1. Subway brings to China various intellectual property in the form of trademarks, patents, and an entire business system. What are the specific threats to Subway’s intellectual property in China? What can Subway do to protect its intellectual property in China?
2. What do you think about Subway’s method and level of compensating its master franchisee and regular franchisees in China? Is the method satisfactory? Is there room for improvement?
3. What are the advantages and disadvantages of franchising in China from Jim Bryant’s perspective? What can Bryant do to overcome the disadvantages? From Subway’s perspective, is franchising the best entry strategy for China?
4. Subway faces various cultural challenges in China. What are these challenges and what can Subway and its master franchisee do to overcome them?

Subway, the fast-food marketer of submarine sandwiches and salads, has more than 32,000 stores in ninety-one countries and generates some $12 billion in annual revenues. The franchising chain opened its first international restaurant in Bahrain in 1984. Since then, Subway (www.subway.com) has expanded worldwide and generates about one fifth of its annual revenues abroad. The firm expects foreign markets to contribute to much of its future growth. Subway is the third-largest U.S. fast-food chain in China, after McDonald’s and KFC. Fish and tuna salad sandwiches are the top sellers. By 2006, Subway had opened fewer than forty stores in China. The franchise had its share of initial setbacks. Subway’s master franchisee in Beijing, Jim Bryant, lost money to a scheming partner and had to teach the franchising concept to a country that had never heard of it. Until recently, there was no word in Chinese for “franchise.”