Feldman points to four areas that have been critical to Subway’s success: product, control, simplicity, and support. The brand’s ability to adapt and grow while maintaining simple and consistent operations has helped make it ubiquitously appealing while allowing it to go places other fast food chains can’t, for example, YMCA’s, school systems, colleges, universities, and hospitals.
“If you’re a food service director in a hospital, you’d say, ‘Why would I bring a McDonald’s into the lobby when our whole message is about health?’ Feldman says. “And then when you look at other competitors and they’re still back in the 80’s as a sandwich concept with some increasing regard for things like calorie count and health message because they have to be, because the public demands it.”
But Feldman says that it’s the last pillar — support — that’s played the biggest role in the company’s success.
Before the company’s development agent model, support for restaurant locations typically came from corporate employees. Now that’s changed to where franchisees have a local team to back their success anywhere in the world.
“When you live the community you have someone that’s a phone call away,” Feldman says. “It’s not calling the corporate office and saying ‘Hey, I need help when can you send somebody down?’…as opposed to somebody who could be there that day. And that’s why Subway has been so successful. We have boots on the ground in every single city in the U.S. and now in 102 countries around the world. So if I have a problem, I am there and being supported.”
The company also has one of the lowest franchise fees in the country, which Feldman says points to the profitability of the concept. Rather than making the money on the sale of franchises, the company makes money off of the profitability of the stores that it helps succeed. Having all four pieces — product, control, simplicity and support — is really what’s allowed Subway to “build a better mousetrap” than competitors in the marketplace, Feldman says. During the worst economy, Subway’s numbers are staggering. It’s achieved continual upward increases in customer base, marketing and advertising and average unit volume.
“These are all things that are basics, but I think over the years we’ve really forgotten those basics,” Feldman says. “Now more than ever, now that people are really concerned about their dollar and where that goes — you need to show them that you are the best, that you bring the best value to them, and you are there for them if there are issues.
“For us it really is a Cinderella story, in that we were very different then than we are now. When I went to college the only choice was a foot long sub. The menu was very limited. There probably were about eight sandwiches. Now, Subway has become more of the healthy alternative. We have morphed into the concept where everyone can go to get their lunch, their dinner and now their breakfast.”
The Feldman File:
Name: Larry Feldman
Title/Company: CEO, Subway of South Florida
Title/Company: CEO, Subway Development Corporation in Washington, D.C.
Born: Brooklyn, New York
Education: B.A., University of Bridgeport, J.D., Brooklyn Law School
What would you do if you weren’t doing your current job?
Be a lobbyist in Washington, D.C.
What would your friends be surprised to find out about you?
I cry at sappy TV commercials and movies.
If you could have dinner with one person you’ve never met, who would it be and why?
President Clinton. His caring and concern for the world and its people is admirable.
What do you to regroup on a tough day?
I watch a great action movie.
What do you do when you’re not working?
I spend time doing anything with my family.