Subway Overtakes McDonald’s As World’s Largest Restaurant Chain

Companies Asia Subway Overtakes McDonald's As World's Largest Restaurant Chain

Unusual Location For Subway Sandwiches In China

The Subway sandwich group, operated by privately held Doctor’s Associates Inc., has officially overtaken McDonald’s Corp (NYSE: MCD) as the world’s largest restaurant chain in terms of number of restaurant outlets, according to the year-end store count filed by Subway to the Securities and Exchange Commission at the end of February 2011.

Subway has reported that it has a total of 33,749 restaurants worldwide at the end of year 2010, compared to the 32,737 restaurant units of McDonald’s.  That number has already increased to 34,246 units according to Subway’s own corporate count as of March 10, 2011.

Both companies have aggressively expanded into international markets using successful franchise business models during recent years.  Subway was founded by Fred DeLuca and Peter Buck in 1965 when they opened the first store in Bridgeport, Connecticut.  It now has restaurants in 95 countries.  McDonald’s Restaurant as a franchise concept was established by Ray Kroc in 1955 and sold 100 million burgers in just 3 years’ time.  It now has restaurants in 117 countries around the world.  From a revenue perspective, McDonald’s is still leader of the pack with a global revenue of US$24 billion compared to Subway’s US$15.2 billion for the year 2010.

As of March 2011, Subway has 1000 restaurant outlets operating across Asia, including 17 in Hong Kong, 199 in India, 236 in Japan, 63 in Malaysia, 14 in Philippines, 92 in Singapore, 38 in South Korea, 118 in Taiwan, 36 in Thailand, 1 in Vietnam and 199 in China.  According to Don Fertman, Subway’s Chief Development Officer, the company is looking towards China for its future expansion plans.  It is expected that the number of outlets in China will surpass 500 by the year 2015.

Other major restaurant chains are also looking for expansion into Asia, and to China in particular, as part of their overall strategic plans.  Starbucks (NASDAQ: SBUX), already the largest coffeehouse chain in the world with 16,858 outlets in over 50 countries, plans to triple its café outlets in China.  Kentucky Fried Chicken (KFC) with 16,200 restaurant outlets in 105 countries, also the largest and fastest growing restaurant chain in mainland China today with over 3,200 restaurants in more than 700 cities, and Pizza Hut, the largest pizza chain in the world with 13,100 restaurants, and Taco Bell with over 6000 franchise locations, are all operated by Yum! Brands Inc. (NYSE:YUM), which plans to increase its dominance in the global fast food market by opening significantly more stores across Asia in the near future.

Copyright © 2011

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