MILFORD, Conn. -- Quick-service sandwich giant Subway, with more than 44,000 worldwide locations and more than 5,000 units in convenience stores, has announced plans to bring back its $5 Footlong deal in January in an effort to spur customer traffic. However, hundreds of operators representing thousands of Subway locations are expressing their disapproval with the promotion.
Franchisees have petitioned Subway to hold off on a $4.99 Footlong plan, fearing the effect the discounts could have on struggling franchisees in many markets, several sources told CSP's colleagues at Restaurant Business magazine.
The company’s primary shareholders, working to assuage operators’ concerns, are offering to invest $25 million in the brand in January, according to a memo obtained by Restaurant Business. That memo makes the case for offering select footlong sandwiches at $4.99 in part by explaining that traffic has fallen 24.5% over the past five years.
“Our franchisees are actively involved in many aspects of our decision-making process, and we welcome and encourage their feedback,” Subway said in an emailed statement. “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,” the statement said.
The petition underscores the challenges that large, franchise-heavy quick-service brands have in pushing value in the current environment. Many systems feel they have little choice, given intense competition and offers from major competitors.
News of the petition comes just days after McDonald’s revealed its own upcoming value offering: a $1, $2, $3 Dollar Menu with several items and a planned Jan. 4 start date. Several other quick-service chains have their own value offerings or are planning them.
Subway grew for years in part because of its value, driven by its popular $5 Footlong promotion, which helped it establish its credentials as the value player in the growing sandwich business, while also helping Subway grow into the largest single U.S. restaurant chain by unit count.