Why Investing in Fast Food Restaurant Franchise can be a Profitable Option

Fast food restaurants have been an evergreen business opportunity. It is a vast industry that generates global revenue of over $570 billion, which is larger than the economic value of most countries.

The COVID-19 Impact

COVID has affected a lot of businesses in different ways. Some even had to shut down. But the QSR industry, though was affected majorly initially, didn’t take much time to bounce back. Food is one thing that never goes out of demand and when quality affordable food is served, it has even more demand.

The QSR consumer looks for three things, including taste, price, and quality. Restaurants focus on the consistency of the experience, affordability, and speed of service. Subway is a well-known brand in this industry and popular for its consistency, affordability, and speed.

Subway has 40,000 restaurants in about 100 countries around the world. It started its franchise in India in 2001 and currently has around 650 restaurants. The Master Franchisee taking care of Telangana, Andhra Pradesh, and Odisha is now looking for sub-franchisees.

Why Subway is the Perfect Choice for you?

There are a lot of brands in the fast-food restaurant industry. Subway has many advantages that make it more attractive than others, both for the consumer and the partners. Subway, started in the year 1965, opened to franchising in 1974. It has about 50 years of experience in the industry.

Subway requires the lowest upfront investment in the international QSR. Customers love Subway because it provides fresh food of good quality and also has nutritious and healthy food options.

There are restaurant systems in place to assist in daily operations. It provides good operational support by best in class training to all the people involved with the brand. From managers, franchise owners to business development agents, each has access to training. There is location flexibility with Subway. Marketing and promotions are done by a team of professionals. The brand owns a buying power because of its efficient team specifically dedicated to purchases. Subway has a proven track record from the past.

It has logistics systems for distribution and supply and supply world-class materials. There is in-house software for the company- POS recently installed in stores that relate to customers and shares it with CRM.

Opportunity with Subway

Subway’s Master Franchisee taking care of Telangana, Andhra Pradesh, and Odisha is now looking for sub-franchisees. It is looking for new franchises as well as buyers for existing franchises. It looks at the resale of franchises as an excellent opportunity for franchisees since it is a set business with existing customers and is easier to promote.

It is open for multi-unit franchisees. The brand is open to expansion in tier I, II, and III cities. Smaller cities have huge potential. Currently, the brand focuses on Nizamabad, Warangal, and Karim Nagar. There is standard pricing for franchising in all cities. But in small towns, the cost reduces by the lower manpower price, lease, and rent.

Franchising Terms

The initial investment required for a standalone store is Rs 65-70 lakhs and the area required is 650-700 sq ft.  For the food court format, there is an investment of Rs 45-50 lakhs and a space requirement of 400 sq ft. The food court format requires less area since it has a common food court for seating.

The franchise fee would be Rs 6,25,000 plus 12% GST for the first unit and Rs 3,25,000 plus 12 % GST for the next units. There is a royalty fee of 8% on weekly net sales.

An added 4.5% is charged for advertising. 80% of advertising charges go to national advertising and remaining for the local advertising. The franchisee is expected to set aside 2% of weekly sales towards the local promotion.

The franchise agreement is renewable and a franchisee can be sold at any time.

Brand Support

The Brand supports the franchisee at each step.

Operational Manual- It’s a manual that covers all topics important to run a business including information on human resources, guidelines, and training for restaurant members. This is a future reference manual after the training.

Operations- It has developed standards and a system of controls. There are key performance indicators to keep a track of sales and inventory.

Training- Training is provided to the franchisees and field staff at the center in Gurgaon. A two-week training program includes training in class and in restaurants. The University of Subway offers separate courses at each level online for free. The brand also provides training to identify potential locations and is responsible for approving the site. The company provides floor plans that are redrawn and certified as required locally.