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BOSTON -- The Subway restaurant chain is flooding the area, as well as much of Massachusetts, with new shops. According to a story in the Boston Globe, the small restaurants are popping up in enclosed malls, strip shopping centers and downtown areas.
Two Subways opened in the past year in Haverhill, including one downtown. "It's in an inner-city location, but it's doing very well for us," said Michael Volcano, Subway's development agent for Middlesex and Essex Counties, in an interview with the Globe.
Subway restaurants are also under construction in Chelsea, Gloucester, Lynn, Newburyport, Peabody, and Salem. In the past year, Subways have opened in
Amesbury, Beverly, Malden, and Peabody.
"We have a tremendous amount going on now in Massachusetts," said Tom Farrell, Subway's development agent for Suffolk and Norfolk counties. There are about 200 Subways in Massachusetts, and 75 more under construction, Farrell told the newspaper.
Nationwide, Subway has more than 16,000 stores, including many in convenience stores. Last year, the company overtook McDonald's to become America's largest franchise restaurant chain.
While the effects of Subway shops on the suburban landscape are not as dramatic as those the burger chains have had, the little stores are making an impact -- by filling hard-to-rent, smaller spaces. John Mullen, director of the Center for Economic Development at University of Massachusetts at Amherst, told the Globe that because a Subway operates for more than eight hours a day, it has the potential to bring nightlife to a business district.
A Subway can draw other restaurants to a business district and also make an area more attractive for residential development, according to Andrea Hurwitz, spokeswoman for the Metropolitan Area Planning Commission. A downside is that a Subway can drive a local sandwich shop out of business, according to Mullen.
Alan Macintosh, assistant director of the Haverhill-based Merrimack Valley Planning Commission, told the Globe that a Subway could provide a small boost to a struggling area. "In the right setting it might be a piece that is important, although I don't think you would want to build an economic development strategy around it," Macintosh said.
While the ideal space for a Subway is 1,200 square feet, the stores can be as small as 200 square feet, according to Farrell. Subways do not require drive-throughs, although some stores have them; nor do they have grills, fry cookers, or pizza ovens, and thus do not require a large number of safety permits. The only cooking done on the premises is for bread and cookies.
For landlords, Subway is an attractive tenant because corporate headquarters will help struggling franchisees or replace them if they fail, according to Jim Thompson, managing director of operations for Regency Centers, a Jacksonville, Fla.-based firm that owns 265 shopping centers across the United States. "If they open a store, they want to see it succeed," he told the Globe.
Subway faces competition in Massachusetts from both D'Angelo's, which is owned by the parent company of the Papa Gino's pizza chain, and Togo's, which is owned by Dunkin' Donuts parent. Also vying for the sandwich market are the fast-casual restaurants, such as Panera, as well as the burger chains and independent pizza and sandwich shops.
In placing stores on what seems like every street corner, the privately held Subway chain, based in Milford, Conn., is following a strategy used in certain parts of the country by Starbucks and Dunkin' Donuts.
Subway's goal is to have a store in place for every 15,000 residents, according to Farrell. Franchisees or entrepreneurs own all of the company's stores.