S U B W A Y
A F R I C A
FEATURE
best bite THE
IN TOWN
In the franchise outlet Global League sandwich chain Subway has now overtaken MacDonald’s incredible but true. And 2012 will see a projected store increase in South Africa of almost double its current count, and expansion into other African countries accelerated, says Debbie Martins, Area Development Manager Subway Sub Saharan and Southern Africa. By Colin Chinery 2
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hile many South Africans are increasingly cash rich they are also finding themselves time short. And with more and more women entering the work place and a breakdown of the nuclear family, South Africans are finding it harder to find time to prepare meals at home. Unsurprisingly the fast-food restaurant option is booming. In the feisty world of franchising nothing beats a good old-fashioned fast food outlet. It’s not happenchance that in the world top ten franchises, seven are fast food brands, and within this broad sector sandwich franchises are growing into a franchise genre all of their own. Last year the US-based Subway overtook burger supremo MacDonald’s
Subway Africa FEATURE
as the franchise with the most number of outlets worldwide – 33,749 sites in 95 countries compared with 32,737 for McDonald’s at the time. In recent years Subway has made a major push into international markets with its successful franchised business model emphasising small, low-cost outlets. Subway came to South Africa 16 years ago in 1996 and now has 17 franchise stores here with another 30 projected for this year. There are 12 outlets across Tanzania and Zambia. “Although we’ve been here 16 years up till now there has not been a strong focus on building stores,” says Randburg-based Debbie Martins, Area Development Manager Subway Sub Saharan and Southern Africa. “But this year we have implemented a national marketing campaign. Our focus is to Build Sales, Build Profits, and Build Stores. We are very excited about the prospects of continuing to build the Subway brand in South
Africa and we feel the market is right for Subway and the introduction of our growth strategy.” From Argentina to Zambia, the Subway core menu - with cultural and religious variations – remains essentially the same along with a strong emphasis on freshness and customer involvement. As part of its new South African push, campaigns are rolling out every eight weeks, with an introduction of turkey meat as the current promotion. While turkey meat is available in South African delicatessens and the cold cut sections of major stores, very few brands in the Quick Service Restaurant sector offer turkey. “Turkey meat is nowhere close to being as popular as it is in Britain and the USA. But it’s a healthier option, a very tasty meat, www.southafricamag.com
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and we are excited about how the consumer will adapt to it.” A Subway menu highlights a selection of sandwiches low in fat and under 350 calories and the brand has a reputation for offering customers a better alternative to traditional greasy and fatty fast food. “We are not by any means indicating we are a health shop, but we do give healthier options, and ‘Eat Fresh’ is very much a focus for us.” What makes a Subway sandwich a unique experience? “It’s made freshly before your eyes, just the way you like it; the sandwich making process is very user friendly, and the customer becomes part of the experience. “We have 16 standard sandwiches as well as options specific to a country or particular market. In South Africa for instance its chicken mayonnaise, in Tanzania an offering based around vegetarian feta cheese in tikka spice. As a customer you make the decisions on a sandwich all the way down the line. You might pick cheese from the menu and then decide on the kind of cheese, which bread from five different types – in our stores we bake every four hours - types of vegetables and all the way down to the sauces and extras that go with it. And of course we have vegetarian options and variations. “At many places elsewhere the sandwiches are pre-made and I have to have what is offered to me. But as a Subway consumer I’m very much in control of what I am having in my sandwich. Walk by a Subway store and you can smell 4
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the fresh bread and the fresh cookies – very enticing!” The perception that sandwich franchises are healthier than burger franchises is one reason for the rapid expansion of Subway. Lower start-up costs, minimal equipment and space requirements and the no cooking factor are other appealing reasons for the prospective franchisee. Recruiting the right franchisee, one that fits the ethos of the brand is obviously key, says Martins. So too is a sound business aptitude and a sound business plan. “It’s all about team work, being an entrepreneur. Like any franchise Subway has systems and controls in place. “Motivation is central to success, and initially you need to be hands-on. It’s not that simple to make a good return on you’re business when you are not involved.” The quality of training is crucial, and for South African franchisees this is undergone in a number of training centres across the world, South African’s franchisees generally go to either Dubai or India. Staff training includes Subway’s own on-line university as well as hands-on instruction. “The way you get to make the perfect sandwich is through practice.” Securing the right site selection is another imperative aspect of a successful Subway store; Subway undertakes extensive research into issues such as viability, visibility, accessibility and demographics. Identifying the major traffic patterns, the availability of parking, the cost of utilities, the rent per square foot are other factors to consider when locating a site.
Subway Africa FEATURE
It can take eight to 10 weeks from the signing of the franchise agreement to the opening of a store, and then a further three months – during which teething issues are identified and resolved – before the official Grand Opening. Franchisee investment input is between R750,000 to R1 million, depending on store size, with those in shopping malls and food courts among the smaller. Stores vary in size between 35-60 Square metres. “The main challenge is making sure we have the right people on board.” Subway’s suppliers are selected by price and reputation, and with a strong and growing focus on local producers. Contracts are reviewed every six months and in line with its growth plans. “We’ve got a really good group of suppliers on board, who understand our growth strategy, where we are going, and who want to grow with us.” In Tanzania and Zambia where KFC, Debonairs Pizza, and Steers are established – the
growth is impressive and accelerating, and Martins is encouraged by the potential. “We are doing very well, absorbed into the market and consumers seem to seriously love Subway. “The big thing about Subway is that we are worldwide and Number One QSR in terms of volume (in number of stores). There are always challenges when you go into an emerging market, but all have been faced across the globe and we have reference to the experiences of a very large network. We don’t have to re-invent the wheel. “From the consumer’s point of view, having a Subway sandwich as a meal is healthier, and fun to make and eat. From the perspective of the franchisee there are exciting opportunities here in South Africa and elsewhere in Africa where we are positioned. We see our brand growing in leaps and bounds in the next couple of years - so keep your eyes open and see what’s happening in Subway Africa!” END
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