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Step Aside McDonald's, Why Subway Has the Most Fast Food Stores in the Country

What Subway's focus on being a healthy alternative to greasy junk foods says about the future of the lucrative fast-food industry.
 
 
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Restaurant upstart Subway, riding high on the marketing message of healthy fast food, will overtake its titanic competitor McDonald's in American store locations by the end of 2009, with a shocking total of more than 32,300 outlets.

That's something few consumers could imagine before the sandwich chain piggybacked on huge weight loss of morbidly obese Jared Fogle -- who lost 245 pounds by exercising and eating only its sandwiches, in contrast to Super Size Me's Morgan Spurlock, who got fat and sick eating McDonald's grub.

In the process, Subway has managed to carve out a lucrative niche in a perfect storm of fast food and economic recession. Now, Subway has emerged as a healthy alternative in the market place, partially because its modest business model allows it to crawl into the nooks and crannies of our far-flung country that cannot sustain stand-alone restaurants like McDonald's, which depend heavily on drive-through business for its earnings.

"It's amazing," AlterNet's executive editor Don Hazen said after a recent trip. "I found Subways at obscure corners of national parks in southern Utah and attached to convenience stores on Indian reservations in Navajo country, where there were no other fast-food spots within 50-100 miles."

To be fair, Subway has miles to go before it makes nearly as much money as the late Ray Kroc's powerhouse, which pulls in around $2 million per store,  compared to Subway's $445,00 per shop.

But when it comes to the fast-food game, there's something to be said for ubiquity, especially during a recession. But is the meteoric rise of Subway really a byproduct of a marketplace more in tune with health than before? Is Subway a fast-food success because it offers a healthy alternative to the calorie-packed, fat-riddled burgers of McDonald's and more?

"That's part of it," explained Subway spokesman Wes Winograd, whose company's motto has been "Eat Fresh" since 2001. "That's the 'fresh' side of it. The idea of Subway as a healthy alternative came from the fact that we don't fry anything. There's lots of veggies on the sandwiches. The meats are low fat. Things like that."

But the other part of the equation, Winograd said, is public participation, from the sandwich-making to the franchise-building, and all the way to the marketing. "All of our locations are franchise owned," he said. "The sandwiches are made in front of you. The customer participates in what's put on the sandwich, as opposed to other restaurants, where food comes out of the back room."

Those often unsanitary back rooms, and compromised boardrooms, took a serious hit within the last five years after the films Super Size Me, Franny Armstrong's McLibel and Richard Linklater's nasty Fast Food Nation, based on the damning book of the same name by investigative journalist Eric Schlosser, were released.

That anti-McDonald's zeitgeist took serious hold as Subway's persistent marketing of Fogle, which caught fire starting in 2000, was peaking.

The result was a perfect storm of bad publicity for conventional fast-food shops and an open door for upstarts like Subway, whose plate-glass serving stations were loaded with more vegetables than meats and were symbolized by an average Jared ready to transform himself, and the company, into an advertising dynamo.

"When Jared came on the scene, things just got out of hand," Winograd recalled. "It really put us on the map. He had lost 245 pounds on a diet that he designed, which included eating nothing but Subway for about a year and combined with exercise. He went from morbidly obese to healthy, so we put him in some commercials, and it resonated with consumers. People to this day write and tell us that they were inspired by him. People related because he was a regular guy. We didn't ask him to lose weight."

 
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