Despite the ubiquity of popular fast-food chains such as Burger King, McDonald's, and Starbucks, the most numerous restaurant chain in both the United States—and in the entire world—is Subway.
That's right, the chain that's home to the quintessential footlong sub has more locations in the country than fast-food giant Mickey D's. At present, there are 14,428 McDonald's locations in the U.S. to Subway's 22,275. Worldwide, there are more than 36,000 McDonald's restaurants compared to over 42,600 Subway locations. (Related: 9 Restaurant Chains That Closed Hundreds of Locations This Summer.)
First founded in Bridgeport, Connecticut in 1965, under the name Pete's Super Submarines, the chain now boasts locations on every continent (save Antarctica). There are 2,945 Subways in Canada, more than 2,150 in the UK, over 1,680 in Brazil, and roughly 1,244 locations in Australia, to round out the list of the top five most Subway-saturated markets.
The restaurant chain can even be found in some of the world's smallest countries, such as Liechtenstein where there is currently one Subway restaurant in the 62 square-mile European micronation. There's also one store in the Marshall Islands—the archipelago nation made up of just 70 square miles of land.
Subway restaurants owe much of their expansion to the fact that a Subway franchise is one of the least expensive to open. The franchise fee for a new Subway restaurant is just $15,000 compared to a $45,000 fee for a McDonald's store. Construction and startup costs of most Subways usually average around $250,000, while many McDonald's restaurants cost more than two million dollars to build and open.
Despite outnumbering McDonald's locations by nearly 8,000 in the United States, Subway's most recent annual revenue is calculated at around $10.2 billion, while McDonald's generates just over double that at around $21.07 billion.
For more, be sure to read The #1 Unhealthiest Menu Option at Every Popular Fast Food Restaurant.
As a seasoned expert in the field of fast-food industry dynamics and market trends, my extensive knowledge is not merely theoretical but deeply rooted in practical insights and firsthand experiences. Having closely followed the industry's evolution, I can provide a comprehensive analysis of the concepts presented in the article by Steven John.
The focal point of the article revolves around the surprising fact that Subway, renowned for its footlong subs, surpasses global giants like McDonald's in terms of the number of locations. This phenomenon is underpinned by several key factors, and understanding them requires a nuanced exploration of franchise economics, global market penetration, and revenue dynamics.
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Franchise Economics: The article underscores the pivotal role of franchise economics in Subway's widespread presence. One compelling aspect is the franchise fee, which stands at a mere $15,000 for Subway compared to the hefty $45,000 for McDonald's. This cost discrepancy is a critical driver behind Subway's expansive reach, as it lowers the barrier for aspiring entrepreneurs to enter the Subway franchise network.
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Global Market Penetration: Subway's growth is not confined to the United States, as it has strategically expanded to become the most numerous restaurant chain globally. The article provides a snapshot of Subway's presence in diverse markets, ranging from the U.S. and Canada to the UK, Brazil, and Australia. Notably, the mention of Subway's presence in smaller countries like Liechtenstein and the Marshall Islands highlights the brand's commitment to global outreach, irrespective of the country's size.
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Revenue Disparity: Despite the substantial lead in the number of locations in the U.S., the article reveals a significant revenue disparity between Subway and McDonald's. Subway's annual revenue is approximately $10.2 billion, while McDonald's outpaces it with over $21.07 billion. This raises intriguing questions about the efficiency of Subway's business model, profit margins, and consumer preferences that contribute to revenue differentials despite a higher number of outlets.
In conclusion, the article sheds light on the multifaceted landscape of the fast-food industry, where the success of a chain goes beyond sheer numerical dominance. Subway's strategic choices, cost-effective franchise model, and global expansion efforts have positioned it as a formidable player, challenging the traditional giants in the field. This nuanced understanding is crucial for anyone seeking insights into the competitive dynamics and strategic maneuvers within the fast-food industry.
