Cost of start-up:£138,000
American imports have generally fared well when it comes to food and drink in the UK – McDonalds and Coca-Cola being prime examples. Now there is a new culinary presence in the British high street from across the Atlantic – Subway.
The sandwich-making giant, which is visible if you merely turn 360 degrees in most American cities, has landed in the UK and is beginning to establish itself as a firm favourite. It is also ambitious – Subway wants to take on and beat the burger giants at their own game – and this attitude is just right for Kandiah Vasanthakumar, who is one of the company’s franchisees.
“Subway is a global franchise giant,” says Kandiah. “It has a tried and tested formula which has evolved from decades of experience - it knows what works and what doesn’t.”
Kandiah’s faith in the Subway formula was one reason that persuaded him to give up his job working in an IT hardware company three years ago. However, he reveals that there have been other factors that have made him drop his mouse and pick up a knife and a few crusty baps.
“I felt I could progress further if I went out on my own,” he explains. “Computer visual display systems are interesting, but I didn’t want to be still tuning and repairing them until I was 60!
“I’d also seen a TV documentary on Iqbal Wahhab, an ex-journalist who decided to open an up-market Indian restaurant called The Cinnamon Club. His trials and tribulations, and massive financial risk-taking, saw a positive outcome. This was inspiring!” he enthuses.
Kandiah also sees the growth in demand for convenient, yet healthy, food as a being big factor in his decision to become a Subway franchisee.
“Good quality sandwiches are a best-seller, and relatively recession-proof. We’re in a society of abundance now and few people ‘brown-bag it for lunch.
“In other words, people don’t prepare their lunch at home, they go to a sandwich store or restaurant. I also liked the way that customers can design their own sandwich or salad as they watch it being made,” he says.
After digging deep into his savings and securing a bank loan from Natwest, Kandiah was able to meet the franchise cost and become a Subway franchisee.
“Taking out the lease on the premises, the franchisee entry fees and other incidentals came to about £138,000. It is, however, possible to set up a Subway with much less than this,” he explains.
Life as a franchisee
Kandiah has got an MSc in Information Systems from South Bank University, but he insists that family support and interaction with other successful entrepreneurs has been even more helpful to the running of his outlet.
“My brother-in-law is a retail entrepreneur in the London areas as well, and he gave me some very good pointers and support, I also meet with other Subway franchisees who share valuable ideas. They were a great help,” he says.
After completing a glamorous-sounding two-week franchisee training course in Connecticut, USA, Kandia returned to England to start the real hard work – running a successful franchise with 10 staff to look after.
“You need stamina, patience, diplomacy, numeracy, logic, a feel for stock management and control, remaining fastidious about optimising resources at all times and multi-tasking abilities.
“It is also good to find time to read about people like Fred DeLuca, Charles Dunstone, Karen Brady and Stelios haj-Ioannou. Ask yourself ‘what did they do to succeed?’ As long as the answer is compatible with your franchisor’s protocols, emulate them,” he advises.
Although Kandiah is keen to delegate his work to trusted employees, he still works around 70 hours a week to keep his franchise on track.
“When I started, I was working about 84 hours a week. But this is to be expected in the startup phase,” he says.
The next step
With his branch of Subway situated in the heart of Croydon, trade is brisk for Kandiah, with only the lull in custom after the lunchtime rush hampering aspirations of larger profits.
“It would be nice to develop the dinnertime and catering-out part of the business. I am surrounded by businesses and office buildings, so there is real potential.
“The Chief Immigration Office for the UK is 150 metres away from my store and this gives me an immediate breakfast audience early in the morning – I have just been told that I am breaking records in the UK for breakfast trade,” he says, proudly.
In fact, conditions are ripe for a successful business – the prominent location of the store means that advertising costs are low and the proximity of large numbers of hungry office staff ensures that Kandiah is kept very busy during lunchtime.
“But it would be nice to have an indefinitely extended lease on my current location. It’s in the high street, and there is a lot of competition within a 300 metre radius of the store so I’m mindful that I need to keep on my toes,” he says.
As for the future, although Kandiah has plans to expand his outlet, he has no current ambitions to start up another business. Although he admits he is a committed entrepreneur, he feels that financial security and time spent with his family is an overriding factor.
“I have a young family, and they are central to my life,” he explains. “Right now, and for the foreseeable future, I work a lot and am away from my family to some extent. I would like to see more of my family, as it’s for them that I’m doing it all.”