International Law

Subway Continues to Expand

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Jim Coen, over at Franchising in New England, writes about the expansion of Subway, in contrast to Starbucks contraction:

"Don Fertman, director-development for the sandwich shops, said there's now about one Subway for every 13,800 people in the U.S., although some markets, such as Philadelphia and Boston, are "under-served."

He said he thinks Subway can take the ratio to one restaurant for every 12,000 people in the U.S. while revving up growth overseas, where it now has 8,000 outlets.

A major factor helping Subway sprawl is its low overhead.

The shops don't need room for large kitchens, so there are outlets in hospitals, appliance stores, a smelting plant and even a church where the pastor wanted to provide job training for neighborhood kids.

Subway is also the largest chain within Wal-Mart."

And now for the opposing view, from forlorn Subway blogger at BMM:

"As you might guess, I am dealing with gross encroachment. 

I have successfully fought off three previous attempts, but have recently lost the battle over a proposed Walmart site.  I

will spare you the rest of the particulars since, the fact is, I am aware that I signed an agreement, and thus understand that, on my single issue at least, I appear to have no further recourse.

I am embarrassed as I realize, for perhaps the first time, exactly what my franchise agreement is all about. 

I thought it was about me going into business.  I understood, of course, when I signed the Franchise Agreement that there was the possibility of competition from within, but I was not deterred by it. 

Probably the biggest reason is that I took the statement with "a grain of salt."  I had faith in my practices, and the term "compete" did not connote negativity for me. 

Further, despite the warning, the likelihood of DAI [Doctor's Associates Inc., which is the corporate name of the Subway sandwich chain] seeking to compete with me seemed almost absurd.

Logic dictated that DAI needed my business to succeed as much as I did--so why would they compete with me?"

Why indeed?

Full post as published by Misleading Advertising Law on July 23, 2008 (boomark / email).