SUBWAY BECOMING DESTINATION IN SUPERMARKETS

ROSEANNE HARPER

WAYMART, Pa. - A Subway sandwich restaurant, recently installed in a Rays Suresave supermarket here, is drawing new customers into the store.

"Our customer count is up beyond what it ordinarily would be this time of year," store manager Brian Rogan said. "In fact, from the day he [Subway franchisee Joseph Kozlowski] set up, we've experienced increases that are unnatural, way above normal."

The owners of Rays, a two-unit independent retailer, chose to lease space to Kozlowski, a local resident who is a Subway franchisee. Of the growing number of retailers adding Subway restaurants in their stores, about half follow that route, while the others become franchisees themselves.

"By being the franchisee ourselves, we benefit from profits as the business grows, rather than just collecting rent," said Joey Hays, owner of Food Rite, a four-unit independent based in Dyer, Tenn., who installed a Subway in his third store earlier this year.

"The others have been very successful," Hays said. "It takes a few months for them to become profitable, but this third one is already breaking even."

Over the last year, Milford, Conn.-based Subway Restaurants has set up shop in 1,244 Wal-Mart supercenters and 79 supermarkets across the country. Since the start of summer, the company has installed operations in 64 Wal-Mart supercenters. The Subway in Rays Suresave opened for business in June.

Rays Suresave and Food Rite operate in small towns, with populations under 5,000. With no other freestanding quick-serve restaurants for miles around, the Subways in their stores quickly become destinations, Rogan and Hays agreed.