Love Subway’s $5 Footlong? Well, many around the world do! Sadly, the math simply does not support a $5 Footlong sandwich and, now, the franchisees of Subway are pushing back against the deal…
Franchisees vs. Subway
Even if you’ve never step foot inside a Subway, you almost certainly know the company’s signature deal: the $5 Footlong sandwich. After all, those of us who watched television in the 2000s can still not get the deal theme song out of our heads. Years ago, Subway removed the deal from most of its restaurants, saying they were losing money on the deal. However, the fast-food giant now wants to bring the deal back for the summer. Unfortunately for fans, the North American Association of Subway Franchisees (NAASF) has started pushing back significantly.
“The $5 Footlong was abandoned years ago after countless attempts to make it profitable for the restaurant,” the NAASF wrote in a statement last week. “Not since the first iteration of this campaign did the increase in sales from traffic offset the cost of the trade-down.” Continuing, the organization said it will not support any $5 Footlong offer that does not come with an attached meal of chips and a drink. “We have yet to receive a comprehensive or credible business case to support this deep discount offer,” the association explained. “All franchisee-investors will end up paying the cost of these [sandwiches].”
Most importantly, the NAASF says the deal feels like a slap in the face, given the challenges the restaurant industry currently faces. “While unemployment may be at record levels, much of our former and future staff is content to stay unemployed until their windfall and the threat of the virus subside,” the NAASF finished by saying. “These challenges will not abate until fall at the earliest.”
Now, it’s become a battle between Subway and the franchise owners…
The End of the $5 Footlong?
Understandably, Subway wants to bring back the $5 Footlong deal. In case you didn’t know, many food and finance experts say that the $5 Footlong deal helped carry the company through the Great Recession of 2008. These days, Subway faces a similar challenge: how to boost sales across the United States, while both not raising prices and keeping franchise owners happy.
Regardless of Subway’s reasoning, it seems franchise owners have no interest in taking on the famous deal. “This is a very fragile time for all restaurants,” NAASF Executive Director Illya Berecz said in an email to Restaurant Business. “Our primary goal is to help ensure all Subway restaurants have an optimal chance to survive the pandemic and operate profitably.”
Unfortunately for Subway, the company has been slammed with issues recently. From another fight with franchise owners over their new melt sandwiches to a lawsuit claiming their tuna sandwiches have no tuna in them, Subway needs some good news. The bad news has affected sales as well: since 2014, Subway sales have declined nearly 15%, and 12% of their locations have closed.
Hopefully, the once-beloved sandwich chain can return to its former glory!