

Absolutely, the "Eat Fresh" only referred to the salad and nothing else. The fact the sub is made in front of you was trying to play on the fact it's fresh but it's all from frozen!

it's perception rather than reality people (esp Americans) are buying. Salads are perceived as healthier - despite fat & sugar filled dressings. McNuggets are perceived as as healthier than burgers - though the figures show otherwise.

Of course, it returns to the key point that what happens in America is irrelevant - it's the target market that matters

Absolutely, and there's still a market for the moment!

Several Costa Coffee Drive-Thru's near me have queues all day long. Our Subway is always dead.

Subway - at least my local ones do sell a a lot of healthier options like salads as well as low calorie/low fat subs...not sure how Subway can be seen as a high calorie though unless you make your sub high calorie

Is the Subway a drive through though?

 

[Mr D]

Zero business qualifications?

You fit right in with the business community. Lots of us have little or no business qualifications.

Not saying they are useless to have. What you do not know about can harm your business. You will have picked up considerable knowledge yourself from experience and seeing how others do things - even badly - so as not to copy them!

 

[Chris Ashdown]

Go to waterstones and buy the best start-up book they suggest and read it through about 3 times, then keep it in a draw under your desk for future reference, you have probably gained far more experience than a large number of posters on this forum

 

[Opinion87]

Deliveroo and other services are on my list of additional revenue streams to look in to. Apparently they take a 30% cut and it's £700 to set up though!

I imagine the margins at Subway are pretty decent, so 70% of something is better than 100% of nothing. I wouldn't walk the 25-30 minutes to grab one, so if it wasn't on Deliveroo, I wouldn't be a customer.

 

[Lewis5373]

Zero business qualifications?

You fit right in with the business community. Lots of us have little or no business qualifications.

Not saying they are useless to have. What you do not know about can harm your business. You will have picked up considerable knowledge yourself from experience and seeing how others do things - even badly - so as not to copy them!

I have worked in 14 stores over 3 franchisees and I have certainly seen the good and bad of each of them. I even had a list I made at the time. It's definitely something I aim not to repeat, like having 3 directors for 1 main store and 1 satellite. The communication was so messy that nothing was ever done and it was worse than calling customer services and being bounced around on hold!!

Go to waterstones and buy the best start-up book they suggest and read it through about 3 times, then keep it in a draw under your desk for future reference, you have probably gained far more experience than a large number of posters on this forum

I am looking in to books and have downloaded a few PDFs. There's a lot of good content online, and I'll give them credit, the gov.uk website does a decent job in explaining quite a lot of things.

I imagine the margins at Subway are pretty decent, so 70% of something is better than 100% of nothing. I wouldn't walk the 25-30 minutes to grab one, so if it wasn't on Deliveroo, I wouldn't be a customer.

The margins aren't as good as someone like McDonalds but this is reflected in the price of starting one up, but absolutely right on the percentages, I'd rather take those customers because it's still something, and someone else will do it if I didn't!

 

[Mr D]

The margins aren't as good as someone like McDonalds but this is reflected in the price of starting one up, but absolutely right on the percentages, I'd rather take those customers because it's still something, and someone else will do it if I didn't!

Plus someone who likes your stuff enough to order may well while in the area pop in and buy too.

 

[busowner987]

I would not worry too much about qualifications. Experience is far more valuable than qualifications.

 

[Lewis5373]

Plus someone who likes your stuff enough to order may well while in the area pop in and buy too.

Absolutely!

I would not worry too much about qualifications. Experience is far more valuable than qualifications.

I'm not worried, I know there will be a LOT of learning but everyone has to start somewhere, right?

 

[Ray272]

Mate had 3 stores in Scunthorpe. Not anymore. If you worked in there you should know roughly the sales per day needed. Subway to me seems dead. Was a good place to eat for a couple of years but things went downhill once the meatball marinara became a halal friendly option. Fiveguys seems like a strong brand and under exposed. Not sure if it's a franchise model.

 

[Lewis5373]

Mate had 3 stores in Scunthorpe. Not anymore. If you worked in there you should know roughly the sales per day needed. Subway to me seems dead. Was a good place to eat for a couple of years but things went downhill once the meatball marinara became a halal friendly option. Fiveguys seems like a strong brand and under exposed. Not sure if it's a franchise model.

Why did he get rid of them?

Haven't heard of this meatball marinara thing, need to do some googling!

Five Guys doesn't do franchising in the UK, it's all corporate

 

[glengraving]

Five Guys doesn't do franchising in the UK, it's all corporate

and at £8.75 for a bacon cheeseburger (not a meal), location and branding is even more important for them.
more than one or two in most cities would feel like saturation

 

[Ray272]

Why did he get rid of them?

Haven't heard of this meatball marinara thing, need to do some googling!

Five Guys doesn't do franchising in the UK, it's all corporate

Because he was spending more than he was making.

Seems really risky this subway idea. Why not just get a baked potato stall or something and use 3k wisely to gain some valuable cost analysis experience etc. I'd fancy more luck with a mobile burger van. Day trade, night trade. Just burgers. Nice well made burgers.

 

[glengraving]

there's always money in the banana stand

 

[Lewis5373]

and at £8.75 for a bacon cheeseburger (not a meal), location and branding is even more important for them.
more than one or two in most cities would feel like saturation

Bacon cheeseburger at a Subway? Sure it wasn't Burger King?

I kid but there definitely can be over saturation, because the Franchise Agreement allows the Development Agent to plop down Subway stores with no care for it's radius to other stores

Because he was spending more than he was making.

Seems really risky this subway idea. Why not just get a baked potato stall or something and use 3k wisely to gain some valuable cost analysis experience etc. I'd fancy more luck with a mobile burger van. Day trade, night trade. Just burgers. Nice well made burgers.

Yet some others can be quite profitable, and throughout this thread I've seen I definitely need to do extensive research, and although I only need to speak to 3 franchisees minimum to progress my application, but I will likely speak to many more.

 

[Chris Ashdown]

Dont forget you can always look up each franchisees accounts and see how their trading turnover has been for a few past years to get a better picture, you will just need their trading name, https://www.gov.uk/get-information-about-a-company

 

[Mark T Jones]

Dont forget you can always look up each franchisees accounts and see how their trading turnover has been for a few past years to get a better picture, you will just need their trading name, https://www.gov.uk/get-information-about-a-company

I suspect most franchisees will be in the exemption threshold. To varying degrees they might be prepared to hand out full accounts.

 

[Lewis5373]

Dont forget you can always look up each franchisees accounts and see how their trading turnover has been for a few past years to get a better picture, you will just need their trading name, (had to remove link as I can't post them before 30 posts even though it's a quote)

I sometimes do look at the company information, and like Mark said many are exempt... but in all honesty I do get a bit confused with all of the terms on the balance sheet and what exactly I'm looking at.

Other than through my research of speaking to franchisees directly, I've also found a good source of information. Although I take it with a MASSIVE grain of salt, some listings on business sale websites like businessesforsale and Dalton Business list the turnover and profit figure. I'm looking through some of this information to lightly assist me in some of my forecasting/planning.

I suspect most franchisees will be in the exemption threshold. To varying degrees they might be prepared to hand out full accounts.

It appears to be that way. When I do my mandatory research by meeting a minimum of 3 franchisees, I am able to ask for their full accounts then, and they can give them to me at their discretion.

 

[Jo_TippledPink]

Interesting that you mention Maidstone as a possible location recommended by Subway- we had two but both now closed down. One was there for over 10 years, good location, I was surprised that it went. But we did briefly look into buying a Subway franchise in Canterbury but changed our minds- the guy came back to us a couple of months later and wanted to give it away for free! So many subway franchises up for sale makes you wonder why.

 

[Lewis5373]

Interesting that you mention Maidstone as a possible location recommended by Subway- we had two but both now closed down. One was there for over 10 years, good location, I was surprised that it went. But we did briefly look into buying a Subway franchise in Canterbury but changed our minds- the guy came back to us a couple of months later and wanted to give it away for free! So many subway franchises up for sale makes you wonder why.

I am aware of troubles in America and have seen plenty of sales of Subway stores too. I've worked in 14 Subway stores through 3 franchisees myself, and have been a customer thousands of times, and I find that the majority of stores offer poor customer service, do not take food safety seriously, have messy restaurants, poor maintenace, but just about scrape by on the field consultant inspections. Most stores pay minimum wage, many overwork their staff, and generally staff are treated as a short term employment. In my case of 3 franchisees, one was just a complete shambles, another was too controlling and expected too much, and the other had three directors for two stores and there was constant bouncing between the owners to get anything done. A quick look on Google shows many Subway stores averaging a 2 or 3 star Google rating with few as 4 or 5 stars. I know you can't please everyone so I don't expect all reviews to be positive. My seminar with a Development Agent told that Subway is now focusing on improving existing stores instead of opening new ones so I am hoping this slowly changes.

The point I am getting at is that I'm not discounting the bad management from the franchisee/store owner as a reason for stores closing or being sold, including some being closed for failing to remain in compliance, which one of the stores I worked at almost closed for. I will absoluely do my due diligence with questioning DA's and idependant franchisees, and I feel like a visit to a Franchise Exhibition will be helpful in opening my eyes and considering other franchises, the benefit here being I won't recieve the inheritance I need to push my finances to the 30% mark until November 2020 so I will use the time wisely to do my research. I'm required to speak to 3 franchisees as part of the application process but will be looking to do a lot more.

I'm not saying you're wrong. I'm not saying there is nothing to explore or that some stores may be closing because they have become unprofitable, but there could be other things not being considered so only time, extensive research, and franchisee visits will tell me all for sure, again though, keeping my mind open at various events and exhibitions too.

 

[Dan101]

I have made acquinance with 2 different Subway franchisees over the past couple of years and neither had anything good to say about Subway as a company, both regretting their decision in signing up. Their biggest gripe is the almost Nazi like grip Subway have over you. You are less a business owner and more an operator despite it being your money investested. Want to close 10 minutes early? You need to get permission from HQ. They also take a hearty share of your revenue in fees.

Why don't you create your own brand and do your own thing? I did exactly that and things went really well for me. I'm happy to help you out with advice any time as someone that went through the entire process from concept to opening and all the way to selling the business.

 

[ComPropSolicitor]

I am aware of troubles in America and have seen plenty of sales of Subway stores too. I've worked in 14 Subway stores through 3 franchisees myself, and have been a customer thousands of times, and I find that the majority of stores offer poor customer service, do not take food safety seriously, have messy restaurants, poor maintenace, but just about scrape by on the field consultant inspections. Most stores pay minimum wage, many overwork their staff, and generally staff are treated as a short term employment. In my case of 3 franchisees, one was just a complete shambles, another was too controlling and expected too much, and the other had three directors for two stores and there was constant bouncing between the owners to get anything done. A quick look on Google shows many Subway stores averaging a 2 or 3 star Google rating with few as 4 or 5 stars. I know you can't please everyone so I don't expect all reviews to be positive. My seminar with a Development Agent told that Subway is now focusing on improving existing stores instead of opening new ones so I am hoping this slowly changes.

The point I am getting at is that I'm not discounting the bad management from the franchisee/store owner as a reason for stores closing or being sold, including some being closed for failing to remain in compliance, which one of the stores I worked at almost closed for. I will absoluely do my due diligence with questioning DA's and idependant franchisees, and I feel like a visit to a Franchise Exhibition will be helpful in opening my eyes and considering other franchises, the benefit here being I won't recieve the inheritance I need to push my finances to the 30% mark until November 2020 so I will use the time wisely to do my research. I'm required to speak to 3 franchisees as part of the application process but will be looking to do a lot more.

I'm not saying you're wrong. I'm not saying there is nothing to explore or that some stores may be closing because they have become unprofitable, but there could be other things not being considered so only time, extensive research, and franchisee visits will tell me all for sure, again though, keeping my mind open at various events and exhibitions too.

Unfortunately this is the issue with the franchise model when its not done well. You are buying into a brand so if 30% of the stores have poor ratings people are naturally going to assume that all of the stores are like that. I don't go to subway more or less because of the above and the point to note is that its not that I don't go into certain subways - its that I don't go into any I like everyone else assumes they are cut from the same cloth. I also don't have time to walk in and out of several subways to find one that might be OK inside with decent service.

Personal - don't see why you cannot adopt the subway model? and make your own sandwich shop from scratch. No ties, a lot cheaper. Arguably, better in the long run without the ties.

 

[BristolBiz]

I don't know the ins & outs of the Subway franchise contract, but generally if someone has control of your buying price & your selling price then that's a big no.no.

The other thing to keep in mind is that royalties will be a based on turnover, regardless of profit. Unless your store takes off like a rocket the bulk of your profits will be going to head office.

I would also guess that Subway will encourage you to sign a long lease on your store - it means that they can continue to collect royalties from stores unable to close because of the legal commitment to continue paying rent.

You need to ask yourself, after the initial (paid for?) training course what benefit will you gain from your royalties?

Like the previous poster I would recommend doing it yourself in the best location you can find. You have the best possible background for doing this and a great attitude to customer service. Either way - good luck

 

[Raxx11]

I’m a little late to the party here, it’d be interesting to hear if @Lewis5373 went for the Subway franchise or not?

I have just sold my Subway stores, so have lots of knowledge to impart!

 

[Deleted member 59730]

Subway? Never been. Isn't it just a sandwich? Never been in a Macdonalds either.

Many years ago I knew two different owners of sandwich bars. Both made an absolute fortune but they did look about 1000% more appetising than a Subway window.

 

[Raxx11]

Subway? Never been. Isn't it just a sandwich? Never been in a Macdonalds either.

Many years ago I knew two different owners of sandwich bars. Both made an absolute fortune but they did look about 1000% more appetising than a Subway window.

It’s “just a sandwich” in the same way Dominos is “just a pizza” and KFC is “just fried chicken”. Of course you can serve a similar product independently, but it’s the familiarity of the brand and menu of a franchise that produces the customer volume. That and being in the right location of course.

Sandwiches are a hard game to make real money in at the moment, it’s not an area I’d rush back into in a hurry!

 

[Gordon - Commercial Finance]

So @Raxx11 in the absence of the OP to give us an update, maybe you could share with us what your experience was over the course of your time, and why you ultimately decided to sell up, and what was your experience in that process?

 

[Opinion87]

Yeah, I'm interested too.

 

[Lewis5373]

I have made acquinance with 2 different Subway franchisees over the past couple of years and neither had anything good to say about Subway as a company, both regretting their decision in signing up. Their biggest gripe is the almost Nazi like grip Subway have over you. You are less a business owner and more an operator despite it being your money investested. Want to close 10 minutes early? You need to get permission from HQ. They also take a hearty share of your revenue in fees.

Why don't you create your own brand and do your own thing? I did exactly that and things went really well for me. I'm happy to help you out with advice any time as someone that went through the entire process from concept to opening and all the way to selling the business.

I had not got to the research stage of speaking to franchisees when I made this post, but I expect I would have discovered the same thing.

For the fees, they seem quite typical fees. They're high, yes, but my research at the time showed they're not really higher than most of the competition that I had looked at.

For creating my own brand, I think if I was do to something similar to sandwiches and/or Subway, then it seems that would be the best route, but at the moment I've got my eyes on something else entirely, but if I revisit something in food, I may get in touch if you're still active, thank you. I suppose the advice could still apply in other sectors though!

Unfortunately this is the issue with the franchise model when its not done well. You are buying into a brand so if 30% of the stores have poor ratings people are naturally going to assume that all of the stores are like that. I don't go to subway more or less because of the above and the point to note is that its not that I don't go into certain subways - its that I don't go into any I like everyone else assumes they are cut from the same cloth. I also don't have time to walk in and out of several subways to find one that might be OK inside with decent service.

Personal - don't see why you cannot adopt the subway model? and make your own sandwich shop from scratch. No ties, a lot cheaper. Arguably, better in the long run without the ties.

I have to agree - my experience as a consumer at almost all stores has been very poor. Having worked in stores before, I know there is a lot to the minimum wage job, so that's likely to contribute too. And I only have to look at the store ratings on Google and it seems most are about 2 stars.

Since this post, which was 3 years ago, I've completely dropped the Subway idea and agree that if I were to go in to food service, that doing my own thing would probably be best, or at least never Subway.

I don't know the ins & outs of the Subway franchise contract, but generally if someone has control of your buying price & your selling price then that's a big no.no.

The other thing to keep in mind is that royalties will be a based on turnover, regardless of profit. Unless your store takes off like a rocket the bulk of your profits will be going to head office.

I would also guess that Subway will encourage you to sign a long lease on your store - it means that they can continue to collect royalties from stores unable to close because of the legal commitment to continue paying rent.

You need to ask yourself, after the initial (paid for?) training course what benefit will you gain from your royalties?

Like the previous poster I would recommend doing it yourself in the best location you can find. You have the best possible background for doing this and a great attitude to customer service. Either way - good luck

They're not in total control of the selling price, they give guidelines but the franchisee could select their prices. I don't recall if there are limitations to that, or if it needs approval though.

But yes, all valid points, and since this post, I've dropped the idea. Thank you.

I’m a little late to the party here, it’d be interesting to hear if @Lewis5373 went for the Subway franchise or not?

I have just sold my Subway stores, so have lots of knowledge to impart!

No I never went for it. This was primarily because of:

• The initial investment cost
• The removal of whatever flexibility was left within Subway (although I never expected much, as is the nature of franchising)
• The amount of unhappy owners and general advice against it
• Having found a different non-food opportunity that avoids most of the above
• My own personal experiences of being a consumer in stores and seeing the brand go downhill
• More niggles

I dropped the idea before I got to the research stages of speaking to current franchisees.

Your account doesn't seem active but if you do see this, I'd still be happy to learn about your experiences.

Subway? Never been. Isn't it just a sandwich? Never been in a Macdonalds either.

Many years ago I knew two different owners of sandwich bars. Both made an absolute fortune but they did look about 1000% more appetising than a Subway window.

In fairness to Subway, their store refirbishments do make the stores look fresher. I forget the name of it all. "Fresh forward" I think.

The trouble is that if I recall correctly, and take this with a pinch of salt, that the owner MUST refirbish to this when their date comes, but entirely at the franchisees cost. If they don't want to refirbish then tough. That level of control to make me spend money was certainly offputting.

It’s “just a sandwich” in the same way Dominos is “just a pizza” and KFC is “just fried chicken”. Of course you can serve a similar product independently, but it’s the familiarity of the brand and menu of a franchise that produces the customer volume. That and being in the right location of course.

Sandwiches are a hard game to make real money in at the moment, it’s not an area I’d rush back into in a hurry!

That familiarity with the brand of Subway specifically can help, but it can also make it worse. The customer experience at Subway seems to have been going downhill for years and almost all stores have really poor ratings (as does KFC), which of course will carry down the stores that do well.

So @Raxx11 in the absence of the OP to give us an update, maybe you could share with us what your experience was over the course of your time, and why you ultimately decided to sell up, and what was your experience in that process?

I'm back, apologies for not replying sooner, but better late than never, right! As replied to above, the update is I abandoned the idea and am exploring other opportunities entirely.

I too would like to learn about Raxx11's experiences but it seems they only made the account to reply to this post and haven't been active since.

Yeah, I'm interested too.

Me too!

And finally!

I got alerted to this thread by an email that a user named "SubWank" had said "Stay away from Subway. They have something called Arbitration. This is a legal process in which they can take your store from you and you have to go to New York to defend yourself. "

It seems the user has been removed or deleted their account, and the post deleted. I don't know how accurate that is. While that does sound painful, how likely is it that it would happen though? Surely you'd have to be a really poor franchisees, fail your field consultant inspections many times, etc?

Thanks to everyone for their replies over the entire thread who helped me to see that Subway isn't the right thing for me to invest in.

 

[bodgitt&scarperLTD]

Thanks for the update- it's always nice to know that advice given on here has been well received and used. Much better than the usual wasters who come on here complaning that someone in HR has been mean, and then never update.

Have you decided to invest in anything else?

 

[DazRave]

I don't know why I was so interested in this entire thread but I read it all anyway and quite enjoyed it. I too would love to know what @Raxx11 learnt over their time running Subways and more specifically why they ultimately sold up.

This is the UKBF I signed up for.

 

[Not a subway]

Subway have a fines process which is called arbitration. They can make your store non compliant for something as simple as having bread crumbs on the floor during lunchtime.
This happened to myself, a former franchisee. Subway was awarded damages of $75,000. I told them to come and collect.
Luckily, the lockdown occurred and they left me alone for two years. I closed up shop and left once they started litigation.
The store was stripped and left a shell.

 

[MarkOnline]

Subway have a fines process which is called arbitration. They can make your store non compliant for something as simple as having bread crumbs on the floor during lunchtime.
This happened to myself, a former franchisee. Subway was awarded damages of $75,000. I told them to come and collect.
Luckily, the lockdown occurred and they left me alone for two years. I closed up shop and left once they started litigation.
The store was stripped and left a shell.

A court ordered you to pay damages of $75000 for having bread crumbs on the floor? They must have been some nasty bread crumbs you were liable for. Have you possibly missed anything out of this story?

 

[JEREMY HAWKE]

I dont believe word of it Subway are a perfect company and the food is lovely I have 591 points on my app this morning only 9 a way from a free salad
What is there to complain about

 

[IanSuth]

A court ordered you to pay damages of $75000 for having bread crumbs on the floor? They must have been some nasty bread crumbs you were liable for. Have you possibly missed anything out of this story?

He didn't a curt ordered $75,000 he said they use an "arbitration scheme" which i assumed they actually control and which likely made the $75000 award.

I would "guess" he failed a bunch of cleanliness inspections which triggered some form of penalty clause which is where the $75k came from

 

[MBE2017]

My wife used to order in subway for lunch, then I ordered from a local sandwich store instead. There offering was so much better at a similar price, and doing there own deliveries the orders arrive in 20 mins, not the hour to hour and a half for the subway stores.

So for us, no turning back, I prefer supporting small local businesses whenever possible, the extra quality from the local independent (3x as good IMO) made it an easy choice for ourselves.

Same with coffee, never drink it myself, but our local small chain is stacked out at the 2 to 3 locations they have, nicer atmosphere and much better coffee than the big franchises.

 

[Mark T Jones]

My wife used to order in subway for lunch, then I ordered from a local sandwich store instead. There offering was so much better at a similar price, and doing there own deliveries the orders arrive in 20 mins, not the hour to hour and a half for the subway stores.

So for us, no turning back, I prefer supporting small local businesses whenever possible, the extra quality from the local independent (3x as good IMO) made it an easy choice for ourselves.

Same with coffee, never drink it myself, but our local small chain is stacked out at the 2 to 3 locations they have, nicer atmosphere and much better coffee than the big franchises.

This post highlights where most inexperienced operators on F & B go wrong.

It's not about what you or I like - it's all about finding a target market and extracting money from them - repeatedly. Whilst Subway have lost their way a bit, they made a pronominally good job of becoming a go-to brand in student communities; to the extent that student wouldn't 'go for a sandwich', they would 'go for a Subway'. They also had an embedded up-sell process.

These are the things that a decent franchise should bring.

Selling 'better coffee' only works if you have the skills to find a target bunch of clients who appreciate - and are happy to pay for better coffee.

 

[Not a subway]

A court ordered you to pay damages of $75000 for having bread crumbs on the floor? They must have been some nasty bread crumbs you were liable for. Have you possibly missed anything out of this story?

You can fail a compliance inspection for many reasons. The compliance team is paid for by the SubWay development agent who act as the regional corporate arm of SubWay.
If a store fails for the same reasons 3 months consistently then they can terminate your agreement and the D.A. can take your store, adding it to their portfolio.
The arbitrators are also appointed by SubWay.

 

[Casually made]

I was a moderate fan of subway until a 6inch meal "deal" became the best part of 6 quid and you would need a mortgage for a full sandwich

I seem to remember the same thing pre pandemic was about £4.20

Only thing i order there now are the £1.50 pizza slice things they do which interestingly were exactly the same price 10 years ago