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Management Excellence Award: Chain and Commercial Operator

Subway Restaurants Franchise World Headquarters LLC, Milford, Conn., and Independent Purchasing Cooperative, Miami, Fla.

01/01/2013

Subway Restaurants Franchise World Headquarters LLC, Milford, Conn.
Total Units:
38,000 worldwide
Countries Served: 100
Equipment & Décor Staff:
5

Independent Purchasing Cooperative, Miami, Fla.

Units Served: 27,000 North America
Equipment & Décor Staff: 4

With 27,000 restaurants to serve in North America, the equipment and décor team at Subway Restaurants’ Franchise World Headquarters (FWH), Milford, Conn., and the franchisee-owned Independent Purchasing Cooperative (IPC), Miami, Fla., say good, timely communication is essential.

“It’s challenging to work in a franchise environment,” says Frank Buffone, equipment and décor manager at FWH. “We have 38,000 bosses, but we see our role in helping all those stores and the company achieve their goals as part of what makes our job so rewarding.”

While the equipment and décor team at FWH is responsible for setting specifications for all the equipment, smallwares and other hard goods in a Subway restaurant, IPC sources all those products and negotiates contracts with suppliers. Both groups focus on franchisees as both their “bosses” and customers.

“One of the biggest keys to our success in equipment,” Buffone says, “is that we listen to our restaurant owners and make sure we understand what they need.”

Communication is a big part of that. In addition to Subway to Subway, the company’s weekly newsletter, Subway president Fred DeLuca holds regular calls with unit managers and regional reps and sends targeted e-mails about specific projects to select franchisees. Both the Subway Restaurants’ and the IPC’s websites give franchisees access to a wealth of information, as well.

The FWH equipment team holds monthly calls with unit operators. They discuss equipment or operational problems that present opportunities to improve existing equipment or to consider new equipment.

“We are always looking to improve the equipment and make it better and we are always working with vendors to analyze new means to do this,” says Ed Degnan, Subway’s senior equipment specialist. Energy, life-cycle and product testing all factor into the process.

IPC does the same thing. “There’s a lot of transparency in communication across our system,” says Brad Davis, director of equipment purchasing for IPC, “from us to headquarters to manufacturers. Our franchisees have direct communication with manufacturers’ service organizations and with us, too. It’s not unique in the Internet age, but it’s something to which we pay a lot of attention—making sure everyone is in the loop.”

Making all that communication flow smoothly takes teamwork, and that’s where the relationship between FWH and IPC—and even manufacturers—really shines.

“We really work as a team,” Davis says. “We have a great working relationship with headquarters. We have a standing weekly call with our counterparts in Connecticut, and we work against a set agenda to keep projects moving forward, but we all have each other’s cell phones if we need to touch base. The entire team has been together for at least eight years, so we know who works best in specific functions on each project.”

The equipment and décor package in Subway stores is fairly simple, but the team rarely stands still. With feedback from that many restaurants, the team at both FWH and IPC are constantly evaluating performance, lifecycle costs, reliability and durability of existing equipment. And they’re always looking for better ways to do things from an operations standpoint, which could affect equipment.

“Here at FWH, we focus a lot on operational efficiencies and what the Subway customer wants, to speed up ordering and get sandwiches out,” Buffone says. “Our focus on equipment is on continuous service and support to make sure we keep all the equipment in good working condition.”

From both an operations and a reliability standpoint, even long-time suppliers have to stay on their toes. “Many Subway suppliers have been with us for 30 years,” Davis says. “They’ve grown up with Subway, and we’ve become more important to them. We see them as partners, and have established a certain amount of trust, but they also know they have to earn our business every day.”

“Our long term relationships with vendors stems from the fact they know our business and we know theirs,” Degnan adds. “Their ability to meet tight timelines on tests and projects is a key to our successful relationship with them.”

One of Subway’s shelving suppliers, for example, heard that franchisees had little space for training Sandwich Artists, let alone a place to house the “University of Subway,” a computer unit used for training, company communications and back-office bookkeeping. It built a compact, NSF-approved shelving unit specifically designed to hold a computer with locking cabinet for files and a space for a DVR.

Manufacturers also are given the opportunity to display their products at an annual Subway trade show attended by 3,000 or more franchisees.

All the data on equipment—warranty information, service calls, equipment life, breakdown frequency and type, etc.—has been compiled on a single site called ServiceNet. The franchisee resource includes training and operations manuals, too, so stores have a single place to go when they need any information on a piece of equipment in their operations.

“I’m a big fan of the service and warranty component,” Davis says. “It really keeps the relationship alive between the manufacturer and the end user, not just the service agent and end user. It builds brand loyalty.”

That’s important both to Subway and its suppliers. “Our equipment doesn’t change a lot or very often,” Buffone says, “but if we offer an optional piece of equipment to our franchisees and 3,000 units take it, that’s a bigger order than many chains could offer.”

All it takes is teamwork and communication.


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