Subway is backing away from its famous $5 footlong deal after franchisees revolt

SubwayDon’t be surprised if there is no footlong at your local store.
  • Subway franchisees will no longer be required to sell the $US5 footlong, the company’s CEO told USA Today.
  • The return of the promotion in January caused an outcry among franchisees. More than 400 of them signed a petition against it, saying that the chain’s discounting was eating into their profit margins.
  • The new rule allows each franchisee to have more flexibility.

Subway franchisees will no longer be required to sell the $US5 footlong after a franchisee revolt broke out earlier in the year.

When the sandwich chain announced in December that it would be bringing back a new take on the deal, charging $US4.99 rather than $US5 for a footlong sandwich, it was met with mixed reactions. At the time,400 angry franchisees signed a petition in protest, saying that the company’s strategy for discounting was eating into already-slim profit margins.

“The national promotional focus over the past five years … has decimated [us] and left many franchisees unprofitable and even insolvent,” petitioners, led by Virginia franchisee Mitesh Raval, wrote in a letter to Subway in December, The New York Post reported.

The footlong became a huge hit for the company as customers sought value during the recession. However, in the years that followed, some franchisees complained that it was hurting their business.

Now, management is backing down. The company’s new CEO, Trevor Haynes, told USA Today on Monday that franchisees will no longer be required to offer the deal. Franchisees can still offer the deal at their stores if they want.

“How do we help our franchisees with more of a regional value message, so they’re able to (have) a value proposition that fits with their economic model,” he said. “If you look at California, there’s a very different cost of business than in Arkansas.”

Subway did not immediately respond to Business Insider’s request for comment on the change.

The chain has struggled in recent years. Its US store count dropped by more than 900 in 2017, which was almost three times as many locations as closed the year before.

Sales declined at Subway stores across the US last year, people with knowledge of the situation told Business Insider’s Kate Taylor. Its former CEO, Suzanne Greco, announced she would be retiring after 45 years at the company in May.

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