Exploring Franchising - Research Paper Example

Exploring Subway as a Franchise and its Franchisee Opportunities Jennifer Reed The researcher is interested in becoming a franchisee with one of the fastest growing fast food outlets around the world. Subway was selected as the preferred franchise of choice. In order to augment this decision a mini feasibility study was carried out in the proposed area of the new franchise. This study included start-up costs, market share and present competition. The researcher is particularly interested in this concept as it proves to be cheaper than opening up a business from scratch and going through the phases of establishing the brand.

Why build it from scratch when you can start from half way up? In addition, once you agree to franchise with Subway, you are offered extensive training and continuous support on how to own and operate your business to ensure constant profitability. Being a franchisee can come with a lot of benefits such as; benefiting from a successful business plan, taking advantages of unified advertisement programs and lowering risks associated with kick-starting a business. This paper further dictates the steps associated with becoming a franchisee with Subway and the benefits of being a franchisee with that said company.

Exploring Subway as a Franchise Subway one of the biggest sandwich hut mogul of all time is really popular in the franchising industry. With reference to its international website (Subway.com, 2011) Subway has over 34 000 locations in 96 countries. The brand ‘Subway’ started branching out in 1984 when it opened its first restaurant outside the US in Bahrain. Since then the Subway concept has grown globally with restaurants in Argentina and Zambia. The secret to Subway’s global success has to do with its offered franchisee opportunities.

A franchisee is an entrepreneur who buys a franchise from a franchiser. A franchise is a business, usually with a proven business plan, unique methodology or excellent market share, which is sold to independent operators, (Business Q and As, n.d.). One of those examples is Subway. These independent operators pay an upfront fee which may range from a several thousands to a couple millions as well as an annual royalty. In return, franchisees receive training, marketing support, supplies, access to special assistance or financing and other benefits.

Before purchasing a franchise, it is essential that you carry out your background study on the franchise you wish to partner with. For example, you wish to partner with Subway- ask yourself these questions; do I have what it takes to run a business? Am I qualified to run this kind of business? Will the business be profitable? Who are my competitors? Where am I going to run this business? Do I have adequate start-up capital? Once you have answered these questions and the responses are mostly positive you are ready to become a franchisee and build your franchise. . Subway has provided some simple steps on how to become a franchisee with them.

First up is getting a franchise kit. This franchise kit provides future franchisees with franchise opportunities only, once you complete the form which can be obtained online from their homepage. The next step is to complete the franchise application form; the form may be described as a personal, financial and educational background questionnaire. After that, it is required that you review the disclosure document; therefore you may become aware of the terms and conditions under which you may become a franchisee with Subway.

Once the application is approved, Subway will provide you with the necessary training and concepts needed to run your own Subway restaurant. The starting capital for subway franchising ranges from 101, 000 to 285 000 in the US and includes franchising fee and the operating expenses for the first three months (subway franchising business guide, 2011). The starting capital will also depend on the size of the food service establishment, location, equipment and its scale of operation. Once the franchised restaurant is established, entrepreneurs/franchisees are required to pay subway royalty fees amounting to 8% of their gross sales for the whole year.

In exchange for the 8%, entrepreneurs are rewarded with training programs and operation manuals, store design guidance and access to publications. Be a franchisee with subway-and you are on your way to being your own boss……