Subway’s New Strategy Emphasizes Guest Experience, Targets Multi-unit Operators | Franchise News



After its fair share of reputation challenges over the years, Subway is changing its development strategy as it also revamps restaurants and menus.

“We are evolving from a company that has been focused for decades on development and expansion,” Subway Senior Vice President of Development Steve Rafferty said. “And that strategy worked. We are the largest restaurant company in the U.S.” by number of stores. “But we believe it’s time to evolve to a more experience-focused company, focusing on what the guest needs and what the guest wants.”

The new approach was announced just days after a scathing segment on “Last Week Tonight with John Oliver” aired in May. Oliver brought up Subway’s less-than-stellar media appearances over the years, including its tuna allegedly not being tuna (which Subway disputes) and an Irish court ruling Subway’s bread can’t be called bread because of its sugar content. Then there’s Jared Fogle, the former Subway pitchman who is serving a 15-year prison sentence after pleading guilty child pornography and sex crime charges.

“If your franchisees are giving interviews like they are in witness protection, and the public is constantly debating if your bread is bread and your tuna is tuna … something has gone very wrong,” Oliver said in the segment.

Subway tries “not to be distracted by that press,” Rafferty said. Instead, the brand focuses on what its team can do today to improve the customer experience. “We really try and stay focused as a leadership team here on the things that are really important to us: Delivering better food, delivering restaurant excellence, changing the game when it comes to digital and providing a compelling value for our customers.”

If necessary, like after the tuna incident, Subway provides franchisees with information and resources to respond to guest inquiries.

The company has brought on new leaders since 2015, when founder Fred DeLuca died. DeLuca’s sister, Suzanne Greco, led the brand for three years before retiring in 2018. Trevor Haynes, who stepped in as interim CEO, is the brand’s president of North America.   

Subway is now shifting its development focus to quality over quantity. It closed thousands of stores over the past few years, Rafferty said, “And we’re OK with that.” It had 27,129 locations in the U.S. at the end of 2015; by the end of 2021 that number was down to 21,147.

On average, franchisees own about three stores apiece, so Subway has about 7,000 operators nationwide, give or take a few, he said. Subway does not disclose its average unit sales.

One multi-unit Subway operator is Donna Curry, a Subway franchisee for 40 years with 57 locations in Clark County, Nevada, which includes Las Vegas. She has two more restaurants under construction. When Curry started out as an operator, the brand had fewer than 300 restaurants nationwide.

She managed her first store, and once she trained someone to replace her as the store’s manager, she opened another store. Curry continued this process until she took herself out of the day-to-day store operations roles. She is also trying out some new concepts.

“I’m currently working to diversify my portfolio through testing some of Subway’s non-traditional concepts, such as unattended retail or smart fridges, which will help us easily reach guests in casinos, airports, universities and other high-traffic locations,” Curry said in an email.

The brand has given Curry the freedom to expand her business over the last four decades, she said. Curry has used Subway’s remodel grant program to remodel 20 of her stores.

About 22 percent of Subway’s 21,000 U.S. locations have been remodeled to the new “Fresh Forward” design, Rafferty said, with another 20 percent or so signed up for a revamp to come. The brand introduced its “Big Refresh 1.0” menu update in the summer of 2021, in which it added two new breads, plus new toppings and meat options, including roast beef and rotisserie chicken. The brand debuted four new signature sandwiches.

The Big Refresh 2.0, launched in July, brought 12 new signature “Subway Series” sandwiches. The new menu options allow customers to order sandwiches by name or number and don’t require the customization Subway is known for. The revamp includes three cheesesteaks, three Italian-inspired, three chicken and three club sandwiches.

“They’ll be craveable sandwiches that we encourage our guests to try the way that our chef has designed them,” Rafferty said.

Curry said the company’s menu revamp has “reinvigorated” her employees and customers. She’s noticed her guests ordering their sandwiches by name or number—something staff and customers have adapted to quickly.

“I’ve been impressed with our new leadership’s focus, alignment and clear vision for the future, which we are seeing reflected in an increase in sales results and traffic,” Curry said. “I’m seeing increased traffic and sales across my restaurants and am excited about the positive momentum.”

She attributes much of her success as a franchisee to the way she treats her employees.

“If you take care of them, they will take care of your guests,” Curry said. “It is critical that they have a clear pathway to success, feel appreciated and are included as part of the team. It is also important to always show your gratitude, whether that be with a bonus, a pat on the back or taking them out for a thank you meal.”

In addition to customer-forward development updates, Subway is looking to recruit more multi-unit franchisees who operate other QSR brands.

“They have development expertise, they know their market, they have relationships, development relationships in those markets that can help grow, and certainly they have development capital to be able to grow in that market,” Rafferty said.

Subway is also teeing up international growth, with agreements signed for 5,000 new restaurants in countries including Malaysia, Thailand and Kuwait. “They’ve seen the Subway story and say ‘Wow, I get it. I see what Subway can be,’” Rafferty said. “They’re signing on to be an agent of change for Subway and help build a better Subway in those regions.”



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