Professional Documents
Culture Documents
History
Fred DeLuca and Dr. Peter Buck opened the first SUBWAY restaurant in the city of Bridgeport, Connecticut, USA, in the summer of 1965. They later incorporated in the name of Doctors Associates Inc. Today, the SUBWAY system is the largest restaurant chain in the world. Focused on making great sandwiches. Many SUBWAY customers have become franchise owners simply because they believe in the product
Introduction
A leading sandwich chain, with 37881 restaurants, spread across 98 countries out of which 250 are in India Its USP lies in its association with both health & taste
Franchisee Model
Finding locations.
Leasehold improvements and equipment. Hiring employees and operating restaurants. Paying 8% royalty to the company and a fee into the advertising fund.
Franchisee Model
The company provides: Access to formulas and operational systems. Store design and equipment ordering guidance. Training program. Operations manual. Representative on-site during opening.
Training :-Manager of franchise takes part in companys intensive twoweek program. Restaurant/Store design: Franchise is provided with floor plans for specific location. Site selection: Franchise is assisted in evaluating the location for business. Equipment ordering: Franchise receives guidance on ordering equipment package for timely delivery.
Capital requirement
General breakdown: Initial franchise fee: Rs 5,40,000-8,10,000. Leasehold improvements: Rs 6,48,000-77,22,000. Equipment hire-purchase security deposit: Rs 1,62,000-35,10,000.
Capital requirement
Security System: Rs 54000-4,05,000 Outside signs: Rs 64,800-11,34,000 Opening inventories: Rs 1,35,000-5,40,000 Insurance: Rs 21600-2,16,000 Supplies: Rs 27000-189000. Training Expenses: Rs 1,08,000-378000
Capital requirement
Opening advertisement: Rs 54000-324000 Misc expenses(Business licenses, utility deposits, small equip. &surplus capital): Rs 86,400-10,80,000. Additional funds(3 MONTHS): Rs 421200-23,22,000 Estimated Total Investment: Rs 49,68,000- 1,70,10000. These figures are estimates of complete investment in setting up a subway restaurant and operating it for 3 months.
Profit Sharing
40% of all the sales are given to the franchiser i.e. subway (value of the material + the subway royalty). For example if the restaurant is able to make Rs. 100,000 as monthly sales then Rs 40000 are given to the subway and rest Rs 60000 for all the expenses and profit margin
Organization Structure
INDIA OFFICE (DELHI)
FRANCHISEE 1
FRANCHISEE 3
Financial Strategy
Financial Objectives
Higher Number of bills Higher Billing Amount
Targets
Monthly, weekly & daily targets are allotted In terms of Sales and COGS (Max 35% of sales)
Pricing
Varies across cities, purely as a function of logistics Avg. monthly prices are paid to vendors.
Royalty
8% of revenues is paid as royalty fee 4.5% is allocated to marketing funds
Merchandise Planning
Forecasting
By taking past 3 years data and comparing it with past 3 weeks data Orders are given for 7 days worth of materials needed and an additional 3 days as buffer Weekends see and over and above 10% extra order
Vendor Relations
Vendors for vegetables are generally wholesellers, who in turn source from various famers These vendors have a long term contract with the company After first few trades, they learn what size and quality of vegetables are taken by Subway
Merchandise Planning
Sourcing
Sauces are provided by a third party vendor Jalapeos, Olives and Pickles are bought tinned packed Meat is sourced from Delhi All the purchasing is done centrally
Store Management
Wash Mechanisms
Each store has a cleaning bay for vegetables
CLEANSE
ICE WASH
HRM
Rercuitment 15 member staff working in 2, 8 hr long shifts Team meetings happen at 5-6pm , where the incoming and outgoing staff discuss
Training Online training of employees is done by the University of Subway Each employee has to complete certain number of modules with specified time A new staff member is trained in cutting, baking, sandwich assembly, packing, customer interaction They are also trained to Up-Sell
HRM
Motivation A part of profits on achieve Sales Targets is shared with everyone A monthly dinner and movie night is organized The concept of employee of the month is also practiced to promote healthy competition All the employee are treated fairly, specially in front of the customers
Service
Presentation Techniques
Two bays: one non-veg and the other veg with billing counter in the center Customers and can see what is being made and can also customize their subs The layout allows a sequential flow from ordering, making of the sub to billing
Atmospherics
Service
Atmospherics
Color: The colors green and brown are predominantly used to signal healthy/hygenic premises Music: There is no one particular genre which is played Lighting: White Lighting is used which is fairly uniform throughout the store All the interior designs and layout are standardized across all stores by Subway International
Uniforms
All the employees are quite smartly dressed in Black Subway T-shirts
Service
Website
Custom website for India It includes Menu Offers Restaurant locator How to Order Franchise details
Service
Principles of Customer Interaction
No arguments with the customer The customer is always right always smile
Service Recovery
In case of service failure such a wrong order, mistake is admitted by the employees (no matter whos fault it is) A new Complimentary Sub is served
Thank You