InvestHK, with their wide reach of local business contacts, recently put us in touch with the management team for Subway® here in Hong Kong. We spoke with dynamic mother-and-son duo Christel and Jamie LeBrun, who head up the Business Development Office for the Subway® brand in Hong Kong and Macau. We discussed their experience so far with the brand, what drew them to the region and how Subway® is maturing and growing.
Jamie LeBrun, General Manager for Subway Hong Kong & Macau (photo taken in 2019, pre-COVID-19)
What is the role of a Subway® Business Development Agent?
At the end of 2017, we were officially awarded the Business Development Agent role for Hong Kong and Macau. This means we have the exclusive rights to the Subway® brand’s development in these two territories. Our role is to identify suitable franchise partners and help them into their own Subway® restaurant. We help to select locations and negotiate the leases, design the restaurant with the team in the USA, cover all aspects of the supply chain with our sourcing partner, IPCA. We manage the marketing with our local agency and also oversee operational standards for the Subway® restaurants in these territories .
We do this on behalf of the Subway® brand, either with restaurants we directly own and operate or with our franchise partners, in which we support across various functions of the business. Currently, our office directly owns and operates seven restaurants out of the 30. The two most recent that we opened are located in Lai Chi Kok and Fortress Hill. The remaining 23 restaurants are owned by various franchise partners. Our Business Development team, which started with Subway® in New Zealand, has over 60 years of Subway® experience between us. We are an experienced office that possess a great deal of passion and belief in the Subway® system and brand.
Can you tell us a little bit about why you wanted to open a Subway® franchise in Hong Kong?
In regards to Hong Kong specifically, there is a great opportunity for the brand to expand here. There is a large gap in the market for fresh-made, customised, healthy and affordable Western-style food that is prepared quickly. This gap is what we are filling – and quickly. We saw opportunities in the decor, the menu, the operations and the marketing, and we have made huge steps in the right direction in each of these areas of the business since taking over in 2017.
We were opening Subway® restaurants in New Zealand prior to moving to Hong Kong. We turned our attention to the Business Development Agent role when the opportunity arose. We visited Hong Kong and fell in love instantly. We admire the work ethic of the people and are drawn to the endless energy of the city. The Hong Kong people are welcoming, and we have always felt at home here. It was only natural we brought our expertise in the Subway® brand to this place we now call home. It was a great fit for us – a no-brainer.
What lessons have you learned since launching in Hong Kong in 2017?
Take your time when it comes to leasing. Hong Kong is a wonderful market for those who are willing to wait until the right opportunity comes along. There are many overpriced leases marketed to us throughout the year, at least from our experience; if you are a new brand or new development office, you might be susceptible and take the carrot. The key to leasing in Hong Kong is understanding the different trade areas, the different day parts of your business, what the going rate is in each area, having your ear to the ground and, most importantly, being patient until the right opportunity presents itself. With the price of leasing here in Hong Kong being so high, you can’t afford to get it wrong.
Drive traffic via innovation, not slashing prices and cheapening the brand. Offering value is okay, but do not live and breathe discounts or diminish the customer experience with smaller portions or a poorer-quality product. Hong Kong people are savvy customers; they understand and appreciate good-quality food and are willing to pay for it. That goes for our coffee as well. A recent partnership with Nescafé means you will see bean-to-cup coffee machines in all restaurants by the end of 2020. Our customers also love innovation, which is why you will see a new limited-time sub offered every eight weeks, as well as new hot sides such as chicken wings and potato puffs entering select restaurants in the market.
How to work cross-culturally. This has been a positive experience, as long as we are willing to listen and really take the time to understand the cultural nuances. We have a diverse team, with people who will guide us and lead us, and we’ve learned the different ways to work together more productively in this culture. We have people from around the world and local staff as well. The most important thing is that we listen; we have our ears to the ground and we’re respectful of the culture. We embrace the differences, and we uphold our values of integrity, respect and family. We think that’s important for integrating into any culture and for taking a global brand and making it work in a place like Hong Kong or Macau.
Christel and Jamie LeBrun (photo taken in 2019, pre-COVID-19)
You’re a mother-and-son team. How does this family connection influence the work that you do together?
It allows for less bureaucracy and more trust. We tend to make decisions more quickly, without any of the typical corporate games. We trust in each other and our unique skill sets 100%. As long as we maintain a professional manner towards one another (which can be easy to relax at times), then we tend to move quickly and build strong teams around us. We have grown and learned a lot about one another over the years, and we have built a strong bond that sees our business benefit as a result.
It is important to note: our Business Development Office and franchisees are family to us. We work as one family with one vision, and we will always bring this family feel to our business and the people who are invested.
What does the Subway® brand symbolise for you?
Opportunity and freedom: the freedom of what owning your own business gives you, both financial and in terms of time. There is freedom in being your own boss, and Subway® gives you that opportunity.
Pride and fulfilment: there is a great sense of pride and fulfilment in operating your own business. With the support of our office and partners managing the supply chain and marketing, you can really focus on your team and the culture you wish to build in your Subway® restaurants.
Fresh food and excellent ingredients: At Subway®, we bake our own bread and prepare our vegetables fresh on site every day; we do not use central kitchens or off-site preparation. Our ingredients are sourced from all over the world by our central souring entity, IPCA. As they procure on behalf of 5,000+ restaurants in the region, we capitalise on this scale by obtaining access to great ingredients at competitive prices. This allows us to be priced competitively and offer such good value to our customers.
(photo taken in 2019, pre-COVID-19)
You’ve recently undertaken a brand transformation. Can you tell us about that and how it’s being received by customers?
Yes, the brand transformation has been very exciting indeed. The transformation actually began when we took over the office at the end of 2017 and started with operations, moved to decor, then menu and marketing. Let us share some more information about each stage below.
Operations: initially our focus was on in-store operations, as we like to think success in the QSR industry starts with clean restaurants, well-presented product and great service. We conduct a 250-point compliance check each month in each restaurant and work with the franchisees to ensure high standards are maintained at all times. Restaurant operations are the basis for success in this industry, and that is why we focused on this area of the business first.
Decor: in 2018, we launched our first Fresh Forward restaurant at City University. Today, we have 20 Fresh Forward restaurants between Hong Kong and Macau. This decor is brighter, cleaner and more digital then the previous deor and really brings Subway® into the 21st century. We have had glowing reviews about the new decor, which has offered our guests and landlords alike a superior brand experience. We are one of the leading markets in terms of Fresh Forward restaurant penetration per restaurant count, at just under 70%. We were awarded Development Champions for North Asia by Subway® Headquarters in 2019 for our efforts in terms of rolling out this new and exciting decor.
Menu: at the same time that we introduced our new decor, we undertook two key projects. The first was a menu rationalisation, followed closely by the Restore the Core initiative. Menu rationalisation focused on menu layout and SKU analysis, refining our choices for customers and effectively communicating preferences of our consumers on our now digital menu boards. The Restore the Core initiative focused on improving our existing menu items. In 2020, we will improve the quality of proteins, such as ham, turkey, roast beef, chicken strip and roast chicken, teriyaki sauce and bread toppings, to name a few.
Amongst this, we have introduced new menu items such as avocado, mozzarella cheese, chicken wings, potato puffs, fresh bean-to-cup coffee, a fully vegan product – the Vegan Supreme – cardboard boxes for salads and will launch paper bags in quarter four of 2020 to help with sustainability. Finally, menu innovation extended to our limited-time offer menu. Doing as other major QSs do in Hong Kong, we launch a new sub every eight weeks. We have featured subs such as shrimp, avocado and wasabi mayonnaise, black pepper beef, rotisserie chicken and next month will launch a Japanese mentaiko snow crab. These innovations are all about excitement for our loyal customers and bringing in new customers via innovation at the restaurant level.
Marketing: finally, we are working with our local agency, New Digital Noise, to promote the brand on our social and digital channels, working with KOLs around Hong Kong as well as micro-influencers to communicate our new products and innovations in a fun and engaging way. We have also sponsored major events that align with our brand that are active, healthy and fun, such as the HSBC Sevens and Dragon Boat Carnival.
In the coming months, we will work more closely with St James’ Settlement to give back to the people of Hong Kong and to those whom need it most. We are launching a partnership with FOOD-CO to provide coupons to vulnerable families in Hong Kong; we believe Hong Kong is a very close-knit culture, and we want to partake and give back to the communities who support us as much as we can.
When things settle down, do you have any expansion plans?
Absolutely, in fact, we are still growing now. By quarter three of this year, we would have built seven new restaurants and remodelled an additional five of the existing locations. In the next three years, we aim to open at least 50 additional Subway® restaurants. By 2026, we aim for a total of 110 Subway® restaurants. We have a number of franchisees looking to expand now and new franchisees onboarding this year.
We welcome new franchisees to reach out to our Development Office if they are interested. They can visit this website for more information and complete a simple form to arrange a meeting.
(photo taken in 2019, pre-COVID-19)
Do you have any local ingredients that you don’t have at other Subways® around the world?
A lot of our products are shared with other Subways® in the APAC region, so we achieve better economies of scale, allowing us to get better-quality product at more competitive pricing. This is a major advantage of franchising with a brand like Subway®. You get access to large-scale supply chains with gold-standard suppliers – that means not only better-quality food at lower prices but stability and traceability as well. For example, our bread and steak come from New Zealand, a large portion of proteins from Europe and our much-loved cookies from the USA.
In saying that, we also try our best to localise the menu. It is a balance of bringing the international flavour and high-quality ingredients to Hong Kong, but providing certain products that are enjoyed and cherished at a local level. Examples of this localisation would be the black pepper beef launched for the Chinese New Year period in 2019 or the chicken wings and potato puffs entering the market now. We understand Hong Kong people want hot food and food that is shareable, born out of a dim sum culture, so we listened and adapted the menu accordingly. We will continue to bring local flavours to Hong Kong. We rely on regular market research to identify what it is the Hong Kong people want and develop our innovation pipeline using such market insights.
What’s one thing you would love people to know about Subway®?
Subway® is a family brand. Our restaurants are owned and operated by individuals from all walks of life, from all corners of the globe, from many different backgrounds and from many different cultures. But we are all linked together by a passion for the brand and with a single goal to help each other to succeed. Whether someone is a franchisee owner, a company employee or a Business Development Agent, we operate like one big family. Just like we do with our own families, when someone from the Subway® family needs help, we band together as one and support one another through the good times and the bad.
Make no mistake, we are fortunate to have access to large-scale supply chains, thorough market research and over 60 years of training tools at our disposal, but our franchisees are everyday people who love Hong Kong and Macau. People will look at Subway® as la arge multinational, which is true in a lot of ways, but the brand’s heartbeat comes from everyday people who had a dream to own their own business and be their own boss. We think this is an important aspect to note about Subway® – that when you visit a Subway®, you are not just supporting the Subway® brand but also the everyday local people of Hong Kong and Macau.
Finally, we want people to know that they too can own their own business. Our franchisees are from a wide range of backgrounds. We do not discriminate, and we welcome people from all walks of life. If you are passionate about F&B, want to own your future, have a team-player mentality and you are looking for an opportunity, we would love to hear from you. Anyone can do it, so what are you waiting for? Get in touch with our office and join our Subway® family in Hong Kong and Macau today!
(photo taken in 2019, pre-COVID-19)
Which is your personal favourite sandwich at Subway®?
Christel: The new Vegan Supreme! A new fully vegan product from New Zealand.
Jamie: Rotisserie chicken! Our current limited-time offer is packed with flavour and is part of our Fresh Fit menu.
We are both guilty of having extra ranch sauce… on any sub, salad or wrap!
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