Subway sandwich chain seeking more SL partners
An international fast food chain, Subway which opened its first restaurant at Duplication Road is currently on the search for franchises in Sri Lanka.
Ready to take the country by storm as the chain proclaimed, Subway officials along with Ataraxia Capital Partners announced its entry into the Sri Lankan market with a media conference at the new outlet on Monday.
Subway sandwiches offered to attendees at the briefing
Subway Sri Lanka Chairman Nathan Wills said that Subway expects to operate around 50 restaurants by 2019 in Sri Lanka with each store comprising 20-25 employees. He said Subway was willing to adapt to the local demand by operating small kiosks in shopping centres and drive through locations as well.
Subway had run into problems when it applied for Board of Investment (BOI) status under Section 17 of the BOI Act and discussions that lasted six months proved to be fruitless, Mr. Wills said in an interview with the Business Times. The BOI, in a separate communication to the Business Times, stated that they do not grant the status of Section 17 approvals to restaurants or franchises.
Section 17 approvals benefit from tax holidays, the right to import duty free project related items that are approved beforehand by BOI, and if the goods are exported, the right to import project related raw materials.
All restaurants and franchises under BOI operate as Section 16 projects meaning that they operate under the normal laws of the country.
In view of these developments Subway would be re-applying for BOI status for the fast food chain under Section 16. Mr. Wills said that Subway would have found Section 17 to be more beneficial to the company and its interests since Subway needs to import furniture and equipment from overseas. He went on to state that while negotiations are currently ongoing, the authorities felt it would be disadvantageous to offer the approval to Subway while similar restaurants were left out.
Mr. Wills stated that Subway would offer its customers extra with no additional charge.
He noted that seven customised ‘submarine’ sandwiches were on offer where taste, health and affordability were the key factors in mind.
Present at the media briefing were Asanth Sebastian, Partner and Head of Structured Products Ataraxia Capital Partners and Sharad Sri, Partner and Head of Investments Ataraxia Capital Partners.