Franchising is one of the best strategies and ways how to expand the business on the market, whether that market is local one or international. Franchising is based on having two sides, franchise provider and a franchise recipient who concludes a contract to which both sides are hoping for a successful and better and more efficient business and long-term cooperation. Although there are many types of franchises the most widely used is a franchise of product distribution. In general, the franchise is one of the least risky ways to enter the foreign market if compared to direct investment and acquisitions but is still more risky than direct and indirect imports. However, its risk is reduced because the entrepreneur buys the right to sell products from a well-established and well-known buyer, or a franchisor who has devoted buyers. Therefore, it is no surprise that the franchising is increasing in the more developed countries. The situation in the Republic of Croatia is somewhat different, but there is some progress, although some unsuccessful stories happen where franchising is unsuccessful, like Subway, which is described in this master thesis. What are the reasons for the failure, and what the franchise's requirements will be analyzed in detail in this master thesis, as well as predicting the success of its re-entry into the Croatian market.