Subway sandwich shops have been around for over 60 years and are synonymous with “Eating Fresh.” Even so, a large number of franchises have been failing in recent years.
How can a once-successful chain suffer so many financial losses? If you have also pondered why Subways stores seem to be failing, read below to find out!
Why Is Subway Failing In 2023?
Subway is failing for several reasons, with the primary impetus being a decline in food quality as of 2023. Additionally, the arrest and eventual sentencing of its most famous spokesperson, Jared Fogle, in 2015 adversely harmed the brand. Also, customers have complained of problems with Subway’s loyalty program, riddled with flaws and issues.
So, it appears Subway has more than a few problems regarding the dysfunction behind its numerous closings. If you would like to know a bit more about those mentioned above and other Subway closing-related issues, keep reading!
1. Two Words: Jared Fogle
It appeared Subway was on the fast track of beating some of the biggest names in fast food with its “Eat Fresh” slogan and its spokesperson, Jared Fogle.
Dubbing it the “Subway Diet,” Fogle said he lost 245 pounds by eating Subway’s sandwiches alone.
Fast forward to 2015, and Fogle would find himself in hot water after being accused of underage sex scandals, which led to his arrest and eventual conviction.
That said, the Subway brand suffered a tremendous blow to its image that it has not yet recovered from.
2. Eating Not So Fresh
The Subway slogan “Eat Fresh” implied that Subway foods were healthier and superior to other fast-food brands.
In reality, Subway foods are just as loaded with cards, salts, sugars, and various other unsavory ingredients.
Additionally, Subways products are only shipped once a week, meaning the ingredients may not be as fresh as advised.
Moreover, frequent customers often complain toppings appeared wilted and faded while employees revealed that some items were sometimes near expiration.
3. Subway Rewards Plan Is Heavily Flawed
The Subway MyWay Rewards program, launched in 2018, promised that repeat customers would earn four tokens for a spent dollar.
After 200 tokens, they would earn $2.00, which translates to $2 bucks for every $50.
Straightaway, software glitches and numerous data collection issues found in Subway’s mobile apps made for horrible customer experiences.
Since then, Subway has promised to fix the system to regain consumer trust.
4. Meats Filled With Soy And Byproducts
When consumers believe the food is healthier and made with natural, quality ingredients, they expect this to be the case.
Unfortunately, CBS Marketplace discovered that meats, like Subway’s chicken, were filled with soy and mysterious byproducts.
Astonishingly, DNA testing revealed that consumers only got 53% oven-roasted chicken and 46% in the Teriyaki strips.
Later, Subway would sue CBS, citing the tests “lacked scientific rigor,” but the damage was done.
5. Disgruntled Franchise Owners Aired Dirty Laundry
Some 400 Franchisees grew incensed when Subway’s corporate offices decided unilaterally to bring back the $5 footlong.
With that, the cause for their anger was the belief that the promotion would hurt sales, not increase them.
Consequently, after the news leaked of Subway franchise owners‘ dissatisfaction, Subway took an even more significant dip in sales.
Also, it’s pretty hard to obtain new investors when current business owners reveal corporate is ripping them off.
6. The Subway Market Became Highly Competitive
When Subway first arrived on the scene, it was the only national chain in town.
However, in 2021, competitors like Firehouse Subs, Jimmy John’s, Jersey Mike’s, and Quiznos have taken a significant bite in the sandwich market, leaving less of the pie for Subway.
Additionally, this spike in new restaurants started occurring right when Subway was plagued with scandal after scandal.
With so much trouble ensuing, it’s little wonder Subway has closed over 1,000 stores since 2018 and counting.
7. Subway’s Brand Barely Evolves
As the Subway brand grows as stale as 30-day old bread, so does its advertising.
Once a boon for Subway, the “Eat Fresh” slogan has become a bit of an albatross as people learn what is really in the food.
For instance, Subway was slow to jump on the all-natural bandwagon that competitors like Panera Bread tout.
That said, because its menu has remained essentially unchanged and only recently upgraded to even having a breakfast menu, consumers looking to honestly “Eat Fresh” are going elsewhere.
8. Employees Are Significantly Maltreated
Subway has been accused of mistreatment of its employees, adding to the franchise image problems. For example, it was reported that employees were underpaid as well as overworked.
Additionally, Subway failed to pay for overtime as required by federal law, which requires time and a half.
That said, American consumers don’t want to frequent restaurants where they know employees are being mismanaged or mistreated, which may also account for Subways’ declining sales.
9. The 2020 Economy
The COVID pandemic caused a ripple throughout the US economy, and the already failing Subway franchise appears to be among the hardest hit.
Because of this fact, Subway’s corporate arm decided to give its franchisees a break in the 8% royalty fees.
Sadly, the break only lasted a few weeks, which created a backlash against CEO John Chidsey.
Then, many Subway franchise owners had to turn to the government for relief on rent, but some decided to abandon ship and close-up shops instead.
10. Troublesome Leadership
Many Subway restaurant owners have cited the poor leadership of CEO John Chidsey as the primary reason for Subway’s decline and closures.
With Chidsey at the helm, Subway laid off 500 corporate staffers, raised start-up costs of the franchise, and created menu items that just aren’t grabbing consumer attention.
Therefore, it would appear the lack of trust in the one item fast-food giant has culminated in a war between the haves and the have-nots.
In any case, such a public display of infighting does not instill consumer confidence and can eventually impact sales.
From poor management to numerous scandals, the Subway brand is sadly heading towards an inevitable decline.
Does this mean Subway as a restaurant entity is going the way of the dinosaur?
Not exactly, many restaurants see dips in their popularity, and Subway still has a bit of name recognition and currency in the marketplace.
If Subway rebrands itself, expands its menu, and considers the needs of its consumer base, it could just nose up and become a major player in the restaurant sector again.