Subway's Unorthodox Location Attracts Orthodox Clientele

| About: McDonald's Corporation (MCD)

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For Subway, Every Nook And Cranny on the Planet Is Possible Site for a Franchise

  • Summary: To fuel their growth, fast food chains like Subway are staring to look beyond strip malls to less traditional locations. Aside from their 110 hospital locations, Subway recently opened their first kosher store in Cleveland's Jewish Community Center, a Goodwill store in South Carolina, a church in New York and inside a few California laundromats (solving the problem of what to do when you squirt ketchup on your shirt!). Subway now has over 20,000 locations in the U.S., easily surpassing McDonald's (NYSE:MCD) 13,700. Subway's use of “non-traditional” locations has jumped from 13% a decade ago to 22% today.
  • Comment on related stocks/ETFs: While some believe food stocks remain attractive investments, too much expansion in a given area can lead to sales cannibalization. Subway's approach is an interesting solution to this problem, especially since their kitchen requirements are much simpler than the chains that fry/grill their food. This might explain McDonald's focus on overseas expansion.