United States-based sandwich chain Subway plans to open new stores aggressively and expand its franchise business in the fast-growing Chinese mainland market despite facing intense competition from McDonald's and Kentucky Fried Chicken.

With more than 30,000 outlets in 87 countries and regions, Subway, the world's largest submarine sandwich franchise, now considers China's mainland as one of its emerging markets, thanks to its robust economic growth and people's growing acceptance of western-style food.

Subway operates 100 stores on China's mainland, with nearly half of them located in Beijing where the first store opened about 10 years ago.

Within seven years, it plans to boost store number 10 times to 1,000 outlets nationwide, said Kurt Lipson, operations manager of Sub Restaurants Management (Shanghai), the agent in eastern China.

The business in the eastern China region jumped 65 percent last year from a year earlier, Lipson added.

"Maybe 10 years ago, we were early (in coming to China's mainland), but now we can feel the time is right for Subway to expand as Chinese pay more attention to health," said Michael Johnsen, director of business development.

Johnsen said he aims to grow store numbers in Shanghai and cities in neighboring Jiangsu Province from 25 now to 100 by 2010.

Subway's concept of eating fresh, low-fat and healthy sandwiches differentiates it from KFC and McDonald's.

Johnsen said Subway will focus on franchising to expand in the market. The company charges a franchise fee between 800,000 yuan (US$116,839) and 1 million yuan.

(Shanghai Daily September 12, 2008)