Subway or myway?

bogwalrus

I had a meeting with subway and it all sounds really good.

I'm tempted to just take the easy route in my town by getting their franchise rather then do it my own way.

They like the location and think it will do really well.

Other positives are the support they give and the fact that they have such a strong brand.

I know many people will say not to bother and just do your own way but I find from running my current cafe business that strongly branded shops are a bit more stronger.

Just looking for some advice really.

Cheers

highlandseoghan

I suppose it really depends on how much subway take off you. Subway I feel have a very strong brand and are very popular. I know a lot of people who choose them over other places and I feel its down to there branding.

If subway dont take too much off you in royalties I would be inclined to go with them but before I did I would hop into the car and drive to other sub way stores and talk with the staff, the managers and the owners and see what they all say.

bogwalrus

It was interesting talking to them. They say they have different relationships with their franchisee's. So i can imagine the royalties might be up for negotiation?


I'm really finding it hard to make the decision.

My other option is opening a deli/shop in a different location targeting the same market which will only cost me 5k to fit but i know this won't get as much business as if i opened a subway.

its a tough one that comes down to profits and longevity really i suppose.

mneylon

A lot will depend on location.

If you setup somewhere with good footfall etc., then the brand might not matter as much
However if you can't do that then being able to use an established brand might make more sense

Subway is an internationally known and recognised brand..

bogwalrus

The location is good as its on a busy main road at a corner right next to loads of parking so very visible to passer by's who want to stop for a break. This is where i think the brand wins as people will see subway and if they are peckish will pull over etc.

This might not work if I open " boggy's sandwich joint"


There is a school, banks and a gym within meters so i think the subway brand wins again as it would appeal to all these groups whereas if I offer the same products it might be difficult to crack those markets.


It seems now my issue is the bank,

I have had a bad year of business with the current shop so my track record does not look great meaning it might effect getting the finance i need to get the franchise etc.

Gloomtastic!

bogwalrus wrote: »

The location is good as its on a busy main road at a corner right next to loads of parking so very visible to passer by's who want to stop for a break. This is where i think the brand wins as people will see subway and if they are peckish will pull over etc.

This might not work if I open " boggy's sandwich joint"


There is a school, banks and a gym within meters so i think the subway brand wins again as it would appeal to all these groups whereas if I offer the same products it might be difficult to crack those markets.


It seems now my issue is the bank,

I have had a bad year of business with the current shop so my track record does not look great meaning it might effect getting the finance i need to get the franchise etc.

Subway might lend you the money, I'd say they're desperate to get people signed up! Be careful how much you pay up front though, it could kill you....

highlandseoghan

What sort of competition is around the location you have?

If your offering good quality food at affordable prices school kids would go to you regardless of the name above the place. I also feel if your offering good value a lot of workers will come to you.

I enjoy subway but wouldnt have it very often as I feel the price is quiet high for what you get but there is a independent operated deli i go to that offers great service good food and is very popular.

Shakti

obviously best of luck with your business but subway could be immeasurably better and more popular if they improved the quality of the bread,

arbitrage

I would be very interested to know the details of a subway franchisee. There was a busy Subway in Temple Bar that shut down a few months back so they could be charging a lot for the name but beyond that it appears as if the business runs itself and the staff costs are minimal.

The bread is far ahead of those cuisine de france roll in the average deli.

One major flaw I find with those delis is they try to squeeze an extra day out of the rolls and lose a customer that gets stale bread who may have bought 100+ rolls a year.

bogwalrus

I made a call to subway in Charleville which would be a 90% similar location to where i am setting up. They employ 4/5 staff and are very very busy.

My competition is a very poorly run supervalue deli, chipper and one or two small country town cafe's.

I would estimate 3,000 vehicles pass through my town daily and I am based on the road very visible with easy pull in parking. There is schools, gym and banks within meters of location.

I think its a no brainer and already 25% done with the change over so hopefully the financial side works out with the bank.

A big decision but i think the subway brand is the way to go and I think it will be a long term business for me.

Thanks for the advice above. It really does help getting feedback=)

bogwalrus

On the cost's front it seems it will breakdown as follows:

50k for fitting the shop

10k buy in fee

12.5% royalties per week on the gross less vat.

OU812

That's 12,000 subs before royalties, rent or anything else. 34 a day, every day, before the cost of ingredients.

arbitrage

I assume you have to buy all the ingredients from selected suppliers who will probably be charging over the odds. What is the gross profit on a footlong meatball sub?

On the positive side your location sounds ideal.

I have noticed these days that schoolkids are bringing more packed lunches to school or going for just a bag of chips or a e2 deli roll so it may be worth your while doing a bit of research to see what percentage of schoolkids are spending e6 on their lunches these days especially in slightly more rural areas.

There is also the issue of there being typically small numbers of seats in subway restaurants (10-15) and in the winter when its raining these seats may be occupied by the same group for the duration of lunch making potential customers reluctant to go to your restaurant as they don't particularly want to have to eat their sub outside and if they have to go back to the office to eat they may as well bring a packed lunch to save time and avoid spending their lunch surrounded by screaming teenagers who may only be taking up seats without buying anything to spend lunch with their friend who is spending e4 on a 6" and making it last 45 minutes.

the groutch

that is a limiting factor of the franchise, that you have no choice on what to sell.
with your own business you'd have the choice of doing certain cheaper options for the schoolkids (they'd be giving you guaranteed business 160-180 days a year)

Zascar

the groutch wrote: »

that is a limiting factor of the franchise, that you have no choice on what to sell.

Yeah but that's kind of the idea - and the benefit - of buying a franchise. It's a proven model. They've spent years getting the business model right - you just do what your told and you've got a far better chance of success. I can't remember the exact stats but if you start your own business you've got about a 50% chance of still being around in 3 years- if you buy a successful franchise that chances to more towards 90% chance..

bogwalrus

They are doing a €4 lunch at the moment. I can't imagine the profits being that large though but it seems they target quite a few groupings.

If the numbers add up i suppose and they seem to for me anyway but i need my accountant to give the final look over.

Gloomtastic!

If you going down the myway route. Make sure you invest heavily in design and a good bit in marketing.

Image is everything with food retail. If it looks professional on the outside then people will try you. Then service, quality and value for money will determine whether they return or not.

If it looks cheap and tacky then people will go where they know.

capefear

Having been a long time fan, any town I’ve lived in over the years I always frequented the local Subway for a footlong steak and cheese, always had one at least once a week . A friend and I always joked that if we ever had money we should have taking out a subway franchise but now I’m not so sure. One town that would have been our first choice was our home town, there was a subway there for years but it closed down about a year and a half ago, yet a cafe that’s 2 min’s from the subway is still thriving. The location was one of the best in town it had access to school kids and was beside a business area and shopping centre. It would be busy most days from 12.30 – 2 and then it would be quiet the rest of the day it also had limited seating. Another Subway in a town I lived in recently had the same problem depended on the school trade and is now closed while the local cafes are still thriving.

Also have Subway changed their business model lately as I notice them in Dublin where they seem to be appearing more as an add onto an existing business like the one in baggot street or college green were it is has a counter in a londis shop. This londis shop had a deli with a long counter serving hot food and sambos and now the counter is split in two, one section is the subway section and beside it is the hot food/sambo deli. I had a footlong there and it wasn’t how I remember them.
I normally get a sambo at this londis two or three times a week and while the Deli section is busy as they do specials like any sambo and a drink €5, the subway counter is never busy.

Don’t get me wrong I always loved Subway food as mentioned above but now I find their food not as nice and very little meat actually goes into the food anymore. If I eat one now it’s very rare as they are expensive for what you get.

Subway to me will always be a place to get a quick sambo or get one to take back to the office to eat and will always do well at lunchtime, but a cafe is different in that you can always adapt and change.

Cafes if they have good food will always be busy at lunchtime, during the quite periods you can have mother and toddle meetings, or encourage local businesses to have meetings there or book readings or family meals on Sundays or special occasions or BNI meetings or early bird menus before movies etc etc etc none of the above you would do in Subway.

You mentioned that you are currently running a cafe business, how is that going for you?

As well as visiting subway business that is currently in business I would try and contact some of the subways that have ceased trading. There is a website where you can get the contact details of these. It would be good to see what they taught of the franchise.

Best of luck whatever you decide, if you do decide to go ahead with the Subway please put decent portions of meat in the sambo and I hope it works out for you.

bogwalrus

capefear wrote: »

Having been a long time fan, any town I’ve lived in over the years I always frequented the local Subway for a footlong steak and cheese, always had one at least once a week . A friend and I always joked that if we ever had money we should have taking out a subway franchise but now I’m not so sure. One town that would have been our first choice was our home town, there was a subway there for years but it closed down about a year and a half ago, yet a cafe that’s 2 min’s from the subway is still thriving. The location was one of the best in town it had access to school kids and was beside a business area and shopping centre. It would be busy most days from 12.30 – 2 and then it would be quiet the rest of the day it also had limited seating. Another Subway in a town I lived in recently had the same problem depended on the school trade and is now closed while the local cafes are still thriving.

Also have Subway changed their business model lately as I notice them in Dublin where they seem to be appearing more as an add onto an existing business like the one in baggot street or college green were it is has a counter in a londis shop. This londis shop had a deli with a long counter serving hot food and sambos and now the counter is split in two, one section is the subway section and beside it is the hot food/sambo deli. I had a footlong there and it wasn’t how I remember them.
I normally get a sambo at this londis two or three times a week and while the Deli section is busy as they do specials like any sambo and a drink €5, the subway counter is never busy.

Don’t get me wrong I always loved Subway food as mentioned above but now I find their food not as nice and very little meat actually goes into the food anymore. If I eat one now it’s very rare as they are expensive for what you get.

Subway to me will always be a place to get a quick sambo or get one to take back to the office to eat and will always do well at lunchtime, but a cafe is different in that you can always adapt and change.

Cafes if they have good food will always be busy at lunchtime, during the quite periods you can have mother and toddle meetings, or encourage local businesses to have meetings there or book readings or family meals on Sundays or special occasions or BNI meetings or early bird menus before movies etc etc etc none of the above you would do in Subway.

You mentioned that you are currently running a cafe business, how is that going for you?

As well as visiting subway business that is currently in business I would try and contact some of the subways that have ceased trading. There is a website where you can get the contact details of these. It would be good to see what they taught of the franchise.

Best of luck whatever you decide, if you do decide to go ahead with the Subway please put decent portions of meat in the sambo and I hope it works out for you.

Thanks for your response.

From what i gather some subways that close are forced to close by subway due to the management failing to meet standards.

The girl from subway said she closed two in the last month because they were serving rotten tomatoes and stretching the breads another day.

I do believe her as with all franchises if one is offering below the standard then the brand is jeopardised.

I personally had an experience a few years ago where i ordered a veg patty and it was half frozen and chewy. I went to return it and was greeted with aggression from staff. I must say i haven't really been to a subway since then. Definitely not as much as I used to have anyway.

My cafe is struggling as there are three other cafe's already in town to compete with and I am paying the most rent out of them all. Not enough cash is coming in and I would rather target a different market such as the school's and passing trade as I am on a very busy road with ideal parking to pull in to grab a quick bite.

The great thing about the Subway is that there is nothing like it in the town.

If i was to revamp my cafe instead i would need to try and get other types of groups in like the school kids ad try and get more motorist to stop in order to survive but i think this would be very difficult.

The brand image of subway is so strong and I think their product would be popular for the market I am after.

highlandseoghan

capefear suggested you talk to previous owners who had subway franchises, I think this is an excellent idea to get there opinion. It cant do any harm to see what they say. I would also drive to some of the small towns that have subways and chat to the owners / managers and see what they say about the business model.

I would strongly suggest you talk to owners and previous owners in small towns and big towns and see what they all say. The information they give could be the best advise you get. A few people have mentioned the limited seating area they have, Would you be able to provide a nice size seating area? Do subway help you at a local level on marketing a new store?

Voltex

the groutch wrote: »

that is a limiting factor of the franchise, that you have no choice on what to sell.
with your own business you'd have the choice of doing certain cheaper options for the schoolkids (they'd be giving you guaranteed business 160-180 days a year)

But is probably the point also of a franchise...they are seeling a pre-packed business model. TBH I like the idea of franchises and for some people they work wonderfullly well.

thesandeman

Totally out of my league but if it's of any help three Subways in Galway closed recently. Two were in the city centre (one beside the train/bus stations and the other just off the main street). Both of those were belonged to the same franchisee, not sure if the third one was his or not.
I have no idea of the reason but it might be worth your while checking it out.
On a personal note, the reason I don't go to Subway is that they don't do butter! It's a simple thing but I can work out what's healthy enough for myself as opposed to being told by a multinational. For that reason alone I use the local shop/deli/cafe etc.

arbitrage

I was in the Subway beside the Galway train station a few times about 4 years ago.

The meatballs were usually rock hard, the lettuce very dried out and the bread a day older than it should have been besides being on a relatively quiet street and closing just before the old boo radleys would have brought them a good few customers.

To be honest I don't see many parents giving kids e1,080 (e6 x 180) for lunch these days in more rural areas.

Running a cafe yourself you can see the huge drop off in business when the construction industry tanked and farmers are having a particularly bad year so rural eateries are in for a tough upcoming year.

sandin

arbitrage wrote: »

I assume you have to buy all the ingredients from selected suppliers who will probably be charging over the odds. .

why such a stupid assumption?

Musgraves have the contract to supply subway stores - it was done on a competitive basis to ensure LOWER prices to the franchises and also ensures 100% quality control.

All meat for Subway in europe are processed by Queally group in Naas - again it ensures quality.

Same with McDonalds (burgers made in Tipperary) and every other decent food franchise, otherwise the quaity of ingredients would vary from place to place and a bad operator would pull the entire group down.

As for the OP - look at extra sales from delivery to offices such as platters, but overall the Subway franchise seems to be the best fit for small towns due to the simplicity of the offering. If it was an A-One location and you had the funding, I'd look at the new Lavazza Franchise about to hit the market.

Icepick

since you have to ask, Subway or neither

riveratom

If it were me, I'd be going around every single possible Subway franchise I could reach, and not only talking to the management and staff, but also to the customers and people in and around the shop (subtly of course).

bogwalrus

highlandseoghan wrote: »

capefear suggested you talk to previous owners who had subway franchises, I think this is an excellent idea to get there opinion. It cant do any harm to see what they say. I would also drive to some of the small towns that have subways and chat to the owners / managers and see what they say about the business model.

I would strongly suggest you talk to owners and previous owners in small towns and big towns and see what they all say. The information they give could be the best advise you get. A few people have mentioned the limited seating area they have, Would you be able to provide a nice size seating area? Do subway help you at a local level on marketing a new store?

I was speaking to the owner of three in Limerick. He was very positive and says it's down to location really.

I'll try and get in touch with a few of the owners who closed down but that might be hard.

I could seat around fifteen in my shop but could squeeze a few more i'd say.

I would like subway to pay for advertising in the local area so its a question on top of my list.

Thanks for the advice.=)

riveratom

bogwalrus wrote: »

I was speaking to the owner of three in Limerick. He was very positive and says it's down to location really.

I'll try and get in touch with a few of the owners who closed down but that might be hard.

I could seat around fifteen in my shop but could squeeze a few more i'd say.

I would like subway to pay for advertising in the local area so its a question on top of my list.

Thanks for the advice.=)

Good call. For me it's like that guy in Limerick would say - location, location, location. If you've got the footfall to go with your globally recognised brand, then you could be onto a winner.

Glad to hear you have the seating. The lack of seating in some outlets is a turn-off for me tbh. I'd very seldom eat a Subway, but I do know that if I was thinking of going to say the one opposite Connolly station, I'd be reluctant to go in simply on account of there being nowhere to sit down.

bogwalrus

sandin wrote: »

I'd look at the new Lavazza Franchise about to hit the market.

I had a look there. I think its a bit too much for the town i'm in but looks amazing. I can imagine that franchise taking off in cork city or shopping centres replacing costa etc..

Gloomtastic!

bogwalrus wrote: »

I was speaking to the owner of three in Limerick. He was very positive and says it's down to location really.

I'll try and get in touch with a few of the owners who closed down but that might be hard.

I could seat around fifteen in my shop but could squeeze a few more i'd say.

I would like subway to pay for advertising in the local area so its a question on top of my list.

Thanks for the advice.=)

I believe, as with most franchises, that a set percentage of your franchise fee is spent on advertising. Anything over and above that figure may have to be paid for by yourself.

I would talk to the other franchisees about it.

bogwalrus

Gloomtastic! wrote: »

I believe, as with most franchises, that a set percentage of your franchise fee is spent on advertising. Anything over and above that figure may have to be paid for by yourself.

I would talk to the other franchisees about it.

Hi yes its 4.5% for advertising.

In total they take 12.5%

My guess at the moments is that i will have to pay for "extra" advertising done locally but i think there are grounds for negotiating with subway at the moment due to a number of closures in Ireland.


When subway get back to me with costs etc i will go over everything with my accountant.

If the numbers don't add up then i wont be taking on the franchise and might just keep researching.