SUBWAY® South Africa: Building a Lean Machine

The word lean has come to mean different things to different people. Lean has clear dietary connotations, whilst a manufacturer will immediately think of operational efficiency. At SUBWAY® South Africa, both meanings are a work in progress, as the world renowned sandwich maker firmly entrenches its values into the nation’s culinary conscience.

124SUBWAY® began life in Connecticut, USA, in 1965, as an idea and partnership between Fred Deluca and Dr Peter Buck, as a means to help Fred pay for his college tuition. The idea of ownership has of course multiplied hugely since then, morphing into the global giant that exists today.

The franchise concept is also very much alive and kicking and began its South Africa venture back in 1997. With 17 stores currently trading, SUBWAY® South Africa has undergone some key operational changes since September 2011, when Debbie Martins joined the company as Area Development Manager for sub-Sahara Africa.

At that time we felt that we needed to continue to ensure consistency in operations and the brand and we took a step back to reassess the strengths and weaknesses of the individual stores. The result was implementing stringent systems and controls and further focus on store specific training – as with all successful companies, we are always striving to improve our processes,” Martins recalls.

I think it is imperative that we grow in conjunction with the global brand and today our supply chain and distribution is much improved,” she adds, all of which makes for a leaner, more efficient operation in each store.”

If operational efficiency is one aspect of SUBWAY® ambitious growth plans in sub-Sahara Africa, then marketing plays an equally essential role. Martins says that early last year the company embarked upon its first national advertising campaign in South Africa, which proved an unmitigated success.

Marketing takes place on two levels: the international SUBWAY® brand will provide an overview of the business, while individual store owners are then encouraged to market on a local basis. Martins says that the latter approach is critical to the success of each branch, which may have a different customer demographic to the others.

We are currently running a new WOW campaign which is a cost-effective offering, the campaign has been running in Gauteng for the past three months and has just commenced in Cape Town and Durban and will run until the end of March, The campaign is a Sweet Chilli Chicken Sandwich offered at R 15-00, which is a flavour that appeals to the local palette and is also priced at everyday affordability for everybody. This will bring customers to the front door and it is then up to the franchisee and their staff to up-sale and promote other food and drinks, and keep customers coming back for more” Martins explains.

Much of the advertising has utilised newspapers and successful flyer drops and leaflet distribution close to each store. Martins says that flyers keep customers up to date with what is happening at store level and the branding aims to assist stores to build sales and profits at store level. Partnering with the correct suppliers is paramount to operations success, says Martins;

In January last year we switched our baking supplier to Riches, who use a SUBWAY® approved recipe for their bread. The focus is continued development and consistency in supply to all stores with technical support offered when required at store level. Each of our suppliers, from meat to sauces, are selected to SUBWAY ® requirements and play a large part in the continued success of the brand.

We are constantly working towards better supply quality and our goal is to be in line with the US Gold Standard rating. Part of this success is the influence of competitive pricing when sourcing in volume.

Our distribution company orders supplies and the franchisees will place their orders directly, but as one would expect, all of our suppliers have to meet stringent standards of hygiene, quality and reliability before they become approved.”

Martins indicates that the brand in South Africa is constantly striving to enhance technology in stores, and that the new point of sales system will be put in place during 2013 which will assist franchisees with further stringent reporting structures to monitor return on investment, success of campaigns as well as make the integration of on line ordering a possibility.

SUBWAY® South Africa also takes into account local flavour and preferences, with chicken, a confirmed favourite in South Africa, one of the main priorities for Excellent Meat and SUBWAY® are too constantly develop alternative flavours and combinations that can work for our customers’ tastes. Martins suggests that the local palette enjoys a variety of different flavours and these are spread across market and country options, some of these flavours are Chicken Mayo, Chicken Tikka and Perri Perri Chicken.

Martins reveals that the company is currently in talks with a supplier and will be trialing a new breakfast egg Pattie during February: “This will enhance our breakfast sales, and the consumer can watch out for some egg-citing breakfast campaigns.”

Training new franchisees is always a top priority and each new owner is sent on a training course for two weeks at one of various training centers across the world, where they receive an overview of the whole business and gain invaluable on the job training in a live store.

The SUBWAY University provides interactive international training and includes a sandwich artist course, training courses for management and for persons in charge (every store has to have a person in charge or manager in addition to the franchisee). The course runs for two weeks and the University provides ongoing training and shares valuable experience and networking opportunities with other franchisees from around the world at regular intervals through sonexis conference calls.

SAM_0236All new members of staff are trained for between one and two weeks, gaining work experience in one of the South African stores, where they learn about customer service, sandwich making and importantly food safety and store hygiene. Of course in this type of business training is ongoing, and the staff are always busy learning new things using one of many training materials available to them at all times.

Each store operates with a team of between six to eight employees, who are typically a combination of full and part-time. Each owner is encouraged to provide incentives for hitting performance targets each week. One of these targets includes cleanliness of the store as well as sales targets and Martins says that SUBWAY® has a relationship in place with a local company called Ecolab, who provide washing, sanitizing and pest control services throughout the country, helping to maintain cleanliness in stores at all times.

Every aspect of cleanliness is considered and we have a motto at SUBWAY®: “If there is time to lean, it is time to clean”,” she explains.

The stores have been strategically located in the main shopping malls across South Africa, maximizing proximity to potential customers. Once the brand is more established in South Africa, the company may look to other Non Traditional locations such as theme parks, hospitals, petroleum companies and office parks.

Across the whole Sub Saharan Region, franchisees have grasped the opportunity to work with an international brand, but working at shop floor level, for a global company, can have its frustrations, as Mahmood Panju, owner of three SUBWAY® stores in Dar Es Salaam, Tanzania, explains:

There are lots of day to day challenges,” he reflects, “human resources is a big one, it can be hard to find the right people to train as English is not the first language in Tanzania and there can be a language barrier. I have been able to retain a lot of my staff though which helps.

We also have issues around the supply chain and there are restrictions here on importations which can be a problem, however we have worked with head office to overcome a lot of these challenges and we do plan carefully,” he continues.

It is partly through the efforts of store owners like Panju, that the SUBWAY® brand has risen from obscurity to become a household name in Tanzania and he was involved from Day One, when the company decided to launch here. Dar Es Salaam now boasts six stores, with marketing conveying SUBWAY® as an affordable meal option:

We have just started our first national advertising campaign and our ‘Sub of the Day’ campaign is due to commence in the first week of February and will incorporate billboards, radio spots and flyers.

Local advertising is done through our own funds and we will promote special offers, while employees will wear promotional tee shirts. The 26th January will be the 13th anniversary of our first store opening, we have come a long way since then and we will be celebrating this milestone.

Whilst marketing has proved successful, local knowledge is an important ingredient to a successful franchise and Panju is acutely aware of income limitations for prospective customers. He says that marketing support from head office has been extremely helpful:

We are lucky to be able to draw on their expertise and our employees have access to the University of SUBWAY® online, while the monthly checks carried out ensure we meet SUBWAY®’s standards. Overall though it has been a great experience to own a franchise of this caliber and I enjoy being a hands-on operator.”

For Bashier Amien, who has owned three stores in the Cape Town area over the last couple of years, enthusiasm and ambition are limited only by corporate development of the region:

We have amazing potential for growth here in the Western Cape and focus on enhancing the turnaround time to get orders on the water and a quicker clearing time at the ports in South Africa.

My main priorities each day are to bake fresh bread in the morning, to ensure fresh supplies have been delivered and that we provide excellent customer service each day. Supply chain has improved a lot and is rarely a problem, although during peak periods like the Christmas season, suppliers tend to close down and it can be difficult to maintain sufficient fresh stock given our limited storage space, so we have to approach each season with careful planning.

Our head office does provide us with a lot of support and help with marketing. The region’s growth largely depends on the correct partnership between SUBWAY® and a development agent for the Western Cape”.

Development Agents are however very much in the mind of Martins, who has already appointed two DAs, covering Kenya and Gauteng Province. The DAs will work closely with individual franchises, to recommend better operational processes and to help with marketing and will report directly to Martins.

There is the prospect of further DA’s covering areas all 12 territories across South Africa, Zambia and Tanzania. This will help SUBWAY® respond to the needs of its franchisees more effectively and efficiently.

Whilst South Africa may never attain the status of North America and Europe in terms of volume of stores, SUBWAY® continues to grow, as Martins confirms:

For 2013 we are aiming to open another 22 stores in South Africa, 3 more in Kenya and another 5 between Zambia and Tanzania. We will also be looking at the possibility of opening up Mauritius for further development in the latter half of 2013.

Our focus for the year ahead is to partner with the right franchisees who have the passion and drive to help us to continue to grow the brand from strength to strength. We are only as strong as our team of franchisees and joining SUBWAY® and creating a successful franchise can be both exciting and rewarding. We look forward to a productive year ahead with a strong focus concentrated on marketing and delivering growth in stores by building sales, profits and stores.”