Global Franchise 10.2

As urban rents climb and consumer habits evolve, food brands are looking to expand away from the beaten track. For many QSRs, growth now lives in the spaces in between WHERE QSR GROWTH IS HEADED NEXT expand our grab-and-go offerings in North America and testing the platform in other international markets,” Kehoe explains. “From a consumer perspective, in travel hubs, Subway is a top choice for travellers seeking a convenient, great-tasting meal on the go. Additionally, our brand’s reputation for offering affordable, better-for- you options makes Subway a perfect match for non-traditional venues such as hospitals, universities, and airports.” Non-traditional expansion is no longer a side strategy for Subway, but central to the brand’s long-term growth plan. Of the 10,000 new global restaurants slated to open under its current program, as many as 2,500 could take shape in travel hubs, campuses, and institutional venues, redefining how and where QSR brands operate. Embedded demand The International Air Transport Association projects that global air passenger numbers could double to 8.2 billion by 2037, with around half of all travelers purchasing food or drink while in transit. Meanwhile, the U.K. Office of Rail and Road reported that station- based catering retailers generated more than £700million in 2019- 2020 – before accounting for post-pandemic recovery. Together, these figures underscore the vast potential of transient, high-volume environments where proximity, speed, and convenience often outweigh even brand loyalty. For QSR operators, travel hubs such as airports and stations promise the holy trinity of convenience: built-in traffic, predictable consumption patterns, and minimal marketing costs. Yet the non-traditional opportunity now extends well beyond airports. Across North America, operators are increasingly targeting military bases, university campuses, and leisure destinations, locations that combine consistent foot traffic, captive audiences, and an everyday demand for fast, reliable dining. Safe bases for growth Few environments offer the stability and predictability of a military base. For global brands testing new formats or compact menu innovations, these locations provide a uniquely controlled ecosystem, hat began as a side strategy – a kiosk in an airport or a café on a campus – has become central to the next phase of QSR expansion. From travel hubs and hospitals to universities, leisure parks, and even military bases, non-traditional venues are fast emerging as the new growth frontier for ambitious food brands, combining steady foot traffic, high visibility, and customers ready to spend. In an increasingly crowded marketplace, these spaces offer something few others can: sustainable growth with lower risk. Once considered peripheral, they’re now shaping the very core of how QSR brands grow. Yet as operators rush to secure their share of this new terrain, one question remains: is the future of food franchising truly found off the beaten track? Rethinking location The traditional restaurant model – high-rent, high-traffic, street- facing real estate – has long defined the gold standard for QSR growth. But as consumer habits evolve and the economics of urban retail shift, the meaning of a ‘prime’ location is being rewritten. Today’s franchise investors are looking beyond conventional spaces, uncovering new opportunities in places once considered secondary or underutilized. Subway, the world’s largest QSR chain by restaurant count, has been among the first to recognize this potential. Its smart growth development strategy focuses on what its global chief development officer, Mike Kehoe, describes as “building restaurants in the right location, image, and format.” This approach has resulted in a significant rise in non-traditional development, from airports and rail stations to universities and hospitals. According to Kehoe, non- traditional locations currently make up approximately 25% of Subway’s global footprint and are responsible for between 20-30% of the brand’s total sales. For a brand with more than 37,000 units worldwide, that means thousands of sites operating successfully in spaces once considered secondary. “We’re stepping up convenience as we W Top five advantages of non-traditional QSR locations Built-in footfall: Airports, campuses, and hospitals guarantee a steady stream of daily traffic, reducing reliance on street visibility. Predictable patterns: Military bases and universities offer fixed schedules, supporting precise forecasting and efficient staffing. Smaller footprints: Compact modular formats reduce real estate costs while maintaining profitability. Digital integration: Self-ordering kiosks, loyalty apps, and grab- and-go systems align perfectly with transient environments. Portfolio diversification : For investors, non- traditional spaces create a balanced growth model that complements traditional store networks, reducing exposure to urban rent fluctuations. B U S I N E S S W I S E N E W F R O N T I E R S : 28 GLOBAL FRANCHISE Issue 10.2