DeLuca said China had great growth opportunity and targeted 500 stores in the next 5 years, with 35 to 50 set to open in the coming year.

He added that Subway was looking particularly at second tier Chinese cities for expansion as major ones such as Beijing and Shanghai had already built a good foundation.

DeLuca said Subway’s growth in China was in the early stages of development with awareness for products still quite low.

A standard subway sandwich costs around 20 yuan ($2.93) compared with 6 yuan for a cheeseburger at McDonalds. Subway, one of the largest fast-food chains in the world, has 150 stores in China compared with McDonald’s, which has more than 2,000.

“We have a very different business model to McDonalds. We make smaller stores and tend to put a lot more of them around,” said DeLuca.

Subway’s emphasis on fresh eating and lots of vegetables will help the franchise chain grow as the Chinese consumer looks for healthier options, DeLuca said.

Subway’s China stores account for 0.5 percent of Subway’s global network of 32,000 stores with markets such as the United States, Canada, Australia and the UK making up the bulk of revenue.

As Subway expands into China’s different provinces, it plans to localize the menu to suit local palates.

David Keir, Subway’s development agent in Shanghai, said Subway was doing trial research, testing sandwiches such as Beijing roast duck and local sauces like “hot spicy Sichuan sauce.”

DeLuca said it would continue to use its franchise model in China, which has failed to take off for other large fast food chains.

Source : Konaxis