- Subway is reportedly planning on bringing the $US5 footlong deal back in January.
- More than 400 franchisees signed a petition to protest the deal, saying that the chain’s previous promotions have “decimated” business.
- Subway’s sales are plummeting, with The New York Post reporting that traffic has fallen 25% over the last five years.
Subway is in trouble.
Franchisees say that the $US5 footlong deal and other promotions that the company has rolled out as a response to plummeting customer traffic are pushing their businesses to the edge.
“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 complained in a letter that was sent to Subway and obtained by The New York Post.
More than 400 franchisees have reportedly signed the petition, which protests the chain’s plans to roll out its famous $US5 footlong deal in January.
The Post reported that, according to an internal memo, Subway’s traffic has fallen 25% over the last five years.
In 2016, sales at the chain fell 1.7% and its store count dropped by 359 locations in the US – marking the first time in the company’s history that the chain closed more stores than it opened. The chain’s same-store sales have dropped 13% since 2013, according to Restaurant Research.
The chain is currently rolling out a new store design in an attempt to modernise the chain. Subway is trying to catch up with competitors like Starbucks with an upcoming, digitally focused loyalty program.
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Subway said in a statement to Business Insider:
Our franchisees are actively involved in many aspects of our decision-making process, and we welcome and encourage their feedback. We have support from the majority of franchisees on this program and many others we are testing. However, we typically do have a number of restaurants that don’t participate in our national promotions. It is always optional.
Subway is in the midst of a massive transformation, and change of this size takes time.
Our goal is to strengthen the Subway brand in every market around the world to give Subway franchisees the greatest opportunity to successfully grow their businesses. To that end, we are focusing on strategic development , and we are realigning markets to ensure the right Subway restaurants are in the right locations. And, we are improving the entire guest experience. This includes remodeling our restaurants, many of which are already reporting significant lifts in sales and positive customer feedback. We are also introducing new and improved products, refining operations, and launching new digital products. We have built Subway into the largest restaurant chain in the world, and we are confident that these changes will position the brand for long-term growth.
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