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Will Franchising Ever Be as Sexy as Tech? Subway Thinks So.


Entrepreneurs are the new rock stars. But more often not, when you hear about 20-somethings dropping out of college to make it big, they’re flocking to tech companies and scrappy startups – not franchised restaurant chains. Subway is trying to change all that.

This week, the sandwich chain announced the winners of its second Virtual Subway Global Challenge. The business stimulation game allowed aspiring entrepreneurs in over 100 countries, primarily between the ages of 18 and 24, to build, train, operate and promote virtual Subway restaurants.

The underlying goal: For participants to see restaurant franchising as an achievable and desirable path of entrepreneurship.

"There are huge conferences of young entrepreneurs gathering, and they almost never talk about franchising, or the restaurant industry. They focus on high-tech," said Jennifer Kushell, founder of Young & Successful Media, the company that worked with Subway to create the Global Challenge.

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Entrants in the challenge first learned about Subway's operations and history, gaining hands-on experience with Subway stores in their area. Then, they completed a six-week series of challenges, including creating a personalized favorite sandwich, competing in an Instagram scavenger hunt and creating an advertisement for their virtual store.

The three winners success was rooted in the ability to apply an intimate knowledge of Subway's brand in their local areas and communities.

As Subway accessed information about local markets from competitors, the chain also hoped to gain the attention of future customers and get potential franchisees involved in the business. Through the Global Challenge, Subway attempted to establish themselves as a fresh, relatable brand around the world, appealing to young entrepreneurs as more than a faceless chain.

A key aspect of this was emphasizing founder Fred DeLuca as a young entrepreneur when he founded Subway in 1965. The release of the documentary Subway Restaurants: How a 17-year-old Built the No. 1 Restaurant Chain in the World through Franchising kicked off the launch of the challenge. The film is now shown around the world to college and university students, putting a human face on the brand.

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"In India, there are people… who don't see Apple as a product, they see the man behind it. That's how Subway is going to be seen as," says competition winner Nithyanandam Yuvaraj Dinesh Babu, who is originally from New Delhi but now lives in Singapore. "It may sound philosophical, but that's how I see it."

For those that the message is reaching it seems to be working: 1 in 4 of the competitors in the Global Challenge expressed interest in working for Subway in the future. However, Subway maintains that challenge's purpose was not to groom franchisees but to promote entrepreneurship and franchising internationally among young entrepreneurs.

"The goal wasn't to sell franchises, the goal was to get inspired, to get people to think about it," says Chief Development Officer Don Fertman. "A lot of [competitors] are saying they want to open different businesses too."

"They aren't saying, let's open a ton of businesses this second," says Kushnell. "They were planting the seed, so that any student, three years down the road, can say, I don't want to get a regular job, I want to own something. But, I don't want to own something by myself, I want the help, and the training, and the development [that franchising offers]."

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Kate Taylor

Written By

Kate Taylor is a reporter at Business Insider. She was previously a reporter at Entrepreneur. Get in touch with tips and feedback on Twitter at @Kate_H_Taylor.