Subway - Eat Fresh

[Desertexile]

Hello Folks,

What do you think of Subway and the whole eat fresh concept?

Personally, I rate Subway and the marketing campaign they have set up to target Thais is pretty dam_n good, though I reckon it will take time to get Thais hooked into bread - then again, 10 years ago the same could be said for Cheese and Pizza and there are 100s of Pizza Co restauarnts now.

No question though, just now, the main customer base is Farangs. There are braches in the following locations: All good spots with a good traffic I think.

• Sukhumvit Rd. 3 stores at Sois: 7/1, 23, 33.
  
• Silom Rd between Sois 2&4.
  
• Siam Paragon
  
• Near Khao San Rd.
  
• Impact Arena Convention Center
  
• Nichida Thani (near the American School) Dream World Amusement Park
  

What about these areas as possible new locations: Which do you think would see some healthy Farang traffic?

• Siam Square
  
• MBK Shopping Center
  
• Sukhumvit near Soi 39, 55, 103
  
• Silom Rd near the Oriental Hotel, Satorn Rd
  
• Central World Plaza
  
• Suriyawongse Rd
  
• RCA Avenu
  
• Pratunam area
  
• Emporium Shopping Center
  
• Any other shopping centres you think would work?
  
• Any other locations you think would work?
  

Cheers!

[cynthialee]

what their campaign?

a fat somchai who eats subway and loses a lot of weight?

Edited July 9, 2008 by cynthialee

[wasabi]

I have tried to get my girlfriend to try every type of food, Italian, Indian, Mediterranean and various Farang offerings. The only one she likes outside of Thai food is Subway. She doesn't like McDonald's or KFC.

I am a big fan of Subway as well. My one complaint is the veggie patties are often frozen and a quick heat in the microwave doesn't thaw them properly, they end up tasting like cardboard. As far as locations to expand I have no idea the only reason my girlfriend went there was based on my recommendation. A Subway franchise owner might want to stress that you truly can lose weight eating their sandwiches and do a chart comparing the calories to other popular fastfood venues.

[Samuian]

Trying to save a lot of money?

With a marketing/location/positioning Survey for new franchises to be opened?

[Desertexile]

Trying to save a lot of money?

With a marketing/location/positioning Survey for new franchises to be opened?

Or perhaps just a potential franchisee gaining some input as this is, afterall, a board to discuss potential business ideas.

So Samuian - any input?

[popshirt]

I am a fan of Subway also, although I am not sure....but I think....they have been scrimping a bit on the meaty portion of the sandwiches lately. Maybe trying to cut costs or because of inflation. Anyway I still eat there often, I like the one in Silom. My other favourite for healthy 'n fresh is Au Bon Pain. Their Arizona chicken sandwich is very good and never disappoints, and I think their lemon iced tea is the best in town.

[Firefan]

From a biz point of view I think that Subway makes a lot of sense. No real cooking taking place so less investment than in full restaurant/fastfood things. Side dish is a bag of crisps and a coke (and/or cookie) so easy to keep on stock.

Having looked at the nos presented to my it looks like a healthly 25-35% margin/profit.

I also frequent them quite often - generally taking the 69 Baht sandwich of the day, which gives me a chance to try some of the ones I might not normally try out.

Tip: for a Thai make sure to ask for extra caprihinjos! (the green chillis).

Ask Sunbelt for a presentation pack and info as Greg own several Subway himself.

Cheers!

[chivo]

do your research, and get info from unbiased sources.

while i do like to eat there sometimes, i have read stuff that claims as far as franchises go, it is the worst deal for the franchisee compared to other restauants. the fee's and requirements are seemingly not very favourable...

[farang555]

where do u guys get yr numbers?

25-35% profit margin for a subway? i thought only mom and pops shops made that much.....lol.

[NotNew2You]

Yeah, Greg L. at Sunbelt is the guy to see for a Subway franchise. He was basically the guy who brought it it to LOS a few years back. He and his partners have half-dozen of more of the existing locations. He may even be the master franchise owner for Thailand.

[kyb789]

OK. I have to give respect to Subway for their great marketing and expansion campaign. They have basically cornered the sub-sandwich market. But personally I think they are the worst. For you Americans....Remember Togos? What every happened to that market giant? They packed their sandwiches so full of meat you couldn't fit the thing in your mouth. It would be dripping on the table. Now there was a sandwich I would drive miles to buy.

[dotcom]

I only remember Schlotzky's. A friend bought a store in Texas.

[johnnyk]

The one at Suk 7/1 must be a gold mine with lots of falangs ravenous after a vigorous workout at the Eden gym just up the soi!

[Desertexile]

I am a fan of Subway also, although I am not sure....but I think....they have been scrimping a bit on the meaty portion of the sandwiches lately. Maybe trying to cut costs or because of inflation. Anyway I still eat there often, I like the one in Silom. My other favourite for healthy 'n fresh is Au Bon Pain. Their Arizona chicken sandwich is very good and never disappoints, and I think their lemon iced tea is the best in town.

Thanks for the comment - it seems that folks either like it, really like it or can't stand the place.

[Desertexile]

From a biz point of view I think that Subway makes a lot of sense. No real cooking taking place so less investment than in full restaurant/fastfood things. Side dish is a bag of crisps and a coke (and/or cookie) so easy to keep on stock.

Having looked at the nos presented to my it looks like a healthly 25-35% margin/profit.

I also frequent them quite often - generally taking the 69 Baht sandwich of the day, which gives me a chance to try some of the ones I might not normally try out.

Tip: for a Thai make sure to ask for extra caprihinjos! (the green chillis).

Ask Sunbelt for a presentation pack and info as Greg own several Subway himself.

Cheers!

Hi

Some great comments, thanks. Yep, plenty of GCs for the Thais! I agree regards the start up costs. I think a profitable branch will be placed on good business skills rather than an in-depth knowledge of the catering industry, so easier to staff also.

Im not sure about Greg owning stores but the materfranchisee isn't Sunbelt or Greg, its an American gent.

[Desertexile]

do your research, and get info from unbiased sources.

while i do like to eat there sometimes, i have read stuff that claims as far as franchises go, it is the worst deal for the franchisee compared to other restauants. the fee's and requirements are seemingly not very favourable...

The fracnhise fees seem pretty good to me though.

Edited July 11, 2008 by Desertexile

[Samuian]

So Samuian - any input?

Yep, : STAY AWAY from Chaweng Beach Ko Samui - here is one in operation already - don't know about it's feasibility...though..

[Desertexile]

So Samuian - any input?

Yep, : STAY AWAY from Chaweng Beach Ko Samui - here is one in operation already - don't know about it's feasibility...though..

There's always room for two, isnt there

[Sunbelt Asia]

Hi

Some great comments, thanks. Yep, plenty of GCs for the Thais! I agree regards the start up costs. I think a profitable branch will be placed on good business skills rather than an in-depth knowledge of the catering industry, so easier to staff also.

Im not sure about Greg owning stores but the materfranchisee isn't Sunbelt or Greg, its an American gent.

Well I'm an American not sure if I'm a gent though. Mike Allan is the Development agent for Bangkok. Subway does not sell master franchises.

If you purchase a Subway you do not have the rights to a certain territory. Subway does not have "regional managers", but does have "development agents" a.k.a. Michael Allan. Development agents' "sole mission in life" is developing their given markets/territories. There have been some unhappy franchisees when stores were opened close to their existing store and sales were negatively impacted. However, this is not the norm. It depends on the DA. Most DAs are very conscious of their existing franchisees. DAs have contracts with Subway's parent company, Doctor's Associates Incorporated. Per their contracts, they must maintain a certain level of sales average in the market. Therefore, they can't just go putting Subways on every corner to meet the development numbers they need. They have to be smart in their development. Saying that, they just had a Subway approved to be put a block away from our existing Khao San Rd location. They claim we will not be negatively affected but time will tell.

Bread Aroy Co., Ltd owns 6 locations in which my wife owns 2 shares, a friend owns 1 share and I own 6 shares. I just bought additional shares bringing my total to 6 shares several weeks ago. The shareholder invested $25,000 and I paid him $77,250 per share. He invested around 5 years ago so a 40% return per year is not shabby.

Food costs is much higher in Thailand as we pay 50% import cost on turkey, steak, roast beef and meatballs from Australia. The approval committee for Subway has never found a factory in Thailand that has the gold standard so they require the distributor to import it. We have food costs on average around 40% (we have food cost of 58% on roast beef, meatballs, turkey) In the States they have food cost around 29%. Subway is very strict on food safety and the quality of the product so even though its 11% higher food cost than a franchisee in the USA, we must eat the costs.

Rent and electricity is much more expensive in Thailand than the USA or Australia. The average rent there is 6% on the gross and our average is 10%- 20%.

The only big advantage is labor costs where we average around 12% and in the States its 25-30%.

The annual Sunway Convention in Vegas just ended this week which I attended and many of the franchisees in the USA have had record sales and record profits because of the increase volume. It was literally off the charts. Nobody seems to have less than 20% increases and most had 30-40%. Some had 100% increases in growth. Pretty uplifting to see so many happy faces in a recession where Starbucks is closing 600 stores and to see Subway expanding.

Based on reports we get our 6 stores are on the low side of the average volume sales in the States and sad to say a number of the other franchisees in Thailand our half of what we do in volume sales. Our unit sales are very high compared to the average in the States even close to the best multi unit owner stores in the States but we are not close to their sale numbers. The reason why in the States these stores do double in sales than us.... they sell many more foot longs and we sell much more 6 inches. We have the same amount of traffic but many of our guests are spending $2.00- $3.00 while in the States its $5.00 + the drink. The drink and chips sells much higher in the States as well versus Thailand. Average Franchisee nets 20% in the States and makes USD80K per year. We net 9% and make USD30K per store.

If you find an excellent location and are a good owner, you can look to make a return of 30%-40% ROI. If you find a bad location or a bad owner, look to lose money. Because some franchisees unfortunately are losing. Even in the States, some lose but the majority do well. That’s why Subway has 29,500 stores and is growing everyday.

www.thailandsubway.com

[surface]

Excellent post Greg. I have no desire to own a franchise yet I still found it all very interesting.

I may have an idea as to why you aren't selling many foot longs. I couldn't find prices for them at the Soi 7 location, at least not where I'd expect them to be coming from the states where they are usually right next to the 6" price. I don't eat there frequently at all, but stopped in a few days ago to grab a foot long tuna but only saw the price of the 6" on the board. Deciding I was better off with the 6" i just asked for a tuna, but the waitress asked me if I wanted the foot long so I caved even though I didn't know the price. Many people may refuse though as they may not understand what the waitress is asking or don't like to order things where the price is not clearly listed.

While you're in a sharing mood, do you mind letting us know how the Subway fares against that Taco joint of yours across the street?

[Lucifer]

Don't do it.

Work for Subway for 6 to 12 months, understand how it all works, and then open a similar looking/working one yourself.

Keep all the profit instead of giving most of it away.

[surface]

Don't do it.

Work for Subway for 6 to 12 months, understand how it all works, and then open a similar looking/working one yourself.

Keep all the profit instead of giving most of it away.

Make sure you go back home first, unless you want to spend 6 months working your ass off for 5,000 baht/month.

[Sunbelt Asia]

Excellent post Greg. I have no desire to own a franchise yet I still found it all very interesting.

I may have an idea as to why you aren't selling many foot longs. I couldn't find prices for them at the Soi 7 location, at least not where I'd expect them to be coming from the states where they are usually right next to the 6" price. I don't eat there frequently at all, but stopped in a few days ago to grab a foot long tuna but only saw the price of the 6" on the board. Deciding I was better off with the 6" i just asked for a tuna, but the waitress asked me if I wanted the foot long so I caved even though I didn't know the price. Many people may refuse though as they may not understand what the waitress is asking or don't like to order things where the price is not clearly listed.

While you're in a sharing mood, do you mind letting us know how the Subway fares against that Taco joint of yours across the street?

Thank you.

Good point. I'm going to be putting the foot back into the foot long.

Subway is 8% royalty and 3.5 % marketing fee. Sunrise Tacos will be charging in the future 6% royalty and 2% marketing.

What are you buying when you acquire a franchise? The name, system and the advice of the management staff. If we open Joe's Sub Shop, no one would know who we are. The name and knowing the company requires good vendors is very important to many people.

www.thailandsubway.com

www.sunrisetacos.com

[johnnyk]

...What are you buying when you acquire a franchise? The name, system and the advice of the management staff. If we open Joe's Sub Shop, no one would know who we are. The name and knowing the company requires good vendors is very important to many people.

www.thailandsubway.com

www.sunrisetacos.com

Seems to me the Subway name would also be an asset when dealig with suppliers, maybe not discounts but better service as they may feel you wil be around long after Joe's is kaputt.

[farang555]

take a chance greg. get subway to sell fritos and chheetos

[Sunbelt Asia]

take a chance greg. get subway to sell fritos and chheetos

I think I have enough Fritos from the convention to do that for a day. Lays was giving away free samples and I was not shy. Never saw Fritos in Thailand. I'll look into it. I like your idea.

www.thailandsubway.com

[wolfmanjack]

OK. I have to give respect to Subway for their great marketing and expansion campaign. They have basically cornered the sub-sandwich market. But personally I think they are the worst. For you Americans....Remember Togos? What every happened to that market giant? They packed their sandwiches so full of meat you couldn't fit the thing in your mouth. It would be dripping on the table. Now there was a sandwich I would drive miles to buy.

The subway in my home town was like that but i have not been their for 10 years. I am not sure it they cut back on the meat or not.

[MaximumSecurity]

I will agree with the pro-Subway advocates. I was involved with several international fast-food franchising corporations a couple decades ago, trouble shooter for a couple and even Franchise Sales Executive for one in the UK.

Buying a franchise has so many advantages over trying your own start-up especially in a place like Thailand. Subway has many advantages over almost all others, especially those that involve extensive cooking of any sort.

But if you're serious, expect to work a lot of hours managing it yourself for at least the first three or four years. Subway will give you the knowledge and training you need but if you think you can do it for a few months and then hand it off to someone else while you count the money, you may have some problems.

Edited July 27, 2008 by MaximumSecurity

[Sunbelt Asia]

OK. I have to give respect to Subway for their great marketing and expansion campaign. They have basically cornered the sub-sandwich market. But personally I think they are the worst. For you Americans....Remember Togos? What every happened to that market giant? They packed their sandwiches so full of meat you couldn't fit the thing in your mouth. It would be dripping on the table. Now there was a sandwich I would drive miles to buy.

The subway in my home town was like that but i have not been their for 10 years. I am not sure it they cut back on the meat or not.

For the myth that Subway has cut back on their meat, it is just that a myth. Our food costs are not at 40% because of veggies, its the meat.

Subway has lots of meat in their subs. Just watch when they put it on your sub. If you want more meat just ask for the double meat option. For me, when I try double meat, it’s just way too much; the sandwich takes better without so much meat. I like crunch of the veggies and the meat rather than eating a loaf of ham. You get the combination of flavors then with still a very good portion of meat.

But if you're serious, expect to work a lot of hours managing it yourself for at least the first three or four years. Subway will give you the knowledge and training you need but if you think you can do it for a few months and then hand it off to someone else while you count the money, you may have some problems.

Well said. Subway has been ranked the #1 franchise system by Entrepreneur Magazine for 17 straight years. Even with that track record does not mean you as a franchisee will not have to work in the store at first. Once you have a good management staff and they emulate you, you can put in less hours. For all of our locations, my wife puts in less than 20 hours a week. But at first it was 60-80 hours a week.

On a different note, if you are looking for Subway to deliver anywhere in Bangkok with out a markup in price. I was just informed today that we are #1 in sales out of 80 other restaurants by Chefsxp.com You can go to www.chefsxp.com/subway.

www.thailandsubway.com

[kyb789]

OK. I have to give respect to Subway for their great marketing and expansion campaign. They have basically cornered the sub-sandwich market. But personally I think they are the worst. For you Americans....Remember Togos? What every happened to that market giant? They packed their sandwiches so full of meat you couldn't fit the thing in your mouth. It would be dripping on the table. Now there was a sandwich I would drive miles to buy.

The subway in my home town was like that but i have not been their for 10 years. I am not sure it they cut back on the meat or not.

Subway has lots of meat in their subs. Just watch when they put it on your sub. If you want more meat just ask for the double meat option. For me, when I try double meat, it’s just way too much; the sandwich takes better without so much meat. I like crunch of the veggies and the meat rather than eating a loaf of ham. You get the combination of flavors then with still a very good portion of meat.

Oh, please. Just stack a Subway sandwich next to a Togo, Blimpi's, or any other sub-franshise sandwich in America. Easy to see that Subway is just a veggie sandwich with a slice of meat. I can see them put the meat on in a small pre-wrapped paper package. I only complain because I like a meaty sandwich. Nothing against Subway for those who like a veggie sandwich.

Edited July 27, 2008 by kyb789