(Yicai) Aug. 11 -- Subway has opened its 1,000th store in China, with the US restaurant chain specializing in made-to-order sandwiches moving towards its previous goal of opening 4,000 shops in the country, while setting a new target of 10,000 outlets, according to a new report.

Subway China opened its 1,000th store on Aug. 8, but that is not the end goal, The Paper reported on Aug. 9, citing Chief Executive Zhu Fuqiang. The target is to have 4,000 shops in the Chinese market within the next 20 years, but internally, the company is aiming for even higher numbers, he added.

"Opening 300 to 500 new stores a year is the baseline, but we are striving toward the goal of 10,000 restaurants," Zhu noted. "The Chinese market has unlimited potential and endless opportunities," ranking as Subway's fastest-growing market worldwide over the past two years, far exceeding the brand's expectations, he pointed out.

Established in 1965, Subway is the world's fourth-largest fast food chain by store count. It entered the Chinese market in 1995 and once missed a golden growth opportunity due to franchise model limitations, but has since adopted a direct ownership model to speed up its expansion.

Small franchisees lacked investment in the market and the brand, leading to limited location selection and space planning, Zhu said. Many shops were only 40 to 50 square meters, with some having no seating, significantly impacting the customer experience, he noted.

Subway had only around 500 stores in the Chinese market during its first 28 years, while other Western fast-food chains had already completed their nationwide expansion, Zhu pointed out, adding that the company was very dissatisfied with this.

In June 2023, Subway inked a master franchise agreement with Shanghai Fu-Rui-Shi Corporate Development to significantly expand its business in the Chinese mainland. In addition, the firm's rapid expansion is supported by the localization of its supply chain system.

"China's food processing capabilities are world-leading, so the supply chain is not an issue, the key is maintaining standards," Zhu said, adding that Subway China's procurement strategy, research and development, and supply chain have been almost entirely localized.

Editor: Martin Kadiev