Downturn Spurs Subway to Grow Bigger Than McDonald's

Okay, okay, so Subway is nowhere near McDonald’s size in terms of sales. But very soon, the sandwich chain could have more worldwide locations than its ubiquitous rival. Subway is close to 31,800 stores and is set to surpass McDonald’s, with 32,158 locations, by the end of the year.

McDonald’s shouldn’t be too upset — expansion has not been its focus recently. Instead, the burger chain has looked at making individual restaurants more profitable — and it, too, has succeeded in its goals. In the U.S., each McDonald’s store brings in about $2.3 million a year, compared with about $445,000 a year for the average Subway, according to Technomic.

Subway, on the other hand, has aggressively pursued new store openings; staff at Subway headquarters apparently get free ice cream for every 100th new store. Things pick up when the economy is bad, Subway director of development Don Fertman told Marketplace. “During economic depressions, where people are laid off, we get a lot of folks that come knocking at our door, and saying, ‘Hey, I’m interested in doing this kind of business.’”

AdvertisingAge points out that Subway has a simple menu and lower-than-average start-up costs, making it an appealing option for industry newcomers.