Roger Bull| Florida Times-Union
Subway is now officially the largest restaurant chain in the world. The company passed McDonald's in the United States in 2002 but it has now passed it worldwide.
Subway had 33,749 restaurants worldwide at the end of last year, according to company reports, and McDonald's Corp. had 32,737. McDonald's still leads in revenue, $24 billion last year to Subway's $15.2 billion.
But the sub sandwich chain keeps adding more locations. One of Subway's advantages is that it can go almost anywhere, said spokesman Les Winograd.
"We don't have any real requirements as far as space, it's minimal as far as equipment," he said. "We're in convenience stores, movie theaters, car dealerships."
Among the 295 stores in the district that stretches from St. Augustine into Middle Georgia are two stores in ShandsHealthcare in Gainesville, one at the in the Trane air-conditioning plant in Vidalia, Ga., and a seasonal restaurant at the Splash Water Park in Nocatee.
Subway has a franchise fee of $15,000, and Winograd said the total startup costs for a new restaurant range from $84,000 to about $280,000, depending on size and location.
By contrast, the McDonald's website says that company's new restaurants charge a franchise fee of $1,012,200 to $1,840,000 with owners required to pay 40 percent of the cost in cash and able to finance the rest.
Rich Dillon, director of operations for Subway Management Group, which owns 12 Subways in Jacksonville, said his company spends about $180,000 to open a new location.
The company is in the process of building a new one at Dunn Avenue and New Kings Road that will open in about six weeks.
His company's stores average eight to 12 employees, take in $8,000 to $12,000 in gross per week and take about three years to turn a profit.
Dillon said stores in his company are seeing a 17-18 percent increase in revenue over the same time last year, in part due to the addition of breakfast.
Winograd said the simple equipment keeps cost and space down.
There's no fryer, with its expensive exhaust system, and the meat arrives already sliced. Subway's home state of Connecticut requires that anyone operating an electric slicer be at least 21 years old.
"Slicers are a huge safety issue," Winograd said. "That allows us to hire high school kids."
Even adding breakfast didn't require additional equipment. Eggs come precooked and frozen and are heated in the oven.
A report last year by CNNMoney.com analyzing loan data from the Small Business Administration found that 7 percent of the 2,300 loans made to Subway franchisees between 2000 and 2009 defaulted.
Competing sub chain Quiznos had a failure rate of 25 percent.
Chris Gentry, director of operations for Southeast Subway Development, which oversees but doesn't own the 295 Subways in North Florida and South Georgia, said that none have failed in recent years.
About 15 new stores opened in the region last year, he said, "But it's getting harder and harder to find new locations."
roger.bull@jacksonville.com, (904) 359-4296
