Sandwich Chain Subway to Reappear in Indonesia through Franchising Agreement with Sari Sandwich Indonesia
Soon, Indonesians will be able to enjoy the famous Subway sandwiches, again. In the fourth quarter of 2021 a couple of Subway stores are targeted to be opened in the Greater Jakarta region via a country franchise model (reportedly Subway’s very first country franchise model) with Sari Sandwich Indonesia. This model means no other parties are allowed to open Subway outlets in Indonesia.
Subway is an American fast food restaurant franchise that primarily sells submarine sandwiches, salads and beverages to consumers. One decade ago, Subway overtook McDonald’s as the world’s largest restaurant chain. Today, around 40,000 Subway stores can be found across the world. In the words of Subway Chief Executive John Chidsey, Subway’s return to Indonesia “forms part of the brand's aggressive plans to expand its international footprint in the Asia-Pacific region” and “this is just the start of our global expansion plans”. In Asia, Subway outlets already exist in South Korea, Japan, and Singapore.
Interestingly enough, Subway has existed before in Indonesia in the 1990s and early 2000s when it had stores in Jakarta (including in Pondok Indah Mall, Taman Anggrek Mall, and Plaza Senayan) and in Kuta (on Bali). However, in the early 2000s – in the direct aftermath of the devastating Asian Financial Crisis – all outlets were closed in Indonesia. But why did it exit Indonesia? And is Indonesia's socio-economic context now markedly different so that it would allow more success for the fast food chain? These questions are discussed below.
Sari Sandwich Indonesia (SSI) will be the operator of Subway stores in Indonesia. SSI is owned by publicly listed MAP Boga Adiperkasa which already holds exclusive licenses to operate seven premium brands (aside many other brands) in Indonesia: Starbucks, Pizza Marzano, Cold Stone Creamery, Krispy Kreme, Godiva Chocolatier, Genki Sushi, and Paul. MAP Boga Adiperkasa operates over 590 stores in 33 cities across Indonesia.
Meanwhile, MAP Boga Adiperkasa is owned (for slightly over 79 percent) by another listed company on the Indonesia Stock Exchange (IDX): Mitra Adiperkasa, a retail company with a diversified portfolio that includes department stores, fashion, sport equipment, food and beverages, supermarkets and lifestyle products (with brands such as Sogo, Zara, Marks & Spencer, Reebok, Burger King, and Domino’s Pizza). It operates more than 2,300 retail outlets in 79 cities across Indonesia.
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