Anna Peer
Subway is struggling to remain relevant despite having the third most restaurant units globally.
For Subway franchise owners, there’s no strength in numbers—especially when their stores are in the same vicinity.
That’s because Subway offers no territory guarantee for franchisees—meaning, a different Subway franchise owner could open a store the next block over. The 20,000 US Subway stores are competing for business with other Subway locations. And with one of the lowest annual sales in the franchise game (estimated around $500,000 per unit in 2023), it’s not an attractive business model to the more savvy, high-growth, multi-unit owners.
Subway is desperately trying to grab customers by offering promotions that cost franchisees money for every sandwich sold, while simultaneously forcing owners to invest hundreds of thousands of dollars to upgrade every location to the new brand standards.
This is happening while brand loyalty from Subway customers has dwindled away due to inconsistency, high cost, lack of cultural relevance, and a crowded pool of other quick service restaurant (QSR) options.
Subway has tried to appeal to a new generation of customers by promoting the “healthy, caring” attitude prominent on its website's sustainability pages. But there is a glaring sustainability promise that Subway has failed to follow through on: There has been no meaningful progress update since 2020 on Subway’s commitment to source 100% cage-free eggs in North America by 2025. And transparency around animal welfare/sustainability is what customers actually want to see, and could ultimately help struggling franchisees.
The sale of the company to private equity giant Roark Capital coincided with the hiring of the first CEO outside of the founding family—which meant major overhauls throughout the corporation. Subway’s focus on the bottom line, rather than on customers and franchise owners, has led to distrust, broken promises, and a muddled brand.
Can Subway claw its way back into relevancy? Maybe it should try actually following through on previous initiatives, before tackling new ones—like its latest launch of budget-friendly eats with $5 footlong nachos, which are Doritos poured into a trough with cheese sauce. Yikes.
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