Subway: Success & Struggles

Introduction

• Subway's Ubiquity: Most people are minutes away from a Subway.
• Popularity: More locations in the US than other fast-food chains since 2002.
• Decline: Decrease in locations since 2016.

Subway's Rise

Simplicity of Business Model:

• Lack of Complicated Equipment: No broilers, fryers, or grease traps.
• Lower Costs: Less equipment means smaller, cheaper spaces.

Founding Story:

• 1965: First store opened by 17-year-old Fred Duca to fund college tuition.
• Initial Investment: $1000 from family friend Peter Buck.
• Original Name: Pete's Super Submarines, later changed to avoid confusion.
• Expansion: Franchising began after 9 years to accelerate growth.
• Flexible Locations: Subway's simplicity allowed it to operate in unconventional spaces.

Successful Branding & Strategies:

• Freshness: Emphasized freshly cut vegetables and in-store baked bread.
• Value: Competitive pricing, notably the $5 foot long promotion in 2008.
• Health: Promoted by athlete endorsements and notable weight loss stories (e.g., Jared Fogle).

Subway's Decline

Overexpansion:

• Saturation: 27,000 US locations led to Subway restaurants competing with each other.
• Original Strategy: Opening new locations to create an image of success.
• Sales per Location: Lower than competitors (e.g., Chick-fil-A).

Leadership Changes:

• Fred Duca's Passing: Diagnosed with leukemia in 2013, passed away in 2015.
• Transition: Control passed to his sister, resulting in management distractions.

Failed Campaigns:

• Jared Fogle Scandal: 2015 crimes involving minors tarnished Subway's image.
• $5 Foot Long: Became impractical, leading to tensions with franchisees.

Scandals & Controversies:

• Product Integrity: Questions about food quality (e.g., Footlong, chicken content, tuna).
• Impact: Hurt Subway's reputation and customer trust.

Brand Staleness:

• Unchanged Menu: Leading to a perception of the brand being outdated.
• Eat Fresh Refresh: 2021 initiative to update menu and ingredients, endorsed by athletes.
• New Ownership: 2023 sale to private equity firm Roark Capital.

Conclusion

• Future Outlook: Recent changes show potential for a positive turnaround.
• Personal Opinions: Discussion on personal experiences and preferences with Subway.

Questions for Reflection

• Customer Experience: What are your thoughts and experiences with Subway?
• Comparisons: How does Subway compare to other sandwich chains?
• Feedback on Decline Reasons: Do you agree with the listed reasons for Subway's decline? Any additions or changes?
• Subway Orders: What's your go-to order at Subway?