Finding a Subway in Baltimore is getting easier.
By year's end, the sandwich-maker will have 56 restaurants in Baltimore, twice as many as it had three years ago. In the rest of Maryland, Subway has added 80 stores in the past three years, increasing the chain's count to 190 beyond the city.
Baltimore and the mid-Atlantic region helped lead Subway's charge last year past McDonald's to become the largest restaurant chain in the country. The city and the region ranked No. 1 in terms of store openings for the chain.
With 13,706 restaurants in the United States as of yesterday, the chain increasingly foresees growth in urban markets. "We've had strong but steady growth over the last several years, and over the last two to three years our growth has really accelerated," said Jim Smith, development agent for Subway in Baltimore. "The existing franchisees want to open more stores."
In recent years, the Milford, Conn.-based chain has updated its menu with new breads and sandwiches to attract health-conscious consumers.
Then there's the Jared factor.
Subway distinguished itself from other fast-food companies three years ago after learning about Jared S. Fogle's weight-loss plan and featuring him in a series of commercials. While he was in college, the story goes, Fogle lost 245 pounds in a year eating a 6-inch turkey sub for lunch and a foot-long vegetarian sub for dinner every day.
The commercials helped Subway tap a trend among Americans who wanted fast food that was more healthful than the usual fried fare. Subway's worldwide sales rose from $3.6 billion in 1999 to $5.17 billion last year, a 43 percent increase.
The Jared marketing campaign boosted Subway from a large company "into an extremely prosperous franchise company," said franchise consultant Michael H. Seid of West Hartford, Conn.
"It was a really good marketing campaign," he said. "It was huge."
In the Baltimore region, the chain's success is being driven mostly by existing franchisees who are happy with the business and want to open more stores. But the chain also attracts new franchisees in a difficult economy.
"This year in particular, with the dot-com bust and a lot of people losing their jobs or being bought out of their jobs with severance, a lot of people are looking to own their own businesses," said Alan Warmund, president of Subway Development Corp., which develops the chain's franchises in Virginia, Delaware, Washington and Maryland.
Warmund said great demand exists to open Subway restaurants. He is focusing on developing new locations in the counties around Baltimore.
"I have over 2,000 inquiries and over 400 applications," he said. "That's enormous because I can't possibly place all of these people all at once."
In the past, Subway grew mainly beyond cities, where rents were lower and markets less diverse. Now, said Don Fertman, Subway's corporate director of franchise sales, "everybody knows us, and that enables us to go into much higher profile locations. Thus, the drive now toward urban development, where oftentimes the rents are higher."
Unlike many fast-food chains, Subway doesn't own any stores, relying solely on entrepreneurs such as Wendell S. Jones for the chain's franchise expansion.
Jones, 37, left a retail management position four years ago to open his first Subway, in Cherry Hill. He worked part time at a Home Depot to save money to open a franchise. Now, Jones has his third Subway -- a shop that opened in April in the city's Mount Vernon neighborhood -- and has plans for a fourth.
"I'm going to open more stores," Jones said, who has a partner in the business. "That's my goal, to become financially independent."
Employee turnover -- a common problem in the fast-food business -- presents one of his greatest challenges in running the business, Jones said. He said he works about 50 hours a week.
Smith, the local Subway development agent, helped Diana C. Sims find a spot for a new restaurant in the redeveloped Montgomery Park office building in West Baltimore. She opened her first Subway inside a Citgo service station at Reisterstown Road and Northern Parkway more than a year ago for about $75,000.
"I think my experience overall has been excellent," said Sims, 51, who said her goal is to open five restaurants.
The average Subway store in Baltimore has annual sales of $425,000, which is 21 percent more than the national average of $355,000, Subway officials said.
Start-up costs are relatively low, making Subway appealing to small-business owners. In Baltimore, Smith said, it costs $65,000 to $125,000 to open a franchise, plus about $50,000 to lease equipment.
Franchisees pay a one-time $10,000 franchise fee, plus a weekly royalty of 11.5 percent of sales to the corporate parent.
A McDonald's restaurant requires an initial investment of $175,000, including a $45,000 one-time franchise fee. Total costs range from $455,000 to $768,500, according to McDonald's Corp. A Subway franchise "is an investment that is more reachable by more average people," said Seid, the franchise consultant from West Hartford. "The person who is a blue-collar worker likely has enough capital in house to open up a Subway. To open up an Arby's, Wendy's, McDonald's or Burger King takes significantly more time and capital."
A big reason for the franchises' popularity is that the return on investment is so good, Seid said.
"Subway's same-store sales blew through all the industry numbers," he said. "Their same-store sales were double what the industry did in some markets."
Industry experts say satisfied franchisees are a good sign for a big national chain.
"It speaks well of the brand," said Don DeBolt, president of the International Franchise Association in Washington. "In a sense, a franchisee can be looked upon as a customer in a chain of customers. ... There are not too many franchise systems that have consistently racked up double-digit sales gains for the past few years. I don't think there's a company out there that has 10 percent-plus sales increases, except for Subway."