Question

Entrepreneur magazine annually publishes a ranking of the Top Global Franchises. Provide a list of the top 15 companies that pursue franchising as their preferred mode of international expansion. Study one of these companies in details, and describe its business model, its international expansion pattern, desirable qualifications in possible franchisees, and the support and training the company typically provides.

Answer 1

The top 25 companies that pursue franchising as their preferred mode of international expansion from the Entrepreneur's annually published ranking of top global franchises.

McDonald's

7-Eleven Inc.

KFC US LLC

Pizza Hut LLC

Subway

Kumon Math & Reading Centers

RE/MAX LLC

Dairy Queen

Hilton Hotels and Resorts

Keller Williams

Interim HealthCare

Anytime Fitness

H&R Block

Novus Glass

Ace Hardware Corp.

Subway's Business Model

After its inception in the year 1965 at Denmark, Subway chain became the 3rd largest fast food chain in the world after McDonald’s and KFC. Fred De Luca, the owner of Subway Chain was only 17 years old when he started running his restaurant business. After its foundation in Connecticut, where it is headquartered the first Subway restaurant was opened after nine years.

Fresh submarine sandwiches called 'subs' are offered to its customers. Moreover, customers have the say in how they wanted their sandwiches to be delivered. Its slogan is “Eat Fresh” that tells us that Subway chain uses only freshly baked bread and fresh ingredients. There are more than two million different sandwich combinations. Healthy and light subs can be enjoyed in Subway

restaurants as well. This fast food chain offers sandwiches, which contain only sixgrams of fat or less. Subway strategizes to be among the top 3 restaurants in every market it serves. Subway has a development team who helps the new entrepreneur to provide assistance in opening and running a Subway restaurant within a new market.

International expansion pattern

Most of the Subway restaurants are located in North America. The second largest amount is situated in Europe, United Kingdom. Africa is the continent with the least restaurants.

Doctor's Associates Inc. (DAI). DAI owns the

operational business concept and trademark of Subway restaurants. From this organization, the franchisee buys the right to operate with the Subway concept. During a two-week training, Subway provides the new franchisee with the required information.

Qualifications and Disqualifications:

Subway does not select the countries it enters into but the locals of the country who choose the place for their Subway Restaurant. The franchisee can buy the rights to run a Subway franchise according to Doctor’s Associates Inc contract.

The Subway for a chain of this size has a very low fee charged.

Subways franchise fee:

$15,000 (Local currency) in the United States & Canada,

$12,500(Australian) in Australia,

$10,000(US dollars) for all other international countries (including Denmark)

Subways disqualifies and franchisee who intervenes or try to alter operational business policies and trademark of Subway restaurants or if the Subway Chain's registered country or franchisee's country forbids otherwise to enter into any contractual terms with each other.

Support and Trainings

Subway provides the tools and knowledge to allow entrepreneurs to successfully compete in the quick service restaurant (QSR) industry worldwide.

Subway provides an on-job training of 20 hours, which is accompanied by classroom training:

80 hours. Additional Training available in Australia, China, Germany, India, Montreal, Canada & Miami. Number of Employees Required to Run: 8 - 12

Fundamental ideas of Subway can be identified by the key words:

Simplicity: Subway has an easy-to-run operation.

Support: Subway has systems and information resources to assist the

franchisees.

Control: Subway teaches methods to help run the business efficiently.