Subway's Success in the Franchise Industry: Insights from Carrie Walsh, President of Subway EMEA Walsh emphasises the importance of smart expansion, menu evolution, and partnerships with experienced operators to maintain the brand's competitive edge.

Subway's global success in the franchise industry has been driven by strategic growth, continuous innovation, and strong franchisee support. Carrie Walsh, President of Subway Europe, Middle East, and Africa (EMEA), emphasises the importance of smart expansion, menu evolution, and partnerships with experienced operators to maintain the brand's competitive edge.

With Subway being one of the world's largest quick service restaurant (QSR) brands today, Walsh offers valuable insights into the key factors that have driven Subway's sustained success in the franchise industry.

Expansion mindset from the start

Subway's journey began with a clear vision for growth and expansion. Founded in 1965 by Fred DeLuca and Peter Buck, Subway started as a single sandwich shop in Bridgeport, Connecticut. The founders had an ambitious goal: to open 32 stores within ten years. By 1974, they had 16 restaurants across Connecticut, and it became clear that to achieve their expansion goals, they needed to adopt a franchise model. This decision marked the beginning of Subway's meteoric rise.

"Subway was founded with an expansion mindset, which helped it become one of the world's largest Quick Service Restaurant brands," Walsh says. The franchise business model allowed Subway to scale rapidly, opening up new markets and increasing brand visibility. Today, with thousands of locations worldwide, Subway's initial focus on expansion has paid off in spades, making it a household name in the QSR industry.

Strategic franchising and smart growth

Subway's franchise success comes from expanding quickly and strategically, with a focus on well-placed locations and a consistent brand image.

"Today, Subway is focused on smart growth and ensuring restaurants are in the right location and image to help drive guest traffic and deliver a high-quality, convenient guest experience," Walsh explains. This approach has enabled Subway to maintain its appeal in a highly competitive market by ensuring that each new restaurant contributes positively to the brand's overall presence.

Another critical aspect of Subway's strategic franchising is its partnership with experienced operators who possess deep knowledge of local markets. "The brand is continuing to partner with strong, well-established operators with local market expertise to strategically expand and strengthen our global footprint," Walsh notes. "By collaborating with operators who understand local tastes, preferences, and business environments, Subway ensures that its global strategy is effectively localised, leading to sustained success in diverse markets."

Benefits of Franchising with Subway

Subway offers a compelling value proposition for potential franchisees, characterised by several key advantages. As Walsh points out, Subway is a "proven, global brand focused on continuous menu and digital evolution." This commitment to innovation ensures that the brand remains relevant and appealing to customers, which, in turn, benefits franchisees.

One of the most attractive aspects of franchising with Subway is the low-cost initial investment required to start a Subway restaurant. This accessibility makes it an appealing option for aspiring entrepreneurs. Moreover, Subway provides franchisees with scalable concepts that can be adapted to different market conditions, further enhancing growth opportunities.

Franchisees also benefit from extensive in-market support and resources provided by Subway. From team member training to strategic pricing guidance and marketing support, Subway offers a comprehensive suite of tools designed to help franchisees succeed. Walsh emphasises that "franchisees that take advantage of resources, including team member training, strategic pricing guidance, digital and in-restaurant promotions, are often more successful in driving traffic and increasing profitability at their locations."

Challenges and the path to overcoming them

Despite its success, Subway has faced significant challenges along the way. One of the most notable challenges came in 2015 with the unexpected death of the company's founder DeLuca. This event forced the brand into a period of significant leadership and business transition.

"In 2015, with the unexpected death of Subway founder and CEO Fred DeLuca, the brand was forced into a major leadership and business transition," Walsh recalls. "During this time, Subway faced growing competition in the sandwich space, and its consumer ratings in critical areas like food quality, friendliness, overall satisfaction, and service began to decline. This dip in customer perception led to decreasing sales and traffic, posing a substantial challenge to the brand."

The turning point came in November 2019 when John Chidsey, a seasoned executive with extensive experience in the F&B industry, came out of retirement to become Subway's first CEO outside of the founding family. Under Chidsey's leadership, Subway embarked on a path aimed at revitalising the brand.

"Under Chidsey's leadership, the brand launched its multi-year transformation journey, which included improving every aspect of the business to help deliver a high-quality experience for our millions of guests," Walsh explains. "This strategy focused on several key areas, including menu innovation, restaurant modernization, enhancements to the overall guest experience, and digital transformation. The brand also intensified its efforts in international expansion, all of which have contributed to its renewed success."

Looking ahead: a future of continuous innovation

As Subway continues to navigate the complexities of the global QSR landscape, its commitment to innovation and strategic growth remains unwavering. The brand's ability to adapt to changing consumer preferences and competitive pressures will be crucial to its continued success.

"The new strategy, largely focused on menu innovation, the modernization of restaurants, improvements to the overall guest experience, including digital, and international expansion, has been a tremendous success and continues to evolve, as the competitive landscape and guests' preferences shift," Walsh concludes.

In the ever-evolving world of franchising, Subway's story is a testament to the power of strategic growth, continuous innovation, and unwavering support for franchisees. For those considering entering the franchise industry, Subway's approach offers valuable lessons in building a brand that not only withstands challenges but also thrives in the face of them.