,APAC

Subway APAC president: regional growth can match U.S. foothold

In his first-ever interview with QSR Media, Eric Foo details the chain’s expansion targets and stressed their ongoing investment in digital engagement.

Five to ten years from now, the number of Subway restaurants in Asia-Pacific (APAC) could match its 20,000-plus stronghold in the U.S., the chain’s regional president believes.

In his first-ever interview with QSR Media, Eric Foo said he currently expects the sandwich giant to have about 6,600 restaurants in the next five years, effectively doubling their current network. He specifically named China and Japan as markets with “significant, untapped opportunity.”

“Depending on how some of the plans panned out, it may actually go way well beyond that. Really, the 6,600 restaurant number is probably the low-end of our projection,” he said. “There's still a lot of money left on the table.”

Foo’s aspirations for the brand are backed by the chain’s recent expansion deals, including one Subway touted as the "largest master franchise agreements in quick-service restaurant history."

Earlier this November, Subway signed a deal to open more than 2,000 stores across India, Sri Lanka, and Bangladesh over the next ten years, working with South Asia-focused private investment firm Everstone Group.

Prior to that, the sandwich firm signed master franchise agreements in the United Arab Emirates with development partner Kamal Osman Jamjoom Group and another with PT Sari Sandwich Indonesia, resulting in a comeback after the franchise left in the mid-2000s.

Commenting on recent deals in Asia, Foo believes they have “extracted as much as we could” from the chain’s previous business model of selling franchises to individuals.

“You are basically looking at two different owners, and therefore having different individual profit motive[s],” he said. “There will be a lot more uniformity in how the portfolio of restaurants is being run in a master franchise situation.”

Foo, who is approaching his third year with Subway after key roles in The Coffee Bean and Tea Leaf, Dairy Queen and McDonald's, highlighted the brand’s “competitive advantage” in expanding, citing their ability to open in smaller footprints. Crucial, considering the new sites emerging as a result of pandemic-induced lockdowns across the region.

“The return is a lot better because the investment is a lot less,” he said. “It all depends, to a large extent, on the brand positioning so it does vary from territory to territory.”

Investing in the digital front and online engagement will also remain a priority for Subway in succeeding years, envisioning delivery, grab and go and other channels into one strategic framework to drive incremental growth akin to other traditional fast food heavyweights. 

Complementing those will be their ongoing brand collaborations and gamified campaigns through their app.

Foo also expects plant-based items to continue to have a place in the chain. Recently, the chain’s Singapore operations launched its first plant-based chicken schnitzel.

“We will continue to engage and basically look at the products that are being developed from some of these companies and customizing them so that they actually fit into the Subway format,” he said.

He also expects the supply chain challenges and labour shortages to improve in the middle of next year, expecting most governments across the region to open up once countries achieve herd immunity from the coronavirus.

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