Most Important Reasons to NEVER Own a Subway FranchiseApril 17, 2022
Visa Franchise clients and potential franchise investors inquiry on a weekly basis about Subway investment opportunities. As one of the most global and visible fast food brands, with over 26,000 units and a presence in over 90 countries, we can understand why individuals from E-2 treaty countries seeking to invest in a Subway franchise for an E-2 investor visa would be interested in the concept. However, after conducting a thorough analysis and due diligence we wanted to share our findings with interested individuals.
00:38 About Subway
00:58 Subway has problems
01:12 Subway’s flawed development program
01:43 Too many work hours to break even
02:20 High employee turnover
02:40 No foreign national franchisees
For more information, please review our in-depth article on the Subway Franchise: https://www.visafranchise.com/blog/subway-franchise/
Want to speak with a franchise specialist about Subway Franchise or another franchise? Click here: https://share.hsforms.com/1ZtNM19w4R8WIXyNa_97N7w4e0xw
Also, visit the profile on Subway to see how many closures they have had over the past 4 years!
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What to know about the Subway franchise?
Subway offers foot-long and other sandwiches, salads, and other food items from a retail store. Subway is a franchise concept in the Food and Beverage industry.
Detailed Franchise metrics for Subway Detailed Franchise Metrics are metrics calculated and reviewed by Vetted Biz. You can find the available metrics for Subway below. “N/A” or Not Applicable results mean that there is not enough data available to compute a precise rate or that the result is not mathematically computable. When results are not mathematically computable, you should pay attention to the absolute values (#) instead of the percentage rate itself.
Subway: Is This Franchise A Good Or A Bad Investment?
Hello. My name is Jack Findaro. I’m the finance director of Visa franchise, and one of the founders of the firm. Today, I’d like to give a quick summary of our analysis of the Subway franchise investment opportunity. Many clients from around the world have inquired about Subway and whether it’s a good or bad franchise investment, and something that’ll qualify them for an E-2, or L-1, or EB-5 investor visa.
Our opinion is quite definitively that it is a bad investment decision, a bad franchise to invest in the U.S. at this time. And there’s a number of reasons for this. A brief summary is that Subway was founded in 1965 in Bridgeport, Connecticut by Fred DeLuca and Peter Buck. Since then, Subway has become one of the largest franchises in the world, in terms of the number of units with over 44,000 units worldwide.
It’s one of the most valuable privately held franchises in the world. So a lot of people see that it’s everywhere, they’re familiar with the brand, and I think it’s something they wanna invest in. But we found a number of issues after doing our research as we’ve had a number of clients ask about this opportunity.
Subway Is Problematic To Invest In: Why?
So here are the problems. One is that Subway had a very flawed development program, is that they’ve opened up way too many units. They didn’t have territory protection. So that’s why you see sometimes where you have one franchisee or one Subway franchise, located on one corner and then down the block, you have another Subway franchise. This is a big issue for franchisees because this leads to sales cannibalization, where one store negatively impacts the sales of another store. And this decreases the sales for both stores.
As an owner or operator, Subways can require many hours for the individual. You’ve read that a number of operators are working 50, 60, 70, 80 plus hours just to break even. So as an investor, that is looking to do a franchise investment, you don’t wanna do a franchise that’s just buying yourself a job. You want to do something that you can scale that you can eventually get to a level of sales, where you can hire a manager and manage a manager and work way fewer hours and enjoy your free time doing other activities or enjoying with your family. Another difficulty in the Subway operator or Subway franchisee is there’s high employee turnover, like many food services, and businesses, there’s a lot of employee turnover. They work for a short amount of time and then they leave. And so as an owner or an operator, you need to keep finding people, constantly finding people, and train them.