Metro changes US development plans

Subway is on a multi-year journey of transformation, and the next step is to change the US development strategy.

The world’s largest sandwich chain announced on Thursday that instead of being a development-driven organization, it will become an experience-driven organization, which means space optimization, revamped restaurants and transition to multi-unit operators.

“Subway was built with expansion in mind, which has helped us become one of the world’s largest fast food restaurant brands,” Steve Rafferty, senior vice president of development, said in a statement. “Today, we are strategically focused on the quality of our restaurants over quantity, and are looking for franchised restaurants for sophisticated, multi-family owners who can help provide a consistent, quality guest experience.”

The brand has spent the last few years reducing its presence in the US Subway, a 100 percent franchised concept, ending 2021 with 21,147 stores domestically, down 3,650 units from 2019. It is still the largest restaurant chain in the US. in terms of restaurants, followed by Starbucks and McDonald’s.

To optimize growth, Subway is partnering with franchisees and using a data-driven approach to ensure stores meet specific market needs and are in the right location and format, including cross-cutting and non-traditional.

At the same time, the brand continues to revamp its outlets with its “Fresh Forward” design, which includes LED lighting, new flooring, containers, tables, colors and chairs. To date, about 9,000 apartments have taken part in the reconstruction program. Over time, Subway will improve the format and layout to better meet customer needs, such as adding prep and pick-up areas dedicated to digital orders.

In addition, to improve its franchisee profile, the company is actively inviting restaurateurs across multiple divisions to buy out existing operators who are looking to retire or sell.

“Historically, Subway has been a system of mostly one-restaurant operators,” Rafferty said. “These operators – often aspiring business owners and aspiring entrepreneurs – have always been an integral part of our growth strategy and they will continue to be an important part of our brand strength. At the same time, to ensure our competitiveness for years to come, we are expanding our partnerships with high-end franchisees who bring operational experience, development opportunities and capital.”

The new strategy comes almost a year after the fast food brand launched Eat Fresh Refresh, the biggest menu update in its history. More than 20 updates – 11 new and improved ingredients, six new or old sandwiches, and four refurbished signature sandwiches – hit stores across the country in July 2021.

With this implementation, Subway beat its 2021 sales forecasts by almost $1.4 billion and achieved its highest AUV since 2014. Three-quarters of the system, or more than 15,000 outlets, in 2021 grew 7.5% in the same store compared to the previous year. 2019. In the first quarter of 2022, in the same number of stores, prices increased by 8.2% compared to three years earlier.

Outside the US, expansion accelerated. Over the past 10 months, Subway has signed eight master franchise agreements for nearly 5,000 properties across Asia Pacific, Europe, the Middle East and Africa, and Latin America and the Caribbean. This includes a deal with private equity firm Everstone Group to open more than 2,000 locations in South Asia, which Subway called one of the “largest master franchise agreements in the history of fast food restaurants.”

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