Franchise fever: no one starts a business without hoping for success. But Carlos Avila is still stunned by the record-breaking sales of Subway in Venezuela - Strategies

CARLOS AVILAHAD YEARS of experience in international fast food when he decided to become the master franchiser for Subway in Venezuela three and a half years ago. He had already managed new business development for McDonald's in Latin America and the Caribbean and handled the successful launch of KFC in Venezuela.

But the Venezuelan chose Subway because it had shown itself to be a winner in other markets. And, without a kitchen or cooking to worry about, the sandwich chain seemed an easy fast food franchise to run; at the very least, it could fir into smaller square footage areas than other fast food chains.

So, along with business partner Antonio Gorrin--who came from a family of bakers and also had years of experience in the food business--Avila opened the first store in March 1996 in the thriving Caracas neighborhood of Las Mercedes.

As it turns out, they may have chosen the country even better than they chose the franchise. With a total of 40 stores nationwide by the end of this year, the franchise has grown faster in Venezuela than anywhere else in the world. The stores are bringing in about US$14,000 per week each--more than twice the US average. One branch in a booming Caracas shopping mall recently attained the status of being the highest grossing Subway outlet in the world. "There's no market as fertile for fast food from the US as we've found in Venezuela," says Avila, noting that a lot of Venezuelans already knew the chain from visits to Miami.

As much as the food itself, success for the franchise has been driven by the experience of entering a clean, polished environment distinct from the patron's ordinary world. "It's like a small Disney[World], and people in Venezuela love to have that kind of experience," Avila says. "It's an added value."

The evolution of the store's menu is another case in point. At first traditional Venezuelan dishes, such as came mechada, were offered. But local cuisine did not sell; customers came because it was a US franchise offering US food.

In addition to the market's acceptance of Subway as a brand, the company owes its success to the quality of its management, according to Rolando Seijas Sigala, president of Venezuela's chamber of commerce for franchises. "They are the franchise men of Venezuela," he says. And among its most ambitious. The partners are hoping to add some 30 stores in Venezuela by the end of next year, bringing their total branch count to more than 70.

Avila attributes his success to a number of factors, including the location of the outlets and a preferential treatment of existing franchisees. The best locations are in heavily trafficked shopping centers or in commercial districts; more recently, Avila has done well with 24-hour service stations. And since existing franchisees have first dibs on opening new branches in their established markets, Avila can have his pick of the lot.

"This is part of the commitment to the partnership with your individual associates," says Avila, part of what it takes to attract the best franchisees. And the criterion for picking the best? "They need to have that well-known philosophy of successful US franchise companies, where there is a total commitment to customer satisfaction." Some rules never change, even for a master franchiser with an MBA in international business from Louisiana State.

COPYRIGHT 1999 CEO Publishing Group, Inc.
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