International Business Administration

Batch 2010 Group of Bclass

Section IIExternal Analysis2.1 Environmental Analysis: Major Trends and Issues2.1.1 Regulatory Trends and IssuesBusiness law is the implementation of regulations that oversee the implementation of activities in business or economic activity. In the setting of the included business law ordinances and procedures on how to run a real business habits. To understand business law, is useful to first understand civil law and commercial law in general. Because the field of civil and commercial law is the basis of business law. This is important, so that we shall have no difficulty in understanding the basic business law.

Business law can be defined as the rules were made in order to manage business activities in Indonesia. The business activities can be run fairly. For more details, business law can be interpreted as written regulations made by the government in order to manage, protect and monitor all business activities whether it is trade or industry or service or other activities related to finance and business sectors.

Communications sector can develop due to the rapidly growing technological advances as well. This can be seen in the production of goods such as mobile phones and the internet. Businesses in this sector are thrilled to see the interest of the community is very high.

Another kind of business is rapidly expanding franchises (franchise) which was once dominated by foreign businesses, such as KFC, Mc Donald's and Pizza Hut. Currently it has come also competing local businesses such as Indomaret, Ice Teller77 and others. In addition the property business also began to squirm that hit major cities such as Jakarta has many built luxury apartments designed for middle and upper class society. In other cities in Indonesia is also developing residential development business, shops and shopping centers. Economic development in Indonesia can be seen from the data development of micro small and medium enterprises. Data in 2006 showed all business units in Indonesia has reached 45.7 million units in June and in 2011 growing to 51 million units.

Conditions mentioned above background birth business law as law in Indonesia. The law is the law of social control so expect businesses are also able to organize and supervise the escort business in this country. With the presence of business law in the midst of society, it is expected that businesses can avoid business losses. In addition, business law are also expected to be able to prevent monopolistic practices early. Business law is expected to provide protection and security for all businesses, consumers and the wider community. Therefore, businessmen and the private sector and the public basically does require the presence of business law.

Business law also aims to create peace in the conduct of business. However, business law will also provide tough sanctions against those who violate the rules in business law. Sanctions are to provide legal certainty, justice as well as to bring awareness to the community. Thus people will be convinced that the existence of business law really useful and can protect them.

Business law regulating and protecting the perpetrators from engaging in fraudulent practices such as monopolies and competition, tax evasion, and so forth. In addition, business law are also intended to provide protection to the community. People as consumers of goods and services in the market should get the attention of business law. Society has often been the victim in the business world. It has been often found that businesses create and market products under the standard and dangerous to the community.Government Regulation Number 16 of 1997 on Franchise (Franchise)

The regulation of franchise issues in Indonesia in particular regulated in Government Regulation No. 16 of 1997 on Franchise (Franchise), which was passed on 18 June 1997, as The government assumes that this franchise system is one way are effective to increase the economic activity of our country was slow and gave the opportunity to the public especially to the economically weak groups to try to carry out its business, because of That the Government issued the regulations.

Book of the Law of Civil Law

All regulations governing franchise should remain subject to the rules and provisions of the Civil Code. Provisions on agreement the Civil Code was set in book III have an open nature, which with its open it will provide freedom of contract to the side, with the principle freedom of contract allows for any person to make any kind of agreement. License Agreement shall be subject to the general provisions of civil law Article 1319 Civil Code which contains "all agreements, both have a special names, and that is not known by a particular name, subject to the general rules, which are contained in this chapter and ago ". Agreement to be made by the parties where there is an agreement between the parties to the agreement.2.1.2 Economic Trends and IssuesThe economic situation in Indonesia in 2012 is expected to stabilize. The state of the Indonesian economy expected to remain steady in 2012 if they meet specific conditions prevailing in the world strong economy, though by no means outcome riding stable economy because of the years 2008 to 2012 Indonesia's economic situation deteriorated because the amount of budget that should belong to the people completely lost because of corruption cases, the increase in price without any logical reason, and there are many other cases. After a decline in 2010, Indonesia is expected to play with the stability of the economy that are not too into account the state budget, and do not take into account the cases that occurred in 2008 because it could be a factor and the reason for the loss of state money One That case has not been finished until now Century is the case. Indonesia has become the emerging economy, and economic power to the 16 world. Indonesia became a middle-income country, with poverty and unemployment levels are successfully lowered gradually. By overcoming the challenges of economic development through the implementation of policy measures as described above, as a nation, we must trust and believe, in time, we can have a stronger economy and justice, democracy and stable quality, as well as civilization developed nation and superior as we seek together.

Global economic environment is expected to impact on the business environment in Indonesia includes a micro-enterprise development spending in developed countries, changes in appetite / demand and the global policy change as the exchange rate of some currencies that dominate the international financial markets. Spending patterns of development as in the United States, which tends to lead to balance the budget deficit will affect the US Dollar exchange rate against other currencies. We have observed the fall of the exchange rate against the U.S. dollar in the period 1994-95 Yendaka, reaching a rate below 90 yen per dollar. Besides, it should be observed in the direction where government spending is removed, as this can affect the pattern of demand for imported goods originating from developing countries. If the development expenditure is followed by the participation of the private sector output growth rate the economy can be improved. This development will usually be followed by the development in the construction sector, real estate and technologically advanced industries, so that imports of raw materials and other input goods from developing countries will increase. Demand for goods and services in developed countries, especially luxury goods, may change with the shifting tastes and lifestyle of the people in the country. Some of the economic activities that will be affected by climate change that happens every year in specific geographic areas of the economy, including the demand for building materials, garments and tourism activities. Finally, in the era of globalization, foreign currency exchange rates are likely to fluctuate, especially the dollar, yendaka, pounds, deutchmark and the other major foreign currencies. Factors causing fluctuations in currency exchange rates is the imbalance trade balance of the two countries (bilateral), the budget deficit of political, economic growth and the threat of international political conflict.

Until now, the IMF international financial institutions are not able to create stability in the exchange rate, given that most international control of the stock of money in the hands of the owners of global capital. The implications of exchange rate volatility is the financial management of exporting firms is the uncertainty factor in estimating revenue streams and cost flows in a particular period. Of course, the use of international financial consulting services managers are strongly advised to avoid the risk of loss from any calculation of the exchange rate.

EVOLUTION GLOBAL ECONOMY

1. Economy Agriculture, until two hundred years ago the world economy is agrarian in which one is the main characteristic of the soil is the most dominant factor.

2. Industrial Economics, after the industrial revolution, the invention of the steam engine, the global economy has evolved toward an industrial economy with its main characteristic is the capital as the most important factor of production.

3. Economic Information, currently, men tend to occupy a central place in the production process, because the stage we are entering the economy is based on knowledge (knowledge based) and focuses on the information (information focused). In this case the role of telecommunications and informatics as a key technology (technology enabler).

Advances in information technology and telecommunications so rapidly, allowing the implementation of new ways for more efficient production, distribution and consumption of goods and services. It is this process that brings people into the Society or Information Economy. This new society is also often referred to as post-industrial society. Whatever we call it, in the information age, physical distance or geographical distance is no longer a factor in human relations or inter-agency effort, so that the universe becomes a hamlet universe or "Global village". So often we hear the term "distance is dead" or "distance is dead", which more and more fulfilled. In our lives in the future, information technology and telecommunications sector is the dominant sector. Anyone who mastered this technology, it will become a leader in the world.

GDP - per capita (PPP) (US$)Country1999200020012002200320042005200620072008200920102011

Indonesia2,8002,9003,0003,1003,2003,5003,6003,9003,6003,9004,0004,2004,700

Definition of GDP - per capita (PPP): This entry shows GDP on a purchasing power parity basis divided by population as of 1 July for the same year.

This is a chart of trend of gross domestic product of Indonesia at market prices by the IMF with figures in millions of rupiah.

YearGDPUSD exchange(rupiah)Inflation index(2007=100)Nominal Per Capita GDP(as% of USA)PPP Per Capita GDP(as% of USA)

198060,143.191627105.255.93

1985112,969.7921,111113.475.98

1990233,013.2901,843163.016.63

1995502,249.5582,249244.118.14

20001,389,769.7008,396532.326.92

20052,678,664.0969,705833.107.51

20106,422,918.2308,5551216.389.05

For purchasing power parity comparisons, the US dollar is exchanged at 3,094.57 rupiah only. Mean wages were $2.32 per manhour in 2009.

(Images source: www.latifahinspirasikehidupanku.blogspot.com)2.1.3 Socio-Cultural Trends and Issues Indonesia, which is an independent state and a recognized world has a constitution that governs the social system of Indonesian culture, not only in Indonesia it is known that there were four (4) pillars of nationhood as the bearer and container of socio-cultural systems of Indonesia. The four pillars are the Pancasila, the 1945 Constitution, Homeland, and national unity.

Social and cultural dynamics, it does not hit the exception of Indonesia, despite broad spectrum and speed vary. Similarly, society and culture of Indonesia has been growing rapidly in the past, although today's development is lagging when compared with developments in other developed countries. However, the community and the diverse culture of Indonesia were never stagnated as the embodiment of the active response to the challenges arising from the changing environment in the broad sense and the change of generations. There are a number of forces that led to the development of Indonesia's social culture. Categorically there are 2 forces social change, First Instance, is the power of the people themselves (internal factors), such as change of generations and various local discovery and engineering. Second, is the power from outside the community (external factors), such as the influence of contacts between cultures (culture contact) directly or distribution (element) culture and environmental changes, Which in turn may stimulate the development od social and cultural community should deprogram them. No matter how fast or slow the development of socio-cultural hit, and any factor cause, any change would cause reaction of the pros and cons of the community or nation concerned. The size of the reaction to the pros and cons of it can threaten the stability and even can also lead to social disintegration, especially in a pluralistic society with multiple cultures like Indonesia.

Indonesian society today is undergoing a period of transition that is very powerful as a result of a thorough reform demands. Moderate reform demands that originate on national development activities that apply advanced technologies to accelerate their implementation. On the other hand, without realizing it, the application of advanced technologies that require reference to cultural values, social norms and new orientation. It is not surprising that Indonesia's diverse multi-cultural with it as if it had kelimbungan to reorganize the social order, politics, and culture today. Social events that are changing at the moment in Indonesia include the entry of the baby boom cohort in 1950, 1960 and 1970 in the Indonesian labor market. Their entry into the workforce can affect purchasing power, spending patterns and the different demands of a cohort to another cohort. By modernization which then influences the behavior and their lifestyle, as well as symptoms of urbanization and rural-urban migration continues to consider with carefully. Similarly, the inclusion of a large workforce trend woman work in factories and in offices that bring different cultures work that interesting to watch. Modernization and freedom of the press has been printing and media affect purchasing power and spending patterns of everyday factory workers, middle-class consumers and the jet set of the metropolitan area. Shifts in demographic components such as distribution according to age, distribution by region, age structure, the structure of employment, migration patterns and decreased fertility and mortality rates should be observed carefully, especially the impact on market segmentation, purchasing power and behavior expenditure on goods and services. Currently interesting to watch the baby boom cohort trip generation 1945 and 1950, who had begun to enter retirement and decreased productivity. 2.1.4 Technological Trends and IssuesIndonesia is one of the few developing countries in the world. Even today, Indonesia is one country that has considerable influence in the world.

One of the important means of communication today is the media, mass media, print media, electronic media, and so on. Among the various media which show significant role of the print and electronic media. Through the media, we can find out about the issues and events happening both inside the country and abroad.

Currently, the media play an important and active to help build the nation. It can be seen from several aspects. Previously, maybe only a few people can access the internet and understand what it is about the internet. But now, many people cannot live without it seems the internet. Even in the village also have many internets now enter the village.

This event is one of the development of communication technology is excellent. But some of those Internet users do not know exactly to what the actual use of the Internet. The average Indonesian people use the Internet simply to exist or practically bandwagon. This occurs because the rise of social networking sites spread across the internet.

Internet is one of the receptacles for learning, not just to play in social networking. Usually the students are using the internet to assist them in completing their tasks. There are even some teachers who use the internet to collect the assignment.

With search engines on the Internet, then we can easily find anything we're looking for it. Today, the Internet is not only used for learning or social networking. Some companies even use the internet as a promotional tool. Internet is one of the good access to promotion because not only can be accessed in Indonesia, but from all over the world.

Currently, the development of communication technology in Indonesia comes from different parties and elements of society. Not only those from the Internet, but many other factors that led to the development of communication technology in Indonesia. Some of the other factors are the use of various electronic devices such as smartphones, PCs / laptops, a variety of events from electronic media such as television and radio, print media, and more.

Previously, many people simply use the phone to call or send a short message to simply ask the news to family or relatives. But this time, the phone not only serves as a medium to call or send a message, but has become a mini computer that can have many functions. A wide range of mobile phones in circulation today is a kind of smartphone that has a lot of additional features and their respective uses.

This is one of giving access information very quickly and accurately. With the TV, then all sorts of events that exist both outside and within the country can be easily identified. The average population of Indonesia is pick the TV at home, so this is the media plays an important role in the advancement of communication technology in Indonesia.

In addition to the many positive things from the development of communication technology, of course there are negative as well. Some of the negative things that can happen with the development of communication technology in Indonesia among others, dependence on the internet would result often they use the Internet. In addition, easy access to, adult sites because of the lack of government action means. There are also other problems such as cybercrime or crimes committed in cyberspace.

2.1.5Regional Trends and IsuuesIndonesia has become one of the countries with the largest urban population in East Asia and the Pacific. In 2010, there was 49.8 percent of Indonesias population live in urban areas. Such a rapid pace of urbanization is opening a number of great opportunities for Indonesia. If managed well, urbanization has the potential to increase productivity, provide new opportunities in the field of economics, as well as to increase the income of the urban population. This study examines the structure, performance, and obstacles facing the city and metropolitan area in Indonesia, and how Indonesia can reap the benefits of urbanization. The study shows the urgent need to direct urban development strategy on the following two points: Spatial planning and investment priorities should be consistent at each level of government (central, provincial, city). Urban development strategies must be adjusted to the city concerned.

Connectivity between metropolitan areas, as well as between urban and rural areas also needs to be improved considering Indonesia's diverse geography stretching. Furthermore, to align with the urbanization trends Master plan for the Acceleration and Expansion of Indonesia's Economic Development (MP3EI), development planning should focus on improving the efficiency of urban areas and efforts to reap the benefits of urbanization.

Development strategies that focus will be both more profitable growth in urban areas compared to a strategy based on the development of new growth centers or especially Economic Zone.Yogyakarta Special Region level is a province in Indonesia that is a fusion of the former (State) Yogyakarta Sultanate and the [State] Duchy Paku Alaman. Yogyakarta is located in the south central part of Java Island and bordering Central Java province and the Indian Ocean. Special District has an area of 3185.80 km2 consists of one city and four counties, which are subdivided into 78 districts and 438 villages / wards. According to the 2010 census has a population of 3,452,390 souls proportion 1,705,404 men and 1,746,986 women, and has a population density of 1084 people per km2.

The mention of Yogyakarta nomenclature that is too long causes the frequent occurrence of condensation nomenclature to Yogyakarta or DIY. Special District is often identified with the city of Yogyakarta so inaccurately called Jogja, Yogya, Jogjakarta, and Jogjakarta. Despite having the second smallest after extensive Jakarta Special Region is renowned nationally and internationally. Yogyakarta becomes a prime tourist destination after Bali. Yogyakarta addition to the area worst by the earthquake on 27 May 2006 and the eruption of Mount Merapi in mid-October to November 2010.

Consideration aspects of demographic, social and cultural rights in ALB study includes all the demographic characteristics of population growth, urbanization, seasonal migration, ethnic behaviors and customs, social structure, urban lifestyle patterns, consumer perceptions, consumer buying patterns Indonesia, social conflict, aspects of pollution the natural environment, environmental sustainability and many other factors to mention individually. Consumer lifestyle patterns may vary between regions depending on the ethnic background of culture, demography, religion, education, and geographic location. 2.1.6 Summary of Major Environmental Trends and IssueEnvironmental analysis is relatively qualitative and involves the identification of and analysis of environmental variables, which affect the business. Based on environmental analysis about Indonesia condition nowadays, we have found that regulatory trends, economic trends, socio cultural trends, technological trends and regional trends in Indonesia is different from the another country. Indonesia has the uniqueness that makes it different. The regulatory business in Indonesia is business law. It can be defined as the rules were made in order to manage business activities in Indonesia. Business law can be interpreted as written regulations made by the government in order to manage, protect and monitor all business activities whether it is trade or industry or service or other activities related to finance and business sectors.

Indonesia has become the emerging economy, and economic power to the 16 world. Indonesia became a middle-income country, with poverty and unemployment levels are successfully lowered gradually.

Indonesia, which is an independent state and a recognized world has a constitution that governs the social system of Indonesian culture, not only in Indonesia it is known that there were four (4) pillars of nationhood as the bearer and container of socio-cultural systems of Indonesia. The four pillars are the Pancasila, the 1945 Constitution, Homeland, and national unity.

The development of communication technology in Indonesia comes from different parties and elements of society. Not only from the Internet, but many other factors that led to the development of communication technology in Indonesia. Some of the other factors are the use of various electronic devices such as smartphones, PCs / laptops, a variety of events from electronic media such as television and radio, print media, and more.

Indonesia has become one of the countries with the largest urban population in East Asia and the Pacific. In 2010, there was 49.8 percent of Indonesias population live in urban areas. Such a rapid pace of urbanization is opening a number of great opportunities for Indonesia. If managed well, urbanization has the potential to increase productivity, provide new opportunities in the field of economics, as well as to increase the income of the urban population. Government has the regulation to align with the urbanization trends Master plan for the Acceleration and Expansion of Indonesia's Economic Development (MP3EI), development planning should focus on improving the efficiency of urban areas and efforts to reap the benefits of urbanization2.2 Industry Analysis

2.2.1 Size and GrowthThe industry size of fast food in Indonesia can be accounted in different ways; one being the total sales of fast food, but in this context another way could also be to look solely at sales of fast food in chained restaurants. By isolating the sales made in chained restaurants, a picture of the overall attractiveness of franchises should be clearer. Both the total and the chained fast food sales will be considered in this section.

Total sales of fast food from 2002-2007 can be seen here:

While the overall market for fast food has been performing well, times have been even better for chained restaurants such as McDonalds, Burger King, Sunset Boulevard etc. In 2002 sales were million 2,145 and in 2007 the revenue was 3,613.3. This is a growth of 68.6 percent. The annual CAGR for chained restaurants has been 11 percent from 2002-2007, which is a 3.1 percent bigger growth than that of the overall fast food market. This indicates that chained restaurants are well received in the Danish market.

The figures show that historically the market for fast food has been growing every year. For Subway, this means that it can expand in a market that has been growing over recent years. Market saturation has not happened yet which is definitely an advantage as it decreases some of the pressure of performing within the market. A saturated market usually leads to fierce competition since companies fight over the very same customers.

Market growth

Appendices three and four are forecasts of sales and growth from 2007-2012.To a large degree, the figures in that table are more important than those of 2002-2007 as they are more contemporary. Both total sales and chained restaurant sales will be considered as in the foregoing section.

From 2007 to 2012 total sales are expected to rise from million 7,922.1 to 8,575.5 which is a total growth of 8.2 percent. This is equal to a CAGR of 1.6 percent. The prospects, however, are somewhat better for chained restaurants. Here sales are expected to rise from million 3,617.3 in 2007 to 4,180.7 in 2012. This is equal to a CAGR of 2.9 percent or a total growth of 15.6 percent.Assessing these figures, it seems clear that although growth is not expected to rise as significantly as in 2002-2007, the market is still expected to experience growth especially within the subsector of chained restaurants. An analysis of the product life cycle (PLC) will here be used to look more in depth at the development within the market.2.2.2 Structure Porters Five Forces2.2.2.1 Power of Buyers

We delight every customer with great value through fresh, delicious, made-to-order sandwiches, and an exceptional experience so they want to tell their friends.

Our Food is prepared fresh daily and temperatures are monitored regularly. Gloves are required to be worn during all food handling procedures.

All SUBWAY restaurants follow the Gold Standard policies regarding prepared food and produce manufacturing and inspection specifications. All franchises are provided with information on proper food handling procedures in order to properly train our crew members.

The SUBWAY brand is involved with various civic, educational, and charitable organizations such as the United Way, March of Dimes, Habitat for Humanity, and Junior Achievement. The SUBWAY brand also partners with the American Heart Association and the American Red Cross on initiatives such as sodium reduction to make our healthy menu options even healthier.

On a local basis, SUBWAY franchisees are involved with countless schools, religious and community organizations.

2.2.2.2 Power of Suppliers

We have our own suppliers in Indonesia so we don't need overseas suppliers. We will make sure we got the best suppliers in order to support our product quality.

2.2.2.3 Threat of New Entrants

We think it's possible if someday there will be new entrants and become our new competitor. We will anticipate it with give our best service and best quality of our product in order to make us stay in our customer's mind.

2.2.2.4 Threat of Substitutes

There are so many fast food restaurants already opened now. They become the alternative product than can substitute us. But with great value through fresh, delicious, made-to-order sandwiches, and an exceptional experience that we provide, we think we still the best one.2.2.2.5 Nature of Rivalry among Competitors

Nowadays, phenomenon appears in the fast food industry (fast food) in Indonesia is increasing the number of fast food restaurants which cause the level of competition is more intense among the companies. Each of companies tries to give a good service and product in order to attract the consumer. And also it depends on their strategy. In every business always have the competition, so in this business industry also has the competition. There is so many competitors in fast food industry came from this country even the company from foreign country or it was called franchising company. 2.2.3 Distribution ChannelsWe distribute our product directly to our customer in the restaurant and also offer delivery service. First we just open a store in our local area, then when we have reach our breakeven point and already get the benefits from this business, we will open the new branch store in other region. For the customers who are willing to purchase our products but who are not in a position to reach the restaurants, one of the most effective ways in which we can deliver the products is through delivery service. We try to give same impression for those who order directly in restaurant and for those who order by delivery. 2.2.4 CostWith location flexibility and an easy-to-run operation built on simplicity and efficiency, our start-up costs are lower than most restaurants. The initial franchise fee is $15,000, and total investment can be as low as $78,600. Individual costs vary. (www.subway.com)2.2.5 Trends

There are so many fast food restaurants in whole Indonesia. Fast food nowadays is not only become a need but also become a lifestyle. There are so many busy people in Indonesia, and they want to eat something that fast and easy to serve and no need to wait for a long time. Not only busy people want something fast and easy to get but teenagers or young people also looking for food that fast and easy to serve.

Fast food means an establishment where consumption is paid first before they serve and where there are no waiters. However, the arrangements for food service and fast food can be divided into several categories: To lead, in the same restaurant or at home.

The fast food industry has long ceased to be an American phenomenon and extends across the globe at enormous speed, totaling more than 88,000 outlets spread around the world.

The menu for a fast food business is varied may range from cakes, tacos, pizzas, burgers, sandwiches, hot dogs.

These are characteristics of a fast food business

It served at a rapid rate

It is easily accessible.

Prices are moderate.

Manage process standards, cymbals, management and operation.2.2.6 Key success

Fast-food restaurants provide quick meals to people on the go and offer an alternative to traditional, sit-down restaurants. Opening a fast-food restaurant in a rural area of the country has significant advantages that could lead to exponential growth for the business.

Real Estate Costs

The less we spend for real estate, the more money we can spend for other start-up costs. Restaurant Competition

When open a fast-food restaurant in a rural place without much competition, our restaurant will stick out to potential customers. We have a purpose to open this business in remote area in this country. Additionally, we can capture a large percentage of the area's restaurant business and create a large group of loyal customers. If other competitors come to the town, we will have had the first-mover advantage because of our timing.

Food Deserts

Many rural areas and small towns are "food deserts" without any grocery stores in the immediate vicinity. People who live in food deserts must rely on groceries from small convenience stores or dine out when they are hungry. If we open a fast-food restaurant in a food desert, we are more likely to attract customers who do not want to make a long trek to a grocery store or buy groceries from a gas station's convenience store.

Advertising Costs

Compared to advertising media in larger cities, the cost to advertise in rural areas is typically low. Opening a fast-food restaurant requires sales working capital expenditures. Sales working capital is the capital spent to drive sales and attract customers. If our fast-food restaurant spends less money for radio spots, print ads and television commercials, we will earn more net income from operations at the end of each fiscal period.(www. smallbusiness.chron.com)

The others key success factor of fast food restaurants offered: These foods are consumed by people of all ages.

It is not difficult to prepare.

Always and when combined and consumed in moderation, should not be harmful to health.

They are practical dishes when people do not have much time to eat and little money.

Does not require a large space.

It can provide several services: Eating there to go and delivery.(www.taxday2009.com)

2.2.7 Summary of major industry influences

1. Fast food restaurant in Indonesia now not only become a need but also a lifestyle. Fast Food Industry in Indonesia has increasing day by day. 2. The SUBWAY brand is the world's largest submarine sandwich chain with more than 37,000 locations around the world. 3. We have our own suppliers in Indonesia so we don't need overseas suppliers. We will make sure we got the best suppliers in order to support our product quality. 4. We think it's possible if someday there will be new entrants and become our new competitor.5. Nowadays, phenomenon appears in the fast food industry (fast food) in Indonesia is increasing the number of fast food restaurants which cause the level of competition is more intense among the companies.

6. We distribute our product directly to our customer in the restaurant and also offer delivery service.7. The start-up costs are lower than most restaurants. The initial franchise fee is $15,000, and total investment can be as low as $78,600. Individual costs vary.8. Fast food means an establishment where consumption is paid first before they serve and where there are no waiters. However, the arrangements for food service and fast food can be divided into several categories: To lead, in the same restaurant or at home.9. Our key success in this business industry:

These foods are consumed by people of all ages.

It is not difficult to prepare.

Always and when combined and consumed in moderation, should not be harmful to health.

They are practical dishes when people do not have much time to eat and little money.

Does not require a large space.

It can provide several services: Eating there to go and delivery.2.3Customer analysis

2.3.1 Market Segmentation

Based on strategies for market segmentation, we will segment our market in four ways; we look from psychographic segmentation, geographical segmentation, demographic segmentation, and behavioral segmentation. For the first:

Psychographic segmentation: In our country, we can see most of people like to try new things, see the restaurant from the place, the luxurious quality, and healthy food with affordable prices. So, we try to open the Subway restaurant in Indonesia with a new look with different styles from some of the existing restaurant. We focus on place and taste from the food, for satisfy our customer.

Geographical Segmentation : in terms of geography is perfect with Indonesian people currently, with so many external cultures in Indonesia, we have the opportunity to open a Subway restaurant in Indonesia that sells sandwich, salad and other food which is typical food from other countries. We hope many people will interest with Subway restaurant.

Demographic Segmentation: in terms of demographics, we will provide healthy food suitable for all people, at an affordable price in accordance with the economic conditions in Indonesia.

Behavioral Segmentation: based on the customers needs, many customers like to order product with a simple way, so we will provide order online for make customer easy to order our product.

2.3.2 Customer Needs Analysis Customers need a restaurant that are have a place that easy to find and must be have a clean place. And about the taste, the food must be match in consumer tastes. For the prices, consumers need a cheap price. Therefore our product price must be affordable to the economy consumer. And one of the important things that consumer need is easy to order our product, so that we make order online strategy for provide consumer needs, in anytime and anywhere consumer can order our product.

2.3.3 Customer Groups Analysis We provide a wide range of sandwiches. Specifically for customer who is dieting we will give them special sandwich that are healthy and low fat. And for the vegetarian customer we will provide a vegetarian sandwich without meat just vegetables alone. Even more facilitate consumer, consumers can design their own sandwiches according to their individual tastes. And for consumers who want a sandwich with a variety of flavors they can choose the following options:

BLT, Black Forest Ham, Buffalo Chicken, Chicken & Bacon Ranch Melt, Chipotle Steak and Cheese, Cold Cut Combo, Italian BMT, Meatball Marianara, Oven Roasted Chicken, Roast Beef, Sweet Onion Chicken Teriyaki, Tuna, Veggie Delite, etc.

2.3.4 Customer Buying Decision - Process AnalysisResearchers found out, that customers go through a five-stage decision-making process in any purchase. Considering this process is mandatory for marketers, because it covers more than only the buying decision. Each customer passes through the following five stages: (1) Need recognition and problem awareness

Each buying process starts with a need, triggered by external or internal stimuli. In the case of Subway, the internal stimuli will mostly be identified as hunger, whether the external stimuli can be caused due to each kind of marketing (for example mass media: TV, Radio etc.), or the cognition of a smell. (Hollensen 2003, 118-123.)

(2) Information search

The aroused customer will start to search more information to compose his need. There are two different stages of arousal. The first and milder stage is a demanded invigilation. In this stage, the customer is very comprehensive for information. During a walk through the city, a customer in this phase will draw strong attention to food-advertisement. The second and stronger stage is the active information search. Customers within this phase search very actively, where they can fulfill their needs (catch some food). (Hollensen 2003, 118-123.)

The information about fulfilling the need can be gained from different sources for example, personal sources (family, friends), commercial sources (advertising, posters, and flyers) public sources (mass media) and experimental (using the product). The biggest amount of sources is obtained by commercial sources whether the independent public and personal sources are more effective. (ibid. 118-123.)

Furthermore, while gaining information, the customer is only able to focus on the food, of his choice, which is available. As the following graph shows, gaining information about fast food is limited to the awareness. In the following example, the chain Pizza Hut is not located in the customers city. For this reason, he has to choose his preference between the remaining food stores.

Although there is a Burger King available, the customer is not in the mood to eat this kind of fast food. Continuing from the processed set the customer has to make his first (consideration set) and second (Sunset Boulevard) preference, while McDonald's has been rejected. According to Subways statement on their website The goal of the chain's current advertising campaign is to increase the brand presence in the consumers "consideration set"--that is, which fast-food restaurants consumers consider when deciding where to eat. This graphic shows an example of how customers information research during the buying process of fast food and how it can take place and affects their buying behavior.(3) Evaluation of alternatives

The next step is the cognitive process valuation, about the product and offers. The consumer anticipated advantage convenience of one product. The review of the advantages will be based on personal experience, the brand image and the weighing of the product characteristics. (Hollensen 2003, 118-123.)(4) Purchase decision

Previous purchasing decisions often sub decisions must be made concerning brand, dealer, quantity, payment method and timing and risk avoidance. Because the fast food industry covers only low-involvement purchasing, the risk avoidance factors will not be considered.

However, two more factors can influence the buying process between the purchasing purpose and the purchasing decision. Positive or negative approach of a third

For example a customer of the target food stores complains that he did not enjoy his meal; a visitor of another food restaurant (possibly hold set) says, that they have very good offerings Unforeseen events

Due to lack of money the customer might have to choose a cheaper restaurant; the customer meets a friend who invites him to a dinner. (Hollensen 2003, 118-123.)(5) Post purchase behavior

After buying the product, satisfaction or dissatisfaction will arise. This dements on what has been suggested from the products and the actual outcome. Even if the customer was enjoying the Subway sandwich during the stay in the restaurant, other criteria like interior, cleanliness and service of the restaurant can influence his or her opinion. Even afterwards, while leaving the restaurant satisfied, the frame of mind can change when seeing a comparable offer for a lower price, at a competitors restaurant. Awareness of the fact that dissatisfaction leads into more communication than satisfaction, is mandatory. Due to the word of mouth and opinion leaders, dissatisfaction in post purchasing should be prevented due to after sales service customer hotlines and quality guarantees. (Hollensen 2003, 118-123.)

The fast food industry and the offered products do not obtain high involvement like for example the market of racing cars. This has two reasons. To buy fast food, the customer must not be aware of any technical knowhow and does not have any risk (besides several diseases which might occur when eating too much fast food) when choosing the wrong product (meal). The price level is compared to other products, low. These factors make the decision making process (with information research) not relevant compared to high technical or high price products.2.3.5 Summary of Major Customer-Related IssuesSubway restaurant is a one of franchise that focuses for sell food, such as: sandwiches. Our way in attract customers, start from the strategic place, cleanliness of the place, and sandwiches with different tastes, affordability prices, and a restaurant with modern style.

1. Based on strategies for market segmentation, we will segment our market in four ways; we look from psychographic segmentation, geographical segmentation, demographic segmentation, and behavioral segmentation2. Customers need a restaurant that are have a place that easy to find and must be have a clean place. And about the taste, the food must be match in consumer tastes. For the prices, consumers need a cheap price. Therefore our product price must be affordable to the economy consumer.3. Specifically for customer who is dieting we will give them special sandwich that are healthy and low fat. For the vegetarian customer we will provide a vegetarian sandwich without meat just vegetables alone. Consumers can design their own sandwiches according to their individual tastes. And many more taste options that we offered to our customers4. First when they search for the information they will find about our product through the advertisemen that we have made, then in the evaluation process, customers can know well about us when their friend told them about Subway quality in the another country. Next step is purchase. After they purchase product from our store, they will feel different because of the product that we offered has the high quality and great taste ever.2.4Competitor Analysis

2.4.1 List of Major Competitors and Any Potential Competitors- Major competitors: According to our opinion, the existing competitors for now namely the restaurant that sells products like sandwiches in other restaurants such as: burger king, McDonald's, KFC.

- Potential competitors: KFC, McDonald's, and Burger King, that three restaurant has great potential to become our competitors. Because, at this time many people in Indonesia are very familiar with that restaurant, almost in every town in Indonesia has the franchise. One of the main factors also the restaurant is the largest chain in the world.2.4.2 Identification and Analysis of Strategic Groups

According to some people, KFC has a high price compared to McDonald's. Although McDonald's has a low selling price, but the composition of the food that they give more than McDonalds. Most people also agree that KFC has higher calories compared with other competitors. Thus, they prefer to go to McDonald's. However, KFC is a fast food restaurant that better known by many people, so between KFC and McDonald's have different values. While Burger King, is a famous fast-food restaurant with their burger. KFC and McDonald's also provide a burger, but not complete like in Burger King Restaurant. Because this restaurant more focus in selling "Burger" so compared to KFC and McDonald's are also selling burgers on their menus, most of people that like burger prefer to eat burger in Burger King fast food restaurant. So, the three restaurants have different advantages.

2.4.3Major Competitors2.4.3.1Size, Growth and ProfitabilityA.SIZE

1. KFC: KFC have restaurant in 109 countries and territories around the world. KFC operates more than 5,200 restaurants in the United States and more than 15,000 units around the world.(www.kfc.com)2. McDonalds: McDonalds is the leading global food service retailer in the world with more than 30,000 restaurants, in more than 100 countries.(www.mcdonalds.com)3.Burger King : Burger King is the second largest chain in the world with more than 11,200 restaurants in 69 countries. 90% of Burger King restaurants are independent franchises.(www.bk.com)B.GROWTH

1. KFC :

1960: The Colonel Sanders hard work on the road begins to pay off and there are 190 KFC franchisees and 400 franchise units in the U.S. and Canada.

1963: Sanders had franchised to more than 600 outlets in the United States and Canada.

1964: KFC has more than 600 franchised outlets in the United States, Canada and the first overseas outlet, in England.

1967: KFC had become the U.S.'s sixth largest restaurant chain by volume. By 1968, Kentucky Fried Chicken was the largest fast-food business in America.

1970: KFC grew to 3,400 fast food outlets

1979: KFC cooks up 2.7 billion pieces of chicken. There are approximately 6,000 KFC restaurants worldwide with sales of more than $2 billion.

1987: KFC still had room to grow in the Northeast and Mid-Atlantic regions. The company planned opening 150 outlets. Japan is a major market, had 520 stores, Great Britain had 300, and South Africa had 160.

2001: Kentucky Fried Chicken was the most recognized foreign brand in China, where the company had 500 restaurants. KFC also had about 300 outlets in Thailand, and more than 150 in Indonesia.

2006: KFC had 1,700 restaurants in China

In 2007: there were more than 1,800 KFCs operating in over 400 cities throughout China.

2010: there add about 600 outlets

In 2011: there were over 17,000 KFC outlets in 105 countries and territories around the world.

2. McDonalds :

McDonald's grew slowly for its first three years. By 1958, there were 34 restaurants. In 1959, however, Kroc opened 68 new restaurants, bringing the total to 102 locations. In 1968, McDonald's opened its 1,000th restaurant. In 1987 the company opened 600 new restaurants. And the 10,000th unit opened in April 1988. In 1995 McDonalds opened 1,130 units. Incredibly, the company reached the 20,000-restaurant mark in only eight more years, in mid-1996. Only about 400 new McDonald's were built in 1997. By the end of 1997 the total had surpassed 23,000, and by that time McDonald's was opening 2,000 new restaurants each year, an average of one every five hours. By the early 1990s the company had established itself in 58 foreign countries and operated more than 3,600 restaurants outside the United States. Growth in sales at stores open more than a year (known as same-store sales) fell in both 2000 and 2001. Late in 2001 the company launched a restructuring involving the elimination of about 850 positions, 700 of which were in the United States, and some store closings. The 2002 quarterly loss, which included the closure of more than 700 restaurants (mostly in the United States and Japan), the elimination of 600 jobs, and charges of $853 million. McDonald's continued to curtail store openings in 2004 and to concentrate on building business at existing restaurants. Much of the more than $1.5 billion budgeted for capital expenditures in 2004 was slated to be used to remodel existing restaurants. McDonald's also aimed to pay down debt by $400 million to $700 million and to return approximately $1 billion to shareholders through dividends and share repurchases. In July 2011, McDonald's announced that their largest restaurant in the world will be built on the 2012 London Olympics site. The restaurant will contain over 1,500 seats and is half the length of an American Football field. Over 470 staff will be employed serving on average (during the 2012 Olympics) 100,000 portions of fries, 50,000 Big Macs and 30,000 Milkshakes. This restaurant will overshadow the current largest McDonald's in the world in Moscow, Russia. In January 2012, the company announced revenue for 2011 reached an all-time high of $27 billion, and that 2400 restaurants would be updated and 1300 new ones opened worldwide.

3. BURGER KING :

Even though the company had rapidly expanded throughout the state until its operations totaled more than 40 locations in 1955. In 1959, they ran the company as an independent entity for eight years (eventually expanding to over 250 locations in the United States). In 1967, BK had grown to 274 restaurants in the United States and had an estimated value of $18 million (USD). By 1970 the company had grown to over 350 store across the country. By 1971 they owned 351 stores with sales of $32 million. In 1982 Burger King directly attacked its competitors, alleging that Burger King's grilled burgers were better than McDonald's and Wendy's fried burgers. Both competitors sued over the ads, and Wendy's challenged Burger King to a taste test (a challenge that was pointedly ignored). In return for dropping the suits, Burger King agreed to phase out the offending ads gradually, but Burger King came out the winner in its $25 million "Battle of the Burgers": the average volume of its 3,500 stores rose from $750,000 to $840,000 in 1982, sales were up 19 percent, and pretax profits rose 9 percent. In September 1989, Grand Met acquired several restaurant properties from United Biscuits (Holdings) plc, including the Wimpey hamburger chain, which included 381 U.K. outlets and 148 in other countries. By the summer of 1990, 200 Wimpeys had been converted to Burger Kings, bolstering the company's foreign operations, a traditional area of weakness. Over the next several years, Burger King was much more aggressive with its international expansion, with restaurants opening for the first time in Hungary and Mexico (1991); Poland (1992); Saudi Arabia (1993); Israel, Oman, the Dominican Republic, El Salvador, Peru, and New Zealand (1994); and Paraguay (1995). By 1996, Burger King had outlets in 56 countries, a dramatic increase from the 30 of just seven years earlier. While Burger King lags behind McDonald's in international locations by over 12,000 stores, as of 2008 it had managed to become the largest chain in several countries including Mexico and Spain. At the end of fiscal year 2011, Burger King reported it had more than 12,400 outlets in 73 countries; of these, 66 percent are in the United States and 90 percent are privately owned and operated. At the end of its 2011 fiscal year, Burger King is the second largest chain of hamburger fast food restaurants in terms of global locations. The company plans to add over 250 stores in these Asian territories, as well as other places such as Macau, by the end of 2012.

C.PROFITABILITY

1.McDonalds

Margins % of Sales2002-122003-122004-122005-122006-122007-122008-122009-122010-122011-12TTM

Revenue100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00

COGS49.7849.7849.1869.0967.6465.3163.2761.3559.9760.4360.63

Gross Margin50.2250.2250.8230.9132.3634.6936.7338.6540.0339.5739.37

SG&A31.1030.6029.9310.8510.8310.3910.019.829.698.869.08

R&D

Other5.413.102.310.400.937.28-0.68-1.25-0.70-0.88-0.79

Operating Margin13.7216.5218.5719.6620.5917.0227.3930.0831.0431.5831.08

Net Int Inc & Other-2.93-2.83-1.77-1.56-1.29-1.35-1.21-1.56-1.96-1.92-1.94

EBT Margin10.7913.6916.8018.0919.3015.6826.1828.5229.0829.6729.14

Profitability2002-122003-122004-122005-122006-122007-122008-122009-122010-122011-12TTM

Tax Rate %40.3135.7228.8529.7031.0434.6329.9629.8429.3431.3231.89

Net Margin %5.808.5811.9512.7216.4210.5118.3420.0120.5520.3819.85

Asset Turnover (Average)0.660.690.710.710.730.780.810.780.770.830.83

Return on Assets %3.845.958.549.0012.018.2014.9115.5115.9016.9416.48

Financial Leverage (Average)2.332.131.961.981.881.922.132.152.192.292.44

Return on Equity %9.0413.2217.4017.7323.1615.5830.1033.2034.5137.9240.01

Return on Invested Capital %4.627.0110.1010.6914.419.8817.9018.8819.4920.7520.54

2. Burger King

Margins % of Sales2002-122003-122004-122005-122006-122007-122008-122009-122010-122011-12TTM

Revenue100.00100.00

COGS66.1362.54

Gross Margin33.8737.46

SG&A17.8717.79

R&D

Other0.481.29

Operating Margin15.5218.38

Net Int Inc & Other-10.61-12.62

EBT Margin4.915.76

Profitability2002-122003-122004-122005-122006-122007-122008-122009-122010-122011-12TTM

Tax Rate %23.1923.74

Net Margin %3.774.39

Asset Turnover (Average)0.420.39

Return on Assets %1.571.72

Financial Leverage (Average)5.354.89

Return on Equity %8.408.40

Return on Invested Capital %2.102.25

3.KFC

Margins % of Sales2003-032004-032005-032006-032007-032008-032009-032010-032011-032012-03TTM

Revenue100.00100.00100.00100.00

COGS52.6453.7254.97

Gross Margin47.3646.2845.03

SG&A43.1542.3042.32

R&D

Other0.02

Operating Margin4.213.982.71

Net Int Inc & Other-0.30-0.470.122.40

EBT Margin3.913.502.832.40

Profitability2003-032004-032005-032006-032007-032008-032009-032010-032011-032012-03TTM

Tax Rate %47.2739.2255.7957.72

Net Margin %2.062.131.251.02

Asset Turnover (Average)2.942.132.142.22

Return on Assets %6.064.542.682.25

Financial Leverage (Average)1.721.761.791.74

Return on Equity %10.437.894.743.86

Return on Invested Capital %10.287.774.673.81

2.4.3.2 Strengths and Weaknesses

1.Mcdonals

Strengths

It is market leader in both domestic and international market. Has its worldwide presence while having huge impact It has been facing long term economic growth and is taking advantage by expanding itself globally.

Weakness

Market saturation has made the expansion difficult for McDonalds McDonalds is very slow in the process of product innovation.

2.KFCStrengths

Brand Equity

Only to McDonalds in Foreign Sales$550M

Strong Cash Flows

Generate $1B each year

Very strong Internationally UK, Middle East, Thailand, China, Japan, Korea, Mexico

Strong Franchise and License Fee revenues for cash flow.

Interactive relationship marketing

Strong trademarks recipes

Ranks highest among all chicken restaurant chains for its convenience and menu variety.

Weakness

Recent drop in sales for KFC

Failed to rank in top 20 in growth in 2000.

Same Store sales declined

Lack of point of scale scanning system

Admitted inability to provide quality service

Lack of knowledge abut their customers

Lack of relationship building with employees , customers and suppliers

Lack of focus on R&D.

3.BURGER KING

Strengths

Huge popular brand name and high brand loyalty

Burger King serves a lot of burgers that is typically not available in other fast food restaurant.

Product differentiation with large size.

Growth model not very capital intensive.

Strong brand equity in fast food.

Weakness

High fat and high calorie food not good for health conscious people

Franchise management

Burger King does not advertise their products like their competitors

Lesser international appeal.2.4.3.4 Cost structure1.KFC

Initial InvestmentFree Standing OutletName of FeeLowHigh

Building Construction Costs$425,000$565,000

Equipment, Signage, and Dcor$216,000$366,000

Site Work$100,000$250,000

Miscellaneous Permits, Utility Deposits, Licenses, and Architectural Costs$50,000$100,000

Application & Background Check Fee$300$500

Initial Franchise Fee$45,000

Development Services Fee$0$35,000

Real Estate$400,000$1,000,000

Grand Opening Expense$5,000

Start-up Inventory$10,000

Training Expenses$2,500$9,500

Miscellaneous Opening Costs$5,000$10,000

Additional Funds$50,000$75,000

Total Estimated Expenditure$1,308,800$2,471,000

Ongoing FeesType of FeeAmount

RoyaltyThe greater of 5% of gross revenues or a minimum of $825, whichever is greater per month (minimum fee subject to adjustment based upon the Consumer Price Index).

Local Advertising2.5% of gross revenues (or as agreed to with local advertising co-ops).

National Cooperative Advertising4.5% of gross revenues.

Renewal$6,750 (subject to adjustment based upon the Consumer Price Index)

TransferFor existing franchisees $3,375 for first outlet and $1,688 for each additional outlet in the same transaction.For new franchisees $6,750 for first outlet and $3,375 for each additional outlet in the same transaction.

AuditEntire cost of audit, including expenses of auditing personnel.

Administrative$500 services fee for each transaction in which KFCC processes changes to franchisees corporate structure or when processing other approved modifications

Additional Services$0 - $2,000

Costs, expenses and attorneys' feesWill vary

IndemnificationWill vary

Late royalty payments1- 1.5% per month

Food Standards Consultations (FSC)$265 per follow-up assessment.

Support Services and Software Maintenance for KFCC's MERIT System$160.34 per unit per month.

Year of FDD: 2012

(http://www.franchisedirect.com)

2.McDonaldsInitial Investment:Name of FeeLowHigh

Initial Franchise Fee$45,000- Traditional

$22,500 - STO& STR

$0 - Satellite$500 - Satellite

Real Estate and Building 3 months rentBase Rent

$450- Traditional$310,500- Traditional

$750 - STO& STR$41,100 - STO& STR

$1,425 - Satellite$47,450 - Satellite

Percentage Rent

0%- Traditional42.5%- Traditional

4% - STO& STR17.3% - STO& STR

4.25% - Satellite24.5% - Satellite

Signs, Seating, Equipment, and Dcor$707,700- Traditional$1,353,600- Traditional

$604,400 - STO& STR$819,000 - STO& STR

$50,000 - Satellite$396,000 - Satellite

Opening Inventory$6,000- Traditional$40,000- Traditional

$12,000 - STO& STR$25,000 - STO& STR

$9,000 - Satellite$17,000 - Satellite

Miscellaneous Opening Expenses$60,300$61,600

Travel and Living Expenses while training$3,000$23,000

Additional Funds 3 months$182,000- Traditional$322,000- Traditional

$120,000 - STO& STR$239,000 - STO& STR

$91,000 - Satellite$112,000 - Satellite

ESTIMATED TOTALS$1,004,450- Traditional$2,155,700- Traditional

$822,950 - STO& STR$1,231,200 - STO& STR

$214,725 - Satellite$657,500 - Satellite

Ongoing Fees:Name of FeeAmount

Service Fee4% of Gross Sales

RentVaries

Advertising and PromotionNot less than 4% Gross Sales

Audit/ Inspection FeeCost of Audit

Satellite Annual Fee$500 to $2,500

Satellite RentVaries

STO RentVaries

BFL RentVaries

Relocation Contribution$50,000

New POS Integration Fee$1,000 integration fee (one-time fee); $200 annual integration fee

Restaurant File Maintenance (RFM) Fee$150

R2 D2 Software Maintenance Fee$125

New POS Software Fee$1,600 license fee (one-time fee); $400 annual software maintenance fee

Next Gen Cashless Fee$216 license fee (one-time fee); $154 annual maintenance fee

Help Desk Support Fee$2,040

Microsoft Subscription License$449

Restaurant System Management (RSM)$250

Restaurant Integrated Data Movement (RIDM)$75

e*Restaurant Fee$54

Identity Management Fee$75

Store Mail (email account) Fee$79.80

Date of FDD: 2012(http://www.franchisedirect.com)3.King BrugerInitial InvestmentFor the Edge-60 Building Type (Several Other Building Options, Smaller and Larger, Available in FDD)Name of FeeLowHigh

Franchise Fee$50,000

Travel and Living Expenses while Training$0$25,000

Real Property/ Occupancy Charge$300,000$750,000

Civil & Architectural Drawings / Professional Fees$25,000$45,000

Zoning Expenses$5,000$25,000

Improvements / Construction$550,000$900,000

Landscaping$25,000$55,000

Equipment$192,000$236,000

Decor Package$40,000$75,000

Signage & Drive-Thru$60,000$115,000

Pre-Opening Wages$52,000$56,000

Opening Inventory$6,000$8,000

Cash and Inventory Control System$35,000$50,000

Insurance$14,000$22,000

Working Capital / Additional Funds$45,000$90,000

Business Licenses, Utility Deposits, Lease Deposits, and Payments$10,000$20,000

Total$1,409,000$2,522,000

Ongoing Fees:Name of FeeAmount

Royalty4.5% of monthly gross sales

Advertising4% of monthly gross sales

Rent (where property leased from franchisor)Varies

Building Improvement Payments(certain BKLs only)$500 per month

Late charges/ interest/stamp taxLesser of 18% per annum or maximum rate allowed by Florida law

Transfer of Interests$2,000

Application Fee$250 - $5,000

New Franchisee Training Fee$2,000

Entity or LLC FeesUp to $5,000 per Entity; plus up to $1,000 per restaurant transferred to Entity or LLC

Franchise Extension Fee$2,500 annually

Investment Spending (marketing)Collectively agreed upon amount

Sales Transfer StudyMinimum $5,000; Maximum $8,000; Average $6,400 - Per potentially affected Restaurant

Sales Impact ContributionVaries

Gift Card ServicesVaries

Miscellaneous Reimbursements, Purchases, ServicesVaries

Walk-Thru$500

One Time Cure FeeVaries depending upon whether franchisee is under the TRA or the MTRA

Audit ExpensesWill vary under circumstances

IndemnityWill vary under circumstances

Costs and Attorneys' FeesWill vary under circumstances

Date of FDD: 2012

2.4.3.4 Organization and Culture1.KFC Profile

KFC is the one of the world's largest fast-food chains, the company owns and franchises more than 16,200 outlets in about 100 countries. (More than 5,100 locations are in the US.) The restaurants offer the Colonel's trademark fried chicken (in both Original Recipe and Extra Crispy varieties) along with chicken sandwiches, chicken pot pies, crispy chicken strips, mashed potatoes and gravy, and potato wedges. Its locations can be found operating as free-standing units and kiosks in high-traffic areas. More than 25% of the restaurants are company-operated.

President and Chief Concept Officer: Roger Eaton

COO: Laurance (Larry) Roberts

Chief Marketing Officer: Jason MarkerPolicies :

KFC collect information from and about you.

Contact information. For example, KFC might collect customer name and street address. KFC also collect their phone number or email address.

Payment and billing information. For example, KFC collect customer credit card number and zip code when they buy one of KFC products.

Demographic information. KFC may collect information about their services to customer like or products they buy. KFC might collect this as part of a survey, for example.

KFC collect information in different ways.

KFC collect information directly from you. For example, if the customer register for a promotion. KFC also collect information if they post a comment or make a request.

KFC collect information from the customer passively.

KFC get information about you from third parties. For example, if you use one of the integrated Facebook features on KFC websites, Facebook will give KFC certain information about you.

KFC use information to respond to your requests or questions. For example, KFC might use your information to confirm your registration for a program or contest, or fulfill prizes or premiums in a promotion. KFC may use your friends email address if you send them features on they site.

KFC use information to improve they products and services. KFC might use your information to customize your experience with KFC.

KFC use information to look at site trends and customer interests. KFC may use your information to make their website and products better. KFC may combine information they get from you with information about you they get from third parties.

KFC use information for security purposes. KFC may use information to protect their company, their customers, or their websites. For example, in the event of a breach, they may use your contact information to contact you about that incident.

KFC use information for marketing purposes. For example, KFC might send you information about special promotions or offers. They might also tell you about new features or products. These might be their own offers or products, or third-party offers or products their think you might find interesting.

KFC use information to send you transactional communications. For example, KFC might send you emails about a purchase you made with they. KFC might also contact you about this policy or their website terms.

KFC use information as otherwise permitted by law.

KFC may share information if they think they have to in order to comply with the law or to protect theirselves. For example, KFC will share information to respond to a court order or subpoena. KFC may also share it if a government agency or investigatory body requests. Or, KFC might also share information when they are investigating potential fraud. This might include fraud they think has happened during a sweepstakes or promotion.

KFC and they vendors use several common tracking tools. These may include browser cookies. KFC may also use web beacons and similar technologies. KFC use these tools:

To track new and recognize past customers.

To store your password if you are registered on our sites.

To improve our website.

To provide you with advertising content in which we think you will be interested. To do so, we may observe your behaviors on this website and other websites. We may also collect information about your browsing history.

To better understand the interests of our customers and our website visitors.

2.McDonalds Profile

McDonald's is the largest chain of quick service restaurants in the world. McDonald opened their first restaurant in Ireland in 1977 on Dublin's Grafton Street and now they operate 83 restaurants throughout Ireland. They serve 150,000 customers per day and directly employ over 4,000 people. McDonald's are an equal opportunities employer. They hire from all age, culture and ability groups and provide employment to parents, students, teenagers, people with disabilities, senior citizens, people seeking part-time jobs with flexible hours and those looking for a long term career.

Honorary Chairman: Fred L. Turner

Chairman: Andrew J. (Andy) McKenna Sr.

Vice Chairman and CEO: James A. (Jim) SkinnerPolicies:

1. Types of Information McDonalds Collect and How It Is Used

McDonalds only gathers personal information, such as, first and last names, addresses and email addresses, when voluntarily submitted by you. For example, personal information may be collected from you in order to get your feedback on their web sites and their products or to enter you in one of their contests or sweepstakes.

2. McDonalds Sharing of Personal Information

McDonald's may share personal information within the McDonald's Family. The McDonald's Family includes McDonald's Corporation, their franchisees, their subsidiaries and their affiliates. Of course, any use of this information by the McDonald's Family will comply with this policy. Occasionally, with your permission, they will send marketing information to you, such as discount coupons, information about new product offerings, etc. If you do not select to receive such materials, they will not send to you.

Companies may be engaged by McDonald's to perform a variety of functions, such as, fulfilling orders, assisting with promotions, providing technical services their web sites, etc. These companies may have access to personal information if needed to perform such functions. However, these companies may only use such personal information for the purpose of performing that function and may not use it for any other purpose.

McDonald's does not sell, transfer or disclose personal information to third parties outside the McDonald's Family. However, with your permission, they will, on occasion send marketing information on behalf of one of their business partners about products or services they provide that may be of interest to you. You may be asked if you wish to receive marketing materials from McDonald's business partners. If you elect to receive such materials, McDonald's will not share your personal information with such partners but rather will send a mailing or e-mail on behalf of the partners.

McDonald's reserves the right to use or disclose any information as needed to satisfy any law, regulation or legal request, to protect the integrity of the site, to fulfill your requests, or to cooperate in any law enforcement investigation or an investigation on a matter of public safety.

3. Childrens Privacy Notice

McDonald's understands the importance of privacy to visitors to their Web sites. KFC are especially committed to protecting the privacy of children who visit they Web sites. This Childrens Privacy Notice is designed to answer your questions regarding their practices with respect to personal information they collect through their Web sites from children under the age of 13. 3.Burger King ProfileThis king rules one whopper of a fast-food empire. Burger King Worldwide operates the world's #3 hamburger chain by sales (behind McDonald's and Wendy's) with more than 12,500 restaurants in the US and more than 80 other countries. In addition to its popular Whopper sandwich, the chain offers a selection of burgers, chicken sandwiches, salads, and breakfast items, along with beverages, desserts, and sides. Many of the eateries are stand-alone locations offering dine-in seating and drive-through services; the chain also includes units in high-traffic locations such as airports and shopping malls. Investment firm 3G Capital took the company in private in 2010 before taking it public again in mid-2012.

EVP and Chief Brand and Operations Officer: Jonathan (John) Fitzpatrick

EVP and CFO: Daniel S. SchwartzDirector Business Development: Jim SchwandtPoliciesBURGER KING CORPORATION GENERAL ONLINE PRIVACY POLICY

Burger King Corporation is sensitive to the privacy concerns of visitors to its websites. The purpose of this General Online Privacy Policy is to describe what types of personal information they collect from visitors to Burger King Corporations website, http://www.bk.com or any other site operated by Burger King Corporation or by a Service Provider on behalf of Burger King Corporation, including without limitation www.bkdelivers.com (collectively the BKC Websites), the purposes for which they use the information, what rights you have regarding your personal information, and to whom and under what circumstances they disclose your personal information. This General Online Privacy Policy applies to their information collection, use, and disclosure practices for website visitors ages 13 and over.

COLLECTION OF INFORMATION

Collection and Use of Non-Personal Information

Certain non-personal information about BKC Website visits is recorded by the standard operation of the Internet servers on which BKC Websites are hosted. The non-personal information that they collect may include IP addresses, the type of operating system in use (e.g., Macintosh or Windows), the type of browser being used by the visitor (e.g., Netscape or Internet Explorer), the number and frequency of visitors to BKC Websites, and the site the visitor was on immediately before visiting the BKC Website. When you view BKC Websites or use website features, they may collect certain non-personal information from you by using small text files known as cookies. Burger King use cookies for several purposes, such as to recognize visitors to their websites, to determine the number of unique visitors to their websites, to ascertain which website pages you visit, and to conduct internal reviews of they site. Burger King may associate information they collect via cookies with the personal information they collect online. Burger King may use the combined information, for example, to personalize your experience on the website.

Collection of Personal Information

Burger King only collect personal information (which may include first and last name, gender, birth date, home or other physical address, e-mail address, home or mobile phone number, number of children in the household, frequency of visits to BURGER KING restaurants, credit card information, online account numbers, and password) when you voluntarily submit it to they or voluntarily register as a user of a BKC Website. For example, you may choose to provide they with your personal information in order to participate in a sweepstakes or contest, purchase gift certificates, gift cards, or other merchandise, provide content submissions, make suggestions for the operation of they site, or participate in an online interactive activity or marketing research.

Use of Personal Information

Burger King Corporation or Service Providers acting on its behalf may use information collected from website visitors to for any of the following purposes: (1) to send marketing and other communications to they visitors about BURGER KING products or about the products and services of promotional partners that are not owned or affiliated with BKC; (2) to allow visitors to communicate with others, such as their friends, (3) to allow they to notify visitors of upcoming events, promotions, or activities on they site; (4) to conduct internal reviews of they site, to determine the number of visitors to the site (5) to help Burger King better understand visitors' use of they site; (6) to fulfill prizes, awards and purchases; (7) to respond to specific requests from they visitors; (8) to provide any necessary notices to they visitors; (9) to conduct marketing research; (10) to protect the security or integrity of they site; and (11) in connection with inquiries regarding becoming a franchisee of a BURGER KING restaurant or selling real estate to Burger King Corporation. To opt out of emails or SMS communications, please follow the instructions in the email or SMS message.

Disclosured of information

Burger King Corporation will transfer or otherwise disclose the information it collects from its website visitors to employees and independent contractors of Burger King Corporation, its subsidiaries, affiliates, and Service Providers if the disclosure will enable that party to perform a business, professional, or technical support function for Burger King Corporation, or if required to do so by law. They will also transfer or otherwise disclose personal information in response to judicial process, to comply with legal requirements, and as permitted under provisions of law, to provide information to law enforcement agencies or in connection with an investigation on a matter related to public safety. They may also use your information as permitted by law to protect they rights or property, a BKC Website, or its users.

Security of information

Burger King maintain physical, electronic, and procedural safeguards to guard your personal information.2.4.3.5 Current and past strategies

1.KFC strategies Market Development: KFC will introduce their present and new products and services into new geographic/ demographic areas.

Product Development : Bring back rotisserie chicken

Concentric Diversification : Add more to KFC product and service variety to the patients

Company Strategy Primary objective is to take advantage of the potential growth in other countries, to establish a strong position and to develop their image. Key Success Factors are ever continuing cost savings through R&D, innovations and use of new technology to work efficiently. These success techniques will lower costs and increase profits in the industry. KFC uses an integrated low cost/differentiation leadership, since it can count on its brand name and original taste and recipes to be unique while at the same time compete on price using the benefits of cost savings from economies of scale.2.McDonalds strategies :

To serve good food in a friendly and fun environment

To be a socially responsible company

To provide good returns to its shareholders

To provide its customers with food of a high standard, quick service and value for money

The low price and volume: Mc Donald's has in the world, a policy of low prices and volume, major elements of its competitive advantage. To deliver all meals daily, prices must be affordable. McDonald's goal is to attract consumers the most regularly possible, it should not propose menus at high prices. Product prices are not identical in all countries and within countries there are also different prices depending on the location. So they vary according to local competition and promotions, sometimes in each restaurant. Moreover, it should be noted that 70% of McDonald's sales are made each day over a period of four hours. McDonald's has decided to try to change eating habits to attract more consumers during the peak hours for reduced rates. An example of this aggressive pricing policy: making the second menu half-price for all menu purchased the evening before 6 o'clock.

3.Burger King strategies:

Burger King is creating a good amount of marketing buzz around their new menu and the experience that consumers will have. They have redeveloped their menu, which is somewhat reminiscent of McDonalds to be more health conscious by adding salad and wraps options. They will somehow be incorporating a touch screen into their point of sale and using food trucks to get their product out to the masses.

Burger King continue to emphasizing its barbell strategy of promoting both value and premium menu items and they launch of its new breakfast menu will help increase traffic and sales. Burger King executives expanded on these strategies.

Track their sales so they can make marketing programs to tackle a downturn.

2.4.4Summary of Major Competitor Related Issues

According to some people, KFC has a high price compared to McDonald's. Although McDonald's has a low selling price, but the composition of the food that they give more than McDonalds. Most people also agree that KFC has higher calories compared with other competitors. Thus, they prefer to go to McDonald's. However, KFC is a fast food restaurant that better known by many people, so between KFC and McDonald's have different values. While Burger King, is a famous fast-food restaurant with their burger. KFC and McDonald's also provide a burger, but not complete like in Burger King Restaurant. Because this restaurant more focus in selling "Burger" so compared to KFC and McDonald's are also selling burgers on their menus, most of people that like burger prefer to eat burger in Burger King fast food restaurant. So, the three restaurants have different advantages. KFC

KFC have restaurant in 109 countries and territories around the world. KFC operates more than 5,200 restaurants in the United States and more than 15,000 units around the world.

McDonalds

McDonalds is the leading global food service retailer in the world with more than 30,000 restaurants, in more than 100 countries.

Burger King

Burger King is the second largest chain in the world with more than 11,200 restaurants in 69 countries. 90% of Burger King restaurants are independent franchises. 2.5

Analysis of Opportunities and Threats (swOT)a.Opportunities

- Subway industry is still growing steadily despite of its slowdown in the economy.

-Subway can invest more to expand its business in the international market and also make improvements in its decoration and look to encourage dine-in.

-The target costumer market group being from middle to upper- middle class.

- People turning healthier consciously.

- Continue to revise and refresh menu offerings.

- Signs of growth in the virgin market sector.

- By improving the customer service model customer loyalty and satisfaction can be increased.b.Threats

-The company faces serious threats from some of the large fast food chains in the world including brands like KFC, McDonalds etc.

-It had an easy entry into the industry being one the healthier fast food chains.

- Subway has a large loyal customer base which developed over the years.

-Economic downturn is one of the major threats caused because of the current economic recession. Sales of sandwiches are growing 15 percent annually, outpacing the 3 percent sales growth rate for burgers and steaks. This increase in sales of the sandwiches has been a result of decreases in consumer interest in hamburgers and fries and increases in demand for healthier options.Section IIIInternal Analysis3.1

Internal Analysis (SWot)a.Strength

- Subway has positioned itself in places like hospitals, churches, schools and popular retail stores like Home Depot and Wal-Mart which makes the start-up cost of franchises low. Because of such great strategies the company has become the leading sandwich franchise world-wide in a very short period of time.

- Subway is known to be a company that offer healthy subs sandwich that are preferred and are much better as compared to food items offered by other fast-food chains like McDonalds. The food menu of the Subway reflects the high demand of healthy and fresh fast-food.

- Also the marketing and promotional strategies adopted by the company are an example of the positive focus on demand, consumer preferences, innovative trends and product leveraging.

- Subway currently has more stores in the United States than does McDonalds which adds to its strengths.b.Weaknesses

- Change is good in moderate amounts; however the company must be careful by not believing that it must continually change its offerings in order to remain the market leader. Too much change too soon can cause a company to lose favor with customers and Subway has already shown signs of too much change, altering its menu multiple times in the last five years.

- The dcor and the look of the franchises seem to be old and outdated.

- Service commitment is not consistent from store to store.

- This could be related to staff as the turnover rate of the employees is very high which explains why they lack motivation.

- Other weaknesses include a small menu list, an increasing operational cost of franchise etc.3.1.1Marketing Skills and ResourcesAside from being a proven business with a low start-up cost, SUBWAY is continually ranked the #1 Franchise.a. Worldwide Growth

When own a SUBWAY restaurant, were part of the worlds largest restaurant chain and one of its most recognized brands, and well get the support and experience that comes with it. Be part of a winning brand that keeps customers coming back for delicious meals made just the way they want.b. Food

SUBWAY is the undisputed leader in fast, healthy food. Our easy-to-prepare sandwiches are made to order right in front of the customer, precisely the way they want - using freshly baked breads, select sauces and a variety of delicious toppings.c. Support Network

When join the SUBWAY family, get world-class support before even make the first sandwich and well beyond. The franchise support system features:

Training

Product development

Advertising

Purchasing cooperative

Field support, and much more!3.1.2Finance and Accounting Skills and Resources

A SUBWAY stores start-up costs are exceptionally low for a franchise of the size and stature and franchisees can often purchase dependable outlet equipment through the SUBWAY brands purchasing power. In fact, in some cases, traditional SUBWAY outlets can be opened for as little as c. 100,000.

The total initial investment will depend on many factors including location, rent, outlet size and equipment. The franchise agreement is for 20 years and renewable for 20 years (subject to terms and conditions).

An important consideration in purchasing first SUBWAY outlet is how to finance investment. A good arrangement is to have 50% of the total capital requirements available in cash and sufficient collateral to obtain funding for the balance. Below are links to lenders that can offer support.

Royalties and fees paid to the SUBWAY brand are based on gross sales minus sales tax. The royalties are 8% to the SUBWAY brand. A 4.5% advertising fee is paid to the 'Franchisee Advertising Fund (FAF)'. Franchisees in some markets may vote to increase the marketing fee percentage for local advertising purposes.

The franchise fee of 10,000* for outlets is one of the lowest on the market, despite the size of the chain.

One reason the costs are so low is that SUBWAY outlets feature a very simple operation. No cooking is involved so franchisees dont have to invest large sums in expensive grills and fryers. Also, the dcor package is streamlined so that money isnt wasted on non-recoverable assets.3.1.3Production/Operation/Technical Skills and Resources

Subway offers customers a wide selection of sandwiches also called subs. Sandwiches are always freshly baked, and customers can choose if they want t