Teacher : Mr. Peter MORRISON
ESDES 1A / e10
A) Origin of the company
The Subway Company was founded in 1965 by Fred DeLuca, a 17 year old high school student, and Dr. Peter Buck, a family friend. Fred DeLuca had the wish to earnmoney to be able to pay for university. This is the reason why Dr. Peter Buck advised him to open a submarine sandwich shop.
Indeed, this latter had noticed that these kinds of shops were very successful. Dr. Buck explained to him how to open and manage a restaurant and agreed to loan him some money and to be his partner. As a result, DeLuca opened his first SUBWAY® in August 1965, in Bridgeport,Connecticut, with Dr. Buck’s $1,000 investment.
Firstly, they called it Pete’s Super Submarines. Then, it became SUBWAY®.The first year can be considered difficult. But they had decided to open their second location.
B) Product / service
Firstly, SUBWAY® offered subs, salads and personal pizzas but now it also sells cookies, muffins, yogurts, brownies, and chips. These subs are made beforeyour eyes by an employee who asks you what you would like. You can choose several kinds of bread and sauce, cheese or not, kind of meat, additional spice but above all vegetables : your sub will contain lettuce, tomatoes, onions, peppers, sweet peppers, cucumbers, pickles, olives, carrots, corn, radishes and avocado.
There are not all these vegetables in every restaurant, it depends on everyoneof them and the country where they are. Furthermore, the different sizes depend on the country. The subs are bigger in the USA than in the European Union. There are several drinks, with or without ice available, such as Coca Cola® or Nestea®. SUBWAY® offers standard menus such as the student menus and limited time offers. In France, everyday, one kind of Sub15 is discounted to 2.90€ instead of thestandard price from 3.20 to 4.20€.
Some of the restaurants, above all in Muslim countries use Halal meat to fit with the customer’s expectations. In the same idea, there are vegetarian sandwiches. SUBWAY® is willing to serve health respectful products and some subs are 6 grams maximum of fat.
Finally, SUBWAY® offers sandwich platters with approximately 15 portions of 4-inch subs and giantsubs which can be made to any length we choose up to one hundred feet.
C) History of development
As we already said, the first restaurant was founded in 1965. Brian Dixon, DeLuca’s friend was the very first SUBWAY® franchisee. This is Dr. Peter Buck who explained to Fred DeLuca how the submarine sandwich business worked. He advised him to first, rent a store, then fit out it, and finally, buyenough food to begin business. They worked together throughout these years. They aimed to open 32 SUBWAY stores in the next ten years. At the beginning, Fred DeLuca and Dr. Buck did not really trust in their organization. Therefore, he was at the origin of the SUBWAY® franchise. By 1974, during an interview with their lawyer, they began to talk about franchising. This was the new way they chose tomake people invest in their company.
Some impressive figures
Firstly it is worth presenting the main figures of Subway Restaurant corporation. In the last year, the company earned about $11.3 billion (United States $8.2 billion, Canada $1.1 billion, International $2.0 billion) whereas in 2007 the revenue was about $9 billion. So, we can notice a significant increase: in fact,the profits grew by 7.88 % in the last three years.
This raise relies on the grid of Subway franchises. Nowadays there are exactly 32,239 restaurants in 91 countries. This impressive number of restaurants can be explained by the franchise’s cost. Indeed, by comparing it to the other leaders of quick service restaurants, such as Mac Donald’s or Taco Bell, Subway is by far the cheapest.