In contrast, Subway is owned and operated by the private company Doctors' Associates Incorporated. The McDonald's brand is much more valuable than that of Subway despite both companies ranked among the world's most valuable brands , according to Forbes, up to , when Subway was dropped from the list.
Regular, open publication of the company's financials improves its access to capital which, in turn, provides more opportunities to strengthen the company's brand, a key factor behind its continued strong financial results. So, it seems that brand value alone does not explain the difference between the chain size of the two companies. Investment and Capital Resources.
For established companies such as McDonald's and Subway, franchising is one way to expand rapidly with minimal risk to the parent company. Both companies use franchising in their business models but to different extents. All Subway stores are franchised. The company itself does not own any Subway restaurants.
Expertise gained from operating company-owned outlets enables parent companies to improve the operating standards of the whole franchise chain. At the same time, the existence of company-owned stores in McDonald's business structure places certain restrictions on its expansion capabilities. For example, a conventional franchise agreement supposes that the parent company owns the land and the building or secures long-term leases for its restaurants.
This requires more capital, which can limit the ability for expansion at the rate of other chains, like Subway. Fee Structures. We have already discussed that the business models of both companies are focused on franchising. A franchise license is an authorization granted by a company to an individual that enables the franchisee to maintain control over purchasing, employment, pricing, and marketing decisions.
To secure a franchise license, the franchisee pays a set of fees to the parent company. The franchise fees to open a new McDonald's restaurant are much greater than that of a Subway restaurant. Thus, Subway is much more affordable for small entrepreneurs. Geographic Segments. While the preceding factors speak to why the number of Subway locations exceeds that of McDonald's, the data reveals that McDonald's, with stores in countries, has a broader geographic representation than Subway, which has stores in countries.
In addition, in some countries, the number of McDonald's restaurants exceeds that of Subway, particularly in China and Japan as well as Europe and South America. Full access to 1m statistics Incl. Single Account. View for free. Show source. Show detailed source information? Register for free Already a member? Log in. More information. Supplementary notes. Other statistics on the topic. Profit from additional features with an Employee Account. Please create an employee account to be able to mark statistics as favorites.
Then you can access your favorite statistics via the star in the header. Profit from additional features by authenticating your Admin account. Then you will be able to mark statistics as favourites and use personal statistics alerts. Save statistic in. XLS format. PNG format. PDF format. However, Subway is anything but. So what happened? Announcer: Subway's famous giant foot-long sandwiches are made right before your eyes, the way you want 'em.
Len Van Popering: What was so compelling then and still is today about Subway is really an open-kitchen format. In many ways, they really pioneered that and the ability to customize your sandwich. Narrator: The brand redefined fast food with fresh ingredients that customers could see.
Compared to other fast-food chains at the time, it felt healthy. And it worked. By , there were locations across the US, and soon after, Subway went international.
Joel Libava: In the late '70s, and in the '80s, and in the '90s, everyone knew about Subway. I mean, they were everywhere. They're still everywhere. Narrator: That's Joel Libava, an expert in franchising. While each store looks and smells the same, they're all independently owned franchises.
Libava: The format is pretty simple. You buy a franchise, you get trained, they help you secure a location. They help with a grand opening, and you're open. You're open for business. Follow the several-hundred-page operating manual, do the advertising, and customers will come in.
Narrator: Not only were Subway franchises successful, they were, and still are, one of the cheapest chains to franchise. Because Subways were easy to open, the number of stores skyrocketed. Between and , store locations rose from 5, to 13, Subway's success continued into the early s. It is the largest single-brand restaurant chain, and the largest restaurant operator, in the world. R List. By foodist Updated views.
Categories: World General. Interactive Chart. Chart 1: Top 10 countries with the most Subway outlets.
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