Subway, the classic sandwich franchise, is moving into the future one foot(long) at a time
By Daniel McIntosh
Whether you know it as a grinder, hoagie, hero, or torpedo, one sandwich franchise stands out for its platonic ideal of a submarine sandwich in a convenient, handheld, low-stakes, high-flavour package.
Now with more than 37,000 locations worldwide, Subway stands tall as one of the world’s largest quick service franchises. The brand has even taken over the seas and the skies. There are Subways as far as Alaska, and at different points the brand had units in a church, on a cruise ship, and on a blimp. The company entered Canada through St. John’s, Newfoundland, in 1986, and the growth hasn’t stopped, with more than 2,800 locations across Canada. Subway’s Canadian presence is so pronounced that today, at any given point, Canadians are at most four kilometres away from the nearest franchise.
But how did a humble sub shop outgrow its Connecticut roots, and after nearly 40 years in Canada, how does the brand move forward?
The first slice
Subway’s story begins in 1965 with Fred DeLuca, then 17 years old, trying to scrounge up tuition money ahead of his first year in college. He consulted a family friend, Dr. Peter Buck, who convinced him to start a sandwich shop. His advice came with a gift: $1,000 in investment funding. Pete’s Subway, as the brand’s first iteration was named, opened shortly thereafter in the shoreline community of Bridgeport, Connecticut.
A lot has changed since that first location opened its doors nearly 60 years ago. Twenty-one years after its launch, the brand entered Canada, and since then it’s gained even more ubiquity. Now the brand is reintroducing itself, with new flavours, designs, and a new way to order for the next generation of consumers who are meeting the brand in new and exciting ways.
The early days were not without challenges. When Buck and DeLuca revealed their concept, they emerged into an arena of cold-cut sandwiches—a product so simple that the competition seemed endless. They needed a way to tweak their offering into a unique standout. One notable way was by investing in a speedy toaster that set the hot-and-ready subs apart from the competition.
By 1974, DeLuca and Buck were full-fledged partners with 16 locations between them. That year, they turned the business into a franchise, spelling the first wave of success for the emerging brand.
For today’s internal staff, like managing director Courtney Hindorff, it was franchising that turned the duo’s modest growth into exponential success. “Together with our franchisees—thousands of entrepreneurs and small business owners dedicated to delivering exceptional experiences for our guests worldwide—Subway has become one of the world’s largest quick service restaurant brands,” he explains.
But although the company’s growth was as fast as its service, its sandwiches delicious, and its stores successful, Subway faced the growing pains of a growing brand. Along with the widespread pandemic-related decline of recent years and other challenges, Subway had a long way to go to earn new customers and draw back old customers, and Hindorff has been instrumental in the brand’s novel changes over the last few years.
New menus, new look
In 2021, Subway launched a multi-year strategy to improve its food and guest experience through menu innovation, restaurant modernization, and digital and international expansion.
Take, for example, the Subway Series, launched in 2023, which Hindorff says is the biggest menu overhaul in Subway Canada’s history. With it came a radically updated menu, building on its fan favourites by drawing from global flavours, with international-inspired sauces, proteins, and toppings. Guests at Subway locations can now partake in a Tandoori Twist, a Cuban Crunch, or even a Nashville-Style Hot Chicken. In addition, a new name and number ordering system brought the build-your-own ordering process into the digital age.
In many ways, Subway faced the same challenges as any other food brand in the aftermath of the pandemic: rising food costs, labour issues, and a customer base less willing to part with their hard-earned dollars—no matter how accessible the offering. So, the brand adapted by boosting its online ordering and delivery systems to remind customers of the brand they know and love.
“We’ve continued to double down on online functionality, which is a priority for our business and guests, and we’ve seen great success,” says Hindorff. “Digital sales were up by double digits globally in Q1, compared to the same period last year.”
The brand even launched a loyalty program, Subway MVP Rewards, which has grown to more than 37 million members in North America in just nine months. Finally, Subway met customers where they were financially, introducing value-driven promotions and menu innovations to win back old customers and make fans out of new ones. “We also focus on quality and affordability, ensuring we stay accessible for Canadians,” explains Hindorff.
Furthermore, the brand began to optimize in-store labour and food costs by improving staff training and sourcing toppings and ingredients from the Independent Purchasing Cooperative, a franchisee co-op established in 1996, to procure equipment and suppliers at cost-effective prices.
“By leveraging collective buying power and expertise, Subway franchisees also enjoy a low-cost initial investment, scalable concepts, extensive growth opportunities, and in-market support and resources, [along with] Subway’s flexible footprint and ability to operate almost anywhere—in addition to our low operating costs and initial investments,” says Hindorff.
The whole idea is to make it easy for prospective franchisees to join the fold and share the good with their neighbourhood. Hindorff notes that the ideal Subway franchisee is guest-oriented, entrepreneurial, passionate about the brand’s crave-worthy products, and eager to create a great experience for guests.
“In our search for franchisee partners, we’re drawn to individuals who embody the essence of hospitality and possess keen business acumen, ready to embark on a journey of growth with us.” It doesn’t hurt to have a background in foodservice and hospitality as well, with experience owning previous restaurants or franchises.
A strong franchise foundation
Franchisees like Kam Dhanda have answered the call. In 1992, freshly after immigrating to Canada from England, Dhanda stopped by San Francisco, California, where his family owned a Subway franchise. He was captivated by the simplicity and the quality of the menu. “I’ve always had a passion for business, and from a young age, dreamed of owning my own,” says Dhanda. Seeing his family members actualizing her dream spurred him into action. “I wasted no time, and just weeks after arriving in Canada, I joined the Subway family.”
Dhanda opened his first location in Surrey, British Columbia, and after 32 years, he’s still with the brand, having grown steadily through the years to 32 units that he still owns and operates. He says his long-term success with the brand lies in the ability to take advantage of the social and ongoing training opportunities presented by the brand. “The introduction of the ‘University of Subway,’ a digital training app for franchisees and team members, has been particularly impactful, offering continuous learning and educational resources at your fingertips,” he notes.
Attending conferences, regional meetings, and conventions, while participating on the brand’s franchisee advisory boards, has also been rewarding. “One of the most rewarding aspects of these events is the chance to exchange insights and best practices with fellow franchisees,” reminisces Dhanda.
But franchising still has its fair share of challenges, including the influx of new competition in quick service sandwich restaurants. Hindorff says the new strategy, plus the brand’s continued international expansion, has proved highly successful at fending off evolving competitive landscapes and meeting guest preferences.
The future of footlongs
Looking to the future, Hindorff says Subway will continue to roll out modernized store remodels and enhance the in-store experience for customers. With new changes rolling out to Canada’s 2,850 Subway locations, the brand is continuing to reinforce its presence in the Canadian franchise landscape. Soon, older locations will be updated to the brand’s “Fresh Forward” model, which aims to create a modern, inviting atmosphere that reflects our commitment to innovation and quality.
And for readers in the communities that aren’t in the four-kilometre radius of a Subway shop, fear not, as Hindorff says the brand is expanding to new communities. And more supports are coming for franchise partners as well. “We’re launching programs to support our franchisees with enhanced training, innovative marketing, and evolving menu offerings,” he explains. All Subway needs is new franchisees who are bold and ready to challenge the status quo of the sandwich market.
“Feel empowered to make choices, be accountable, and infuse fun into relationships with your guests and team members,” Hindorff advises current and prospective franchisees. “Seek support when needed; don’t hesitate to reach out to Subway’s corporate team and other franchisees for advice and assistance. Sharing experiences and solutions can help overcome challenges and create a better Subway for everyone.”
Learn more about franchising with Subway
