Subway is the world's biggest sandwich chain. It overtook McDonald's as America's biggest fast-food restaurant by outlets in 2002, and achieved the same feat on a global scale in 2010. Growth was at least partly generated by Subway's claim to offer a healthy alternative to burgers and fries, but also by a supremely efficient franchising model organised by parent company Doctor's Associates. As a franchising machine it has few equals, voted the #1 franchise opportunity in the US an astonishing 17 times between 1985 and 2010 because of its levels of franchisee support and development and the potential for growth. The advantage to customers is the flexibility of the menu, as well as its made-before-your-eyes freshness. After years of steady growth, though, performance slowed dramatically in the mid-2010s, especially in the US where there have been a series of conflicts between corporate HQ and franchisees. Another blow was an embarrassing scandal surrounding longtime brand ambassador Jared Fogle, followed by the untimely death in 2015 of founder and CEO Fred DeLuca, who had almost single-handedly overseen every aspect of the business. His sister Susanne Greco succeeded him for a while but she too stepped down in 2018. Trevor Haynes, previously corporate development officer, was named as interim acting CEO until former Burger King leader John Chidsey was appointed in late 2019. As of early 2020, the chain contained around 38,380 outlets - down from a peak of 45,000 in 2015 - spread across 104 countries. The US is still the biggest market, but sales there have been declining for the past few years, prompting the closure of several unprofitable stores. By the end of 2020, Subway had 22,175 outlets in the US, down around 1,500 stores than the year before. That's still around 7,000 more than Starbucks and 8,500 more than McDonald's, but Subway has been slipping down the rankings and now ranks #7 by system sales. Despite its huge footprint, Subway's annual sales per store are significantly lower than its rivals; another contributing factor in the friction between the company and its franchisees. Trade source NRN estimated sales per outlet at just $413,000 per annum in 2020, putting it only just inside the Top 200 chains. (Starbucks manages $1.2m per outlet, McDonald's $2.9m per outlet and Chick-Fil-A a staggering $4.0m). US system sales were $9.2bn in 2020, down from a high of $12.5bn seven years earlier. There are around another 16,000 outlets in 103 other countries worldwide. Global system sales were around $17bn. All outlets are franchised. Parent entity Doctor's Associates is wholly owned by Fred DeLuca's widow Elizabeth and his longtime business partner and co-founder Peter Buck.
Capsule checked 23rd October 2020
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Who are the competitors of Subway? Subway's dominates the limited service sandwich chain with around 47% market share. Its main rivals in that segment are Arby's and Jimmy John's, now both owned by Inspire Brands. Panera Bread is similar but is classified as a bakery/cafe. See Restaurants Sector for others.
Who handles Subway's advertising? Find out more from Adbrands Account Assignments
Historical profile information for Subway
Adbrands Daily Update 22nd Jun 2020: There were some significant changes in the ranking of America's biggest restaurant chains for 2019, even before the chaos being inflicted this year by Coronavirus. According to research from industry watcher NRN, US system sales for Subway took a sharp tumble, causing the sandwich chain to fall from 4th to 6th place. Taco Bell stormed up the chart to seize 4th place. Its near-9% jump in system sales represented an increase of almost $1bn in takings. Burger King moved into 5th place. Among the Top 20, there were year-on-year declines also for Applebee's and Olive Garden, while fast-casual Chinese brand Panda Express joined the Top 20 for the first time as a result of a 12% increase in sales. Popeyes, now owned by Burger King parent RBI, chalked up an impressive 18% leap to 19th place. McDonald's, Starbucks and Chick-fil-A held firm to the top three spots respectively.
Adbrands Daily Update 14th Nov 2019: Subway named former Burger King chief John Chidsey as its CEO following a prolonged search. He takes over from interim leader Trevor Haynes, who has been leading the group since Susanne Greco - sister of Subway's founder Fred De Luca - stepped down in June last year. Haynes moves to the role of North America president. Chidsey led Burger King for more than four years until its takeover by investor 3G in 2010. Since then, he has focused primarily on non-executive roles.
Adbrands Social Media 10th Oct 2019: After a 10-month search, Subway finally named Carrie Walsh as its new chief marketing officer for North America. She was previously SVP marketing at arts and crafts retailer Michaels Stores, and before that the marketing chief for Pizza Hut USA. Robin Seward also joins the company from restaurant chain Schlotzsky's as SVP marketing planning. The Subway CMO role has been vacant since the retirement of long-time incumbent Joe Tripodi at end of last year, though Roger Mader was filling in on an interim basis.
Adbrands Social Media 19th Jul 2019: "Make It What You Want". It's always fun to have a go at your competitors by mocking their brand mascots. Especially if, like Subway, you don't really have one of your own (any more) so there's no chance for them to respond in kind. Here in the UK, Subway recently dropped longtime partner McCann and tied up instead with edgy indie Above & Beyond. Here are the results: a cheeky, comparatively low-fi promotion for the wider range of choices offered by Subway over the partly disguised (for obvious legal reasons) rival fast-feeders. No work of genius, admittedly, but an entertaining poke in the ribs.
Adbrands Social Media 24th Sep 2018: How cheeky is this? To be honest, we think Subway and its dedicated Dentsu Aegis agency The Franchise are kidding themselves if they think McDonald's icons would choose a Subway meal on their days off. McDonald's has its faults but it's still an immensely impressive feeding machine. Attack ads like this - and the ones from Wendy's that have for years been highlighting Golden Arches' frozen patties - are just wishful thinking. According to market-watcher NRN, McD's US system sales grew 3.4% last year, compared to 3.1% at Wendy's and a 4.4% decline at Subway. Even so, that doesn't stop the ad from bringing a smile to our faces, if only for its sheer nerve.
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