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This is the first of a two-case series (004-C96A-P and 004-C96B-P). This is a classic case study of a student who is compelled to launch a career as an entrepreneur right out of college. Mike joins a one store bagel operation and helps grow it into a small chain of retail stores. They must decide whether to continue operating as a company-owned chain, or to grow through franchising when they receive a partnership offer from one of the most successful franchisors in the world, Fred DeLucca. Fred''s most notable start-up was Subway, a large sandwich franchise. At the time of the case, Subway had received a lot of negative publicity concerning franchisee dissatisfaction. The case explores the benefits and risks of using franchising as a growth mechanism and develops issues such as determining debt service capacity on a per-unit basis, franchisor team requirements, and creating a unique business format that can be successfully duplicated by franchisees yet difficult for competitors to copy. Additionally, the case explores the pros and cons of strategic alliances, and raises controversial ethical issues. This case can be taught alone or in combination with ''Bagelz'' (004-C96B-P).