Subway: Coming Soon to a Niche Near You


Sep 03, 2006

Who has the highest number of franchise units in Canada? If you said McDonald’s you guessed wrong. It’s Subway, with 2168 outlets compared to 1,375 for McDonald’s.

According to the Wall Street Journal, one of Subway’s secrets to success has been its ability to adjust, to set up shop in non-traditional places – churches, hospitals, kosher, schools, convenience stores, WalMarts, Home Depot and more.

Here are three reasons to consider on why Subway is better placed than its competitors to fill every nook and cranny.

  • Lower initial investment required: ($75,000 USD in up-front investment vs. McD’s $200,000 USD in just “non-borrowed personal resources”)
  • Aggressive at seeking out non-traditional locations and organizationally aligned Subway created a division in early nineties dedicated “to scout nontraditional locations and help prevent cannibalizing restaurants in fully built-out markets."
  • Designed for simplicity. Subway “has an easier time opening in unorthodox spots because it has a simpler kitchen than traditional fast-food restaurants that require frying and grilling equipment.”

McDonald'''s is still the largest global chain (31,000+ restaurants employing 77,000 Canadians). Now Subway (26,401) has to discover the secret to its domestic success and learn to apply it better abroad.