Subway Analysis

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Subway and The Challenges of Franchising in China

Subway's History
Subway's first appear was in 1965, Connecticut, United States[1]. This company was found by Fred DeLuca and Peter Buck in Bridgeport[2]. And it is famous by its foot long and 6 inch submarines sandwiches. Right now, Subway become the world largest submarines sandwich franchise operation mechanism. End of January 1st 2011, Subway have 33,749 branches which exceed McDonald's 32,737 branches became the world largest single brand fast-food franchise chain mechanism[3]. Subway's Development in China

Subway first march to China was in 1995. Right now there are over 1000 branches in China's major cities[4]. Subway first branch was opened in Beijing by Jim Bryant. At beginning, he lost money to a scheming partner and failed to develop other branches. All in all, it was not doing well at the beginning. However, during 10 years development, it became a successful fast food brand in China, and been well known. Subway in China

Subway decide to open in China need face to many difficulties. The biggest one is how to protect its own intellectual property. In China, there have not formed a perfect intellectual property system yet. For example, KFC and Pizza Hut were the companies take the lead in doing business in China. However, they all struggling in property protection[5]. Since branding is important and can create customer loyalty, every company do not want their trademark been embezzled. On the contrary, in China, KFC and Pizza Hut's trademark and products been copied without permission and these copycat does shared their market. If Subway want to protect itself from previous example, it need to engage with strong, reliable partners. Also have a strong contract to restrain both side. Even thought China have a weaker contract law compare with United States, it still may help a lot. Also Subway need to create a specific logo for itself, that logo need have strong characteristics, because that's...
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