Location Rejections

I now have a complete arsenal of potential store locations at my disposal. Some are great, others good and one deliberately poor, simply to test those who say "yay" or "nay" to the potential sites.

Last week, I sent through three locations in total, two of which were turned down instantly. The third I am currently waiting to hear back on, although at the moment I can't really tell if this is a good sign, or merely a hint that they're getting agitated with my pestering them. I did get some useful feedback last week with regards to one potential spot, although on further inspection there are no immediate opportunities in this area at present.

Anyway, back to sitting and waiting!

Location Hunting

Prior to handing over the franchise fee, my development agent was very keen to push the apparantly wonderful support network offered to franchisees looking for stores. The impression I, and others, were under was that there would be a constant stream of stores being sent through from the DA office. Not the case. Infact, there have actually only been two stores sent to franchisees since October last year, and neither of those have opened yet! So, I've taken it upon myself to find the location, although the DA office still has to approve it.

This weekend I've been out and about accross West Yorkshire, mainly to look at four specific locations. Two I have completely written off, one in Bradford and one South-East of Leeds. Of the other two however, one is extremely promising. A busy suburban shopping centre location with an impressive footfall. The other is a town centre location, although has the negative of being a short walk from any parking.

I'll be sending these through to the DA tomorrow, so hopefully I'll finally be able to proceed to the next stage by the end of this coming week!

Subway's Corporate Structure.

Those involved with the Subway Franchise System will be well versed in just how Subway operate, perhaps more so than myself! For those less familiar with the business is run, allow me to explain.

All Subway stores are franchised, with absolutely none at all owned by Subway. This is just aswell really, as technically Subway doesn't even exist as a company! Doctor's Associates Inc (DAI) is the big cheese behind everything Subway, it owns the Subway trademark, brands and system and administers the network of franchisees and international offices and Development Agents.

Moving down a level, DAI have a number of international arms around the world. In Europe, we come under the jurisdiction of Subway International BV (SIBV), a company incorporated under Lichensteinian law and based in the Netherlands. SIBV also have a UK office based in Cambridge.

As we move further down, we come to quite possibly the most important link in the great Subway chain, the Development Agents. These are individuals who are not only franchisees, but also own the rights to develop the brand in a specific area. They are responsible for recruiting franchisees and supporting them once they begin opening stores. To my knowledge, the reward for performing well is 3% of the net sales of each store in the territory (taken from the 8% royalty paid to Subway) aswell as a cut of the initial franchise fee. The Development Agents must be the most controversial aspect of how the Subway system is run, not only are most competing with the very franchisees they have recruited, but it is also in their interests to recruit as many as possible, with the franchisee taking all responsibility for actually opening a store and making it a success. Common sense dictates that this isn't the best way to run a business!

Aside from these three aspects of the "System", we also have the IPC - a franchisee controlled purchasing committee, SFAFT - the franchisee run advertising fund and Subway Realty Ltd - Subway's UK real estate company, responsible for leasing stores and sub-leasing them to franchisees.

Right, I think that's enough about Subway themselves now. Next stop, what exactly am I upto!