A Franchise Evaluation Checklist- The Franchiser and the Franchise

1. Is the potential market for the product or services adequate to support your franchise? Will the prices you charge be in line with the market?
Yes, our service are quite different with other fast food business. We target people to eat healthier and get them to make their own choice of making their subway sandwich.

2. Is the market’s population growing, remaining static or shrinking? Is the demand of your product or service growing, remaining static or shrinking?
Subway market’s population is growing. Many people are getting health conscious. I am very sure that the demand of our products growing.

3. Is the product or service safe and reputable?
Yes of course. All SUBWAY® restaurants follow our “Gold Standard” policies regarding prepared food and produce manufacturing and inspection specifications. All franchises are provided with information on proper food handling procedures in order to properly train their crew members.
Food is prepared fresh daily and temperatures are monitored regularly. Gloves are required to be worn during all food handling procedures.

4. Is the product of service a passing “fad”, or is it a durable business idea.
-

5. What will the competition, direct or indirect, be in your sales territory? Do any other franchisees operate in this general area?
There are quite many franchisees is in the general area. General area are normally like shopping centres.

6. Is the franchise international, national, regional, or local in scope? Does it involve full- or part-time  involvement?
International. Our franchise exist in more than 100 countries and territories and it is one the fastest growing franchises in the world.

7.How many years have the franchiser been in operation? Does it have a sound reputation for honest dealings with franchisees?
Subway was founded in year 1965.

8. How many franchise outlets now exist? How many will there be a year from now? How many outlets are company owned?
There are about 39,649 outlets in 102 countries and territories. There is only one company-owned unit. It runs as a testing facility by the Research and Development department.

9. How many franchises have failed? Why?
-

10.How many franchise have left the system within the past year? What were the reasons for leaving?
-

11.What service and assistance will the franchiser provide? What kind of training program does the franchise offer? How long does It last? What topic does It cover? Does the franchiser offer ongoing assistance and training?
For new franchises, the training is for two weeks, 50% in class and 50% in store training.  All franchisees named on each franchise agreement must satisfactorily complete training at SUBWAY® World Headquarters before the store will be allowed to open.

12. Will the franchise perform a location analysis to help you find a suitable site? If so, is there an extra charge for doing so?
The locations approved for development by SUBWAY® will be provided to you during the qualifying process.  You may also submit a location that you find. They will investigate your location and provide you with analysis of its viability for development.

13. Will the franchiser offer you exclusive distribution rights for the length of the agreement, or may it sell to other franchises in the area?
-

14. What facilities and equipments are required for the franchise? Who pays for construction? Is there a lease agreement?
You may purchase SUBWAY® equipment outright with cash or with a secure loan.  The SUBWAY® franchise system also offers an equipment leasing package that requires a security deposit of 10% of the equipment costs, with a minimum of $1,000. The lease payments are for 60 months.  At the end of the lease term you may purchase the equipment for 10% of the original value.  The security deposit will be applied towards the purchase.  The equipment may be purchased at any time during the lease period using the buyout calculation schedule. For additional information or to see a sample copy of the equipment lease, please refer to the Franchise Disclosure Document.

15.What is the total cost of the franchise? What are the initial capital requirements? Will the franchiser provide financial assistance? Of what nature? What is the interest rate? Is the franchiser financially sound enough to fulfil all its promises?
The cost of the franchise could cost from RM406,200 to RM886,650. . Subway also offers finance programs for leased space and construction programs through Subway affiliates, and may loan money to franchisees in connection with a Subway restaurant. In addition, Subway may guarantee a loan for a franchisee in connection with a Subway restaurant. Subway may change or eliminate these loan programs and equipment leasing program without any prior notice to franchisees.

16. How much is the franchise fee? Exactly what does it cover? Are there any confining fees? What additional fees are there?
The franchise fee is RM30,000. Other fees such as the 8% royalties and 4.5% promotion fee for advertising.

17. Does the franchiser provide an estimate of expenses and income? Are they reasonable for your particular area? Are they sufficiently documented?
-

18. How risky is the franchise opportunity? Is the return of the investment consistent with the risk?
Subway is actually ranked as one of the safest franchise with only 7% of failures while other franchise companies can easily have double digits failure percentage.

19. Does the franchiser offer a written contract that covers all the details of the agreement? Have your attorney and your accountant studied its term and approved it? Do you understand the implications of the contact?
-

20. What is the length of the franchise agreement? Under what circumstances can it be terminated? 
If you terminate the contact, what are the costs to you? What are the costs and terms of renewal?  
The length of the franchise agreement is 20 years. Franchise will automatically renew for additional 20 year periods, unless either party chooses not to renew. Subway has the right to refuse renewal if the franchisee is not in full compliance.

21.Are you allowed to sell your franchise to a third party? Does the franchiser reserve the right to approve the buyer?
Yes, you may sell your restaurant at any time after opening, provided the company approves the buyer.

22. Is there a national advertising program? How is it financed? What media are used? What help is provided for local advertising?
-

23.Once you open for business, exactly what support will the franchiser offer you?
Your local representative will help you get started and provide ongoing operational evaluations. Besides, Franchise World Headquarters, LLC is proud of the excellent support systems available to SUBWAY® franchisees. Ongoing support is provided before and after you open your store. As soon as you join the SUBWAY® team, you'll have access to help to get you started. Once open, systems are in place to help you operate your location effectively.

24.How does the franchise handle complaints from and disputes with franchisees? How well has the system worked?
-