Subway Bigger Than McDonald’s?

What seemed impossible at one time is about to happen. McDonald’s is no longer going to be the largest restaurant chain in the world by number of units.

Subway, with 31,800 units, is about to overtake McDonald’s total of 32,158 restaurants. While McDonald’s is slowing new-store growth, Subway continues to open 40 stores a month and is making a big international push.

Of course, unit counts aren’t everything. According to Ad Age, quoting data from Technomic, the average McDonald’s has $2.3 million in sales annually, while a Subway only brings in $445,000.

We don’t see any data on square footage, but we would imagine the average McDonald’s is much physically larger as well.

So what is Subway’s saturation point? Are they too aggressive in their plans? The ones we see in Manhattan are usually packed during lunch, but that’s probably not the norm across the country.


6 Responses to “Subway Bigger Than McDonald’s?”

  1. 1 Steve September 23, 2009 at 8:29 am

    Yes, they are all “pack” for the most part during lunchtime. Obviously there is no comparison in overhead, so as to which franchise actually “nets” more is debatable all things considered.

  2. 2 Sandi September 23, 2009 at 9:07 am

    I agree with Steve. I have two Subways to choose from and both are SRO during the lunch hour, main dinner hour, and the one opened later in the evening gets the crowd after local highschool football. Not so much the McDonald’s.

  3. 3 Cameron Maness September 23, 2009 at 10:24 am

    Very impressive no matter the discrepancy in gross sales. The overhead, employee ratio, limited concept, ect… make Subway an easier management target for franchisees as well.

    • 4 Steve September 24, 2009 at 8:54 am

      No doubt about that, plus, the real estate footprint is a lot easier to relocate should your location prove not the best. Once you build a McDonalds, you’re not going anywhere. I must say that in my area, though, the McDonalds are always packed, my kids love them. And no matter how tough the times get, we gotta’ eat, right?

  4. 5 james September 24, 2009 at 9:49 pm

    Gross sales trump store count every time. McD’s hit a wall a few years ago when they were incurring huge capital outlays building 2000 new stores a year and at the same time sales were declining and store service and cleanliness was suffering. Not a good combination. Starbucks has learned a similar lesson, and I would suspect Subway may trip over the same hurdles. Eventually the empire just becomes too vast to manage, product control and standards slip, and the devilish subjects start to rebel.

  5. 6 A reader September 28, 2009 at 10:22 pm

    One reason that Subway seems packed is that they are small and they don’t have as many people working. This slows down the service and makes it seem busier than it really is…that is a big reason for the discrepancy in gross sales.

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