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!