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Some Partners Team Up to Build Subway in a Big Way


At least five independent franchisees of US fast food restaurant chain Subway have got together to form a combined entity and are jointly talking to various private equity players to raise funds for expansion in India.

Their aim is to take a larger bite of the eating out industry that is gradually beginning to show signs of revival. Subway has about 560 stores in India.

half that of rival Domino’s. Unlike Yum or Domino’s which operate through one or two Indian partners, Sub-way has followed a structure of multiple franchisee partners in India. The company appoints ‘development agents’ who either directly run clusters of stores or sub-franchise stores to smaller partners. As such, the chain has close to 300 franchisee partners in India. Some operate single stores while others are multi-store. Within the Sub-way system, even existing franchisees have to sign new deals for every single restaurant that they operate.

M&A and PE advisory firm Lodha Capital Markets is working with the franchisees on fundraising.

“Our franchisees do work with banks and other financial institutions to seek finance and expand their footprint,” Subway India country head Ranj it Talwar said in an email, responding to ET’s request for comment. “We are excited that our franchisees are confident to reinvest and continue to grow our brand further.”

Talwar said the chain’s 560-plus restaurants in India are spread over more than 70 cities and that it hopes to open 120 more outlets in new locations this year. The chain, which started operations in India in 2001, has largely been focused on metros and other big cities. With over 44,000 outlets in more than 100 countries, Subway is the world’s largest independent foods chain, and has overtaken McDonald’s globally in terms of store count.

Gurpreet Gulri and Chetan Arora are among the top development agents of Subway in India, while Dabur promoter Amit Burman’s Lite Bite Foods is among the smaller partners.”The restaurant industry is witnessing cautious optimism; the downturn of the past few years seems to be over and the numbers of listed players have begun showing that,” food retailer Tasanya Consulting promoter Samir Kukreja said.

Source: Economic Times

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