Subway Making $5 Footlong Promotion Optional For Franchisees
The latest move from Subway is sure to please its franchisees while disappointing its customers. Subway franchisees will no longer be required to sell the $5 footlong, according to a new policy from the company. The company’s new CEO, Trevor Haynes, said that franchisees can still offer the deal at their stores if they want.
The $5 footlong promotion became a huge hit for the company around 2008-2009, during the heart of the financial collapse and the great recession. However, as the economy improved and the promotion hung around, Subway franchisees began to complain that the discounting was eating into their profit margins. When the promotion returned in January, it caused a revolt. About 400 angry franchisees signed a petition in protest after the announcement was made.
Subway is now encouraging different markets to try their own value options. Haynes said, “How do we help our franchises with more of a regional value message, so they’re able to (have) a value proposition that fits with their economic model. If you look at California, there’s a very different cost of business than in Arkansas.” The company’s restaurants are 100 percent franchised
Subway had about 44,000 restaurants worldwide in 2017, earning $16.8 billion in global sales. The company records more than 7 million transactions globally every day. The company has struggled in recent years, closing about 1,300 locations in the US over the past two years. The brand is also still recovering from the sex and child-pornography scandal of former company spokesman Jared Fogle.