"Subway, the world's largest submarine sandwich franchise has closed five of its 21 units in Hungary this year, but said the shutdowns had not been a direct result of the crisis. Subway named excessive rental fees as the main reason for moving several units, adding that three of the five closed in 2009 will re-open next year. Subway also plans to open four new restaurants, local business daily Napi Gazdaság reported on Wednesday.Subway closed five of its Hungarian units and now has runs 16 in the country in a franchise system, said Martin Princ, the company's manager for Central and Eastern Europe.
Early this year Subway observed an 8% yr/yr erosion of revenues while the number of customers was unchanged compared to a year earlier. This means the discounted subs have become more popular. Over the past few weeks, though sales have started to pick up and Subway projects a 5% yr/yr upturn for the following 12 months.
Altogether, Subway may even benefit from the crisis, as rental rates have gone lower and customers have developed a sharper eye for cheaper meals, Princ added. He noted that they do not close restaurants in Hungary because of the crisis, rather due to operating issues. The operators of these units have not always succeeded in securing the best operating conditions, he said.
Some of the units also paid extremely high rental fees, twice of three times as much as the average in the region."
Source: Portfolio Online Financial Journal
09.09.2009