Robert Kriewald spent a lot of his time standing around after he bought a no-name sub shop in March, 2004. He had a prime location—Toronto's Eaton Centre food court—but customers stayed away. "I used to just stand here and look at all the other fast-food stores and see how busy they were," says Kriewald.
Fast forward two years, and Kriewald's the king of the food court. And all it took to turn things around was a change of sign—he converted his non-name shop into a Subway franchise. "Everybody's standing around watching how busy I am," he says with a laugh.
Kriewald's father-in-law operates a Harvey's outlet at the Eaton Centre, and when he noticed that the sub-shop owner across the food court wanted out, he thought it would be a great opportunity for his daughter's husband. It didn't take long for Kriewald to figure out why he got the place for just $25,000. "Sales weren't going up, and it wasn't really that profitable anymore," he says.
It's not like fast food was new territory for Kriewald. He was heavily involved in running his family's Harvey's/Second Cup combo at a Toronto Home Depot. And he'd often lend a hand at the Harvey's location in the Eaton Cetnre. But he'd been itching to go it alone. "I've always like working for myself," he says. "And I enjoyed my work at Harvey's."
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Robert Kriewald knew that if his no-name sub shop was going to survive a shake-up at Toronto's Eaton Centre, he had to jazz it up. So he called Subway. Six months later, his store is the franchise's top location in Toronto. At only 211 square feet, it's also the smallest. Cost of buying original no-name sub shop: $25,000 Subway franchise fee: $16,000 Construction: $27,000 Equipment: $50,000 (including bread over, fridges, signs, cash register and point-of-sale software) Initial inventory: $6,000 (including pop, chips, vegetables and meat) Legal fees: $5,000 TOTAL START-UP COSTS: $129,000 Rent:$10,221 for 211 square feet in Toronto's Eaton Centre (as well as 150 square feet of storage space) Monthly inventory: $34,000 Staff: $11,500 (six full-time, five part-time) Franchise royalties: 8% Advertising fees: 4.5% Number of six-inch veggie subs he needs to sell a day to break even: 698 |
After buying the shop, he secured a one-year lease in one of the city's biggest and busiest food courts. Kriewald knew all about ordering supplies, managing staff and running the till. He also knew that if his business was going to survive, something had to change. Cadillac Fairview, owner of the Eaton Centre, was planning to renovate the food court, and there was no way Kriewald's no-name outlet would survive the shake-up. "The chances of me remaining in the food court once it was remodeled were pretty slim," he says. "I decided going with a big name would help guarantee me a spot."
In November, 2005, after six months of so-so sales and no real growth, Kriewald got in touch with Subway. "I phoned them and they were down here the next day," he says.
In many ways, Kriewald was the ideal Subway franchisee: He had experience, he had money and, more importantly, he had a location Subway was eager to put its name on. "They'd always wanted to get into the Eaton Centre," he says. "But with a Quiznos in the north food court and the sub place in the south food court, they were never able to do it."
Kriewald filled out the application—which asked for previous work experience and proof he could finance the outlet—and took a basic English and math test. After that came the interview, which in Kriewald's case was a cinch. "They saw that I had previous experience in the food business and that I knew what I was doing," he says, "so it was pretty straightforward."
Two months later, he was off to Subway's head office in Milford, Conn., for two weeks of training. Workshops covered everything from staffing to managing the books to baking that famous Subway bread. During his time south of the border, Kriewald spent six half-days behind the counter of local Subway outlets, picking up pointers on placing orders and figuring out how to calculate sales and profit figures.
At the end of his training, Kriewald passed the franchisee test. Back in Toronto, he continued to operate his sub shop while he made preparations to renovate the 211-square-foot space into what would become Toronto's smallest Subway store. He ordered his equipment, including a bread oven and two fridges. Subway hooked him up with a contractor and helped order his sign, counter and point-of-sale software.
In early March, he shut down the store for renovations. It took just a week. He ordered his initial inventory and, with his staff already in place, he was ready to go.
There was a line-up the moment Kriewald new Subway shop opened for business. (It helped that it was the first day of March break.) "I had three people from Subway helping, making sure my head didn't fall off," he says. "It was that busy."
Now Kriewald pays 4.5 per cent of his revenue to take advantage of Subway's corporate advertising, and the chain creates a new sandwich every three months, so he's got a steady stream of food promotions.
To make sure he's adhering to their standards, Subway sends people to his shop every two weeks. Among other things, they check that his employees are wearing proper uniforms, that the store is clean and that everything is running smoothly. They can be real sticklers for detail: The last time they visited Kriewald, they observed that his sandwich display unit was a little too full.
He also gets regular visits from the health department, which checks for bacteria on the counters, the temperature of the fridge and display case, and that food is stored properly in dated containers.
Nearly six months after converting his no-name shop into a world-recognized brand (Subway operates in 84 countries, and it's the largest fast-food chain in terms of outlets in Canada and the U.S.), Kriewald's outlet is top-performing store in Toronto. Still, there are challenges—like finding dependable staff and working long hours (Sundays are his only day away from the store).
But Kriewald is impressed with what the Subway brand did for his business—and thankful his father-in-law suggested he go into subs in the first place. "The product is great," he says. "We get all kinds of customers, tourists, old people, young people. Everybody loves Subway."
