Everybody agrees that nowadays time is like a commodity and cannot be wasted. It consumes a big value in people’s lives. And in order to avoid time wasting, people dedicate less and less time for their meals. This doesn't mean, however, that quality isn't being required. People look for quick, nutritive, healthy, low-price and tasty meals. That is why the fast-food market is getting so competitive. The fast-food companies are increasingly pressured to get some competitive advantage.
Looking at this scenario, McDonald’s started to commercialize salads, apples, wraps, juice and etc. But let’s face the truth: none of these are natural. Even the apples are full of preservatives. Burger King hasn't implemented any natural choices yet and the healthier option on their menu now is the chicken burger. In this scenario, Subway has emerged in the past years.
In 2010, they've become the biggest fast-food chain of the world, with over 33,000 restaurants. Having a Subway is not exactly the same as having your healthy homemade meal, but it’s one of the closest options we have out there on the streets. It takes about two minutes for your sandwich to be done, you get to see (and choose) the salad and there are really low calories options. The fast-food market today is definitely favorable to Subway.
On the other hand, Subway’s stores tend to be small, so the profit in each store is not so big. Although McDonald’s has fewer stores, their revenue is bigger. So if you’re planning on investing in a fast-food franchise, Subway may not be the most profitable choice. According to Forbes, in 2013 their average store revenue was estimated on $481,000 per year. On that year, the food franchise with largest return on investment (ROI) was Chick-fil-A, with an annual revenue of over $3,000,000.
Besides the size of the stores, creating natural and healthy food is always more expensive, and that’s another reason for the Subway franchise not to be so profitable. So how come they have so many stores all over the world? The answer is simple: demand. As said at the beginning, people are demanding this kind of food in the streets. We think it won’t take longer for Subway to face a tougher competition on healthy, fast and tasty meals, but until then they may keep expanding their business.