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Subway’s Caucasus Expansion Starts with Georgia

Published: July 1, 2013 | 8:53 am
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Sesja Martin m0116

Area Development Manager at Central & Eastern Europe: “Once we will be established in Georgian market we will consider using this infrastructure for expansion to other countries such as Azerbaijan and Armenia”

The COMMERCIAL TIMES

The world-renowned U.S. fast food retailer Subway starts its expansion into the Caucasus region with Georgia. The COMMERCIAL TIMES interviewed Martin Prince, Area Development Manager for Central & Eastern Europe, regarding the company’s plans for the Georgian market.

- Why Georgia? What are the main attractions for you about this country?

- We are constantly evaluating new countries where SUBWAY® brand is not developed yet. We started to evaluate the opportunity of expanding to Georgia approximately 2 years ago. Georgia is a market with interesting opportunities, where we would like to start our expansion into the Caucasus region.

- Does Subway operate in other countries in Caucasus? Do you have some broader regional plans?

- Our priority is first to open our restaurants in Georgia. This process will take some time, as we have to first build the infrastructure for future expansion. It won’t be a definitely easy process for our new franchisees in Georgia, but at the end it might be a rewarding process for them to build their own, successful business. Once we establish ourselves on the Georgian market, we will consider using this infrastructure for expansion into other countries, such as Azerbaijan and Armenia. Today, it’s very premature to talk about our future expansion in the Caucasus.

- When will Subway open its first outlet in Georgia?

- Today we have 3 franchisees in Georgia. They are currently searching for locations where the first restaurants will be opened. The store construction process might take time, but our aim is to open our first restaurant in Tbilisi before the end of this year.

- What are the company’s 2013 plans like for Georgia?

- We are not in a rush. If we will have 4 stores operating in Georgia in 2014, then it will be a good result. As you know, all SUBWAY® stores are franchisee owned and operated. Therefore, our development speed depends on our franchisees. For example, today we already have successful franchisees from Georgia operating a large number of stores, for example, in one of the neighboring countries.

- How much will Subway invest in the Georgian market this year?

- As all SUBWAY® stores are owned and operated by individual franchisees, all the investment is also made by them. To open an average SUBWAY® restaurant costs about 120.000 EUR. Investment costs might differ, and I have personally seen stores opened for 60.000 EUR, or for several times more. There are many factors influencing it. We do have different models that we can offer to our franchisees – from regular street location stores, stores in food courts, till nontraditional models and free standing stores with drive thru.

- As for competition, how would you assess the local (Georgian) market in this respect? Why should locals choose Subway over McDonald’s or Wendy’s?

- We notice that consumers in all parts of Central & Eastern Europe including Caucasus are more and more demanding. Over the last few years, they have started caring more and more about what they eat. Our aim is to offer an exceptional product made in front of the customer. We focus on serving sandwiches with fresh vegetables, bake bread in stores at least every 4 hours, and have a wide meat selection, as well as vegetarian choices. Every single sandwich can be customized as per wish of our customer. Local consumers expect not only good food, but also good customer service and value. That is what we strive to offer. I am sure that during the upcoming years, there will be more quick service restaurant chains entering Georgia. The market has more opportunities. Then it will be only up to each consumer to decide where to eat.

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