Analysing Profitability of Opening a Subway Sandwiches Franchise

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Where is a suitable restaurant that serves fast food and has healthy options in Stockbridge? Currently, there is none of this kind of dining experience. Due to the increase in percentage of people nationwide that are trying to eat a healthier diet and run healthier lifestyle, it seems as though there is a slight niche in the market here. When this niche is contemplated, one restaurant brand immediately springs to mind that would probably best satisfy customers in the area whilst retaining a fair sum of profit is the brand named Subway’s Sandwiches.

They offer made to order healthy sandwiches with fast service and high quality. This brand is very well known in the United States and is becoming increasingly popular in the United Kingdom. There are many fatty fast food restaurants in the area, such as Franco’s and Pizza Hut but no healthy food can be bought in these two places. Subway is a sandwich making restaurant which the sandwiches are highly customizable so is made exactly to the customer’s desires.

After some browsing the Subway website, I found that it was a franchise which has many advantages and some disadvantages as well which will be looked at throughout this feasibility study. Stockbridge is a small area with one main street which mainly consists of tertiary sector small retail stores and many housing area around this central street. The retail stores bring consumers into the area with cash to buy goods with and some of this money will be spent on meals while the consumer is out of their home.

The surrounding area is largely residential so those residents may become regular customers and visit often due to the ease of getting to the restaurant from their homes. The age distribution is looked at in the graph shown in the Appendix of age of people in Edinburgh against the percentage of population. The graph is unimodal and shows that the greatest population lies between the 25 to 34 year old category. This graph is analysed more when looking at the consumers.

The success of the project can be measured by profitability of the branch in the first year of the opening. This time scale is adequate because it will allow for time for customers to become regulars and for the brand awareness to spread. A whole year is needed to measure the success of the store because as the seasons chance, so do people’s habits so there will be fluctuations in consumer spending patterns, for example right before Christmas when lots of people will go out to buy presents they may also buy a sandwich while they are in the area so sales may increase.

Objectives: Without objectives any firm will fail. Objectives are usually the firm’s targets but they are written out in such a way so that they are SMART (specific, measurable, agreed, realistic, time measured). The main objective is to create a feasibility study into the profitability of setting up a branch of the Subway franchise in Stockbridge.

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