Disadvantage of franchising – Subway
Apart from the many benefits derived from the cooperation between Subway and the franchisee, which have been considered in the previous sections, there are also some disadvantages that need to be assessed.
Firstly, any bad news about Subway might have direct impact on the franchisee as the brand/trademark could be affected in the process. If the value of the brand decreases, the franchisee loses some of his/her competitiveness (Liutu, R, 2010). For example, Subway got public attention with an intensive marketing featuring Jared Fogle, a man who lost nearly 200 pounds (approximately 90kg) by going on a “Subway diet,” where he only eating Subway sandwiches (Daily news, 2013). This campaign made Subway different …show more content…
As the franchisee is using Subway’s operations systems and relies on Subway to take care of the promotion, a great deal of control is in the hands of Subway (Alon, I., Alpeza, M., Erceg, A., 2007). In rough terms, it is Subway’s way or the highway, meaning that a franchisee only has limited influence on strategic matters. Franchisee have to follow a long list of guidelines, and they have to follow them to the letter. These restrictions limit on advertising method, what franchisee must charge for the products they sell, and how much of an ingredient should put on a food product. Some people are better at following these guidelines than others, and thus are better suited to be a …show more content…
This has been a trend that applies to franchises (Salar, O., Salar, M., 2013). Each time franchisees lose an employee, they must recruit and re-train a new person according to the guidelines set up by the franchisor. Recruiting and re-training is very time consuming and high cost is needed, if this situation happens frequently it would definitely harm the franchisee’s business. In addition, the franchisor wants franchisees to keep customers happy with solid customer service and the quality of food people expect from the franchise, which may require additional training at franchisees’
Apart from the many benefits derived from the cooperation between Subway and the franchisee, which have been considered in the previous sections, there are also some disadvantages that need to be assessed.
Firstly, any bad news about Subway might have direct impact on the franchisee as the brand/trademark could be affected in the process. If the value of the brand decreases, the franchisee loses some of his/her competitiveness (Liutu, R, 2010). For example, Subway got public attention with an intensive marketing featuring Jared Fogle, a man who lost nearly 200 pounds (approximately 90kg) by going on a “Subway diet,” where he only eating Subway sandwiches (Daily news, 2013). This campaign made Subway different …show more content…
As the franchisee is using Subway’s operations systems and relies on Subway to take care of the promotion, a great deal of control is in the hands of Subway (Alon, I., Alpeza, M., Erceg, A., 2007). In rough terms, it is Subway’s way or the highway, meaning that a franchisee only has limited influence on strategic matters. Franchisee have to follow a long list of guidelines, and they have to follow them to the letter. These restrictions limit on advertising method, what franchisee must charge for the products they sell, and how much of an ingredient should put on a food product. Some people are better at following these guidelines than others, and thus are better suited to be a …show more content…
This has been a trend that applies to franchises (Salar, O., Salar, M., 2013). Each time franchisees lose an employee, they must recruit and re-train a new person according to the guidelines set up by the franchisor. Recruiting and re-training is very time consuming and high cost is needed, if this situation happens frequently it would definitely harm the franchisee’s business. In addition, the franchisor wants franchisees to keep customers happy with solid customer service and the quality of food people expect from the franchise, which may require additional training at franchisees’