- Subway signs landmark agreement to open 4,000 restaurants in China with FRS.
- The deal will increase Subway’s presence in the Chinese market seven times.
- Subway seeks to leverage its global brand and healthy options in China’s competitive fast food market.
Miami-based sandwich giant Subway announced Tuesday, June 6, the largest master franchise deal in its history: 4,000 new restaurants by Shanghai Fu-Rui-Shi Corporate Development (FRS).
The deal will be financed by a consortium of private investors, including Asia Investment Capital.
FRS will open Subway locations for the next 20 years, increasing the presence of the brand in that market seven times.
the group too will acquire the exclusive rights to manage and develop all the restaurants of the chain in that country.
The deal comes as the brands continue to drive development in the Asian giant.
Popeyes and Papa Johns, for example, have announced major expansion deals in Xi Jinping’s country, and chains like KFC, McDonald’s and Starbucks continue to aggressively develop in China.
For Subway, the announcement comes at a particularly opportune time, as the company nears a potential sale, reportedly for $9 billion, as we previously reported on Merca2.0.
The company has signed several international development agreements as it drives growth outside of the United States.
This is Subway’s 13th master franchise and development agreement signed in the past two years, representing commitments to more than 9,000 restaurants.
Subway’s sales outside the United States grew 9.5 percent last year, according to Technomic data. And the company increased the number of international units by 0.4 percent to 16,100. It is the first time in five years that Subway has been able to increase the number of restaurants in the rest of the world.
“This agreement is a milestone in Subway’s international growth and marketing strategy as we continue to focus on strategically expanding our footprint and maintaining our position as one of the largest restaurant brands in the world,” said John Chidsey, CEO of Subway. Subway, in a release.
Chidsey called China a “key market with a significant long-term growth opportunity.”
Subway and its marketing strategy
Subway said its sales have increased in China after the pandemic, driven largely by digital sales and the introduction of new menu items.
The company expects a much larger presence in the Asia Pacific region, with its number of units growing from 3,500 to 6,000 restaurants in the next five years.
Competition in China’s fast food market is fierce. However, the company has a number of advantages that could help it succeed. Subway has a strong brand strategy and a loyal customer base. Also, it is known for its healthy and affordable food.
Despite facing fierce competition, Subway has several factors in its favor. Its strong global brand recognition, proven business model, and emphasis on personalization, a good thing for Chinese consumers seeking unique dining experiences.
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