Was poor management, bad marketing or a culture clash to blame?
IN 1994, Tetsuzo Ono was asked to take early retirement by the Kawasaki Steel Corporation. He was 48. Scouting for a second career, he learnt of the rise of Subway Japan, the recently established arm of the huge American sandwich operation. It was looking for franchisees. With its low-fat, bread-roll sandwiches and impressive track record, Subway held promise in a market saturated by hamburgers. Best of all, Subway Japan was owned by Suntory Ltd, Japan’s leading whisky maker, one of its four major breweries and also the owner of the hamburger chain First Kitchen. With the protection that this implied, even the 8 per cent royalty that the company took from its franchisees did not seem so bad. And anyway, Ono says, Subway assured him that as the chain expanded, the company would cut the prices of its ingredients. Subway also promised to run TV adverts, and said that if he experienced difficulty, it would provide management guidance. With the backing of a giant like Suntory, how could he
