Subway franchisees protest new value meal deal amid loss fears

Subway franchisees are expressing significant concerns over a new $6.99 footlong sandwich promotion, which is intended to attract budget-conscious customers. Bill Mathis, chair of the North American Association of Subway Franchisees (NAASF), has advised members to refrain from participating in the promotion if their franchise agreements permit. This advice stems from fears that the promotion could lead to financial losses, as franchisees typically charge between $11 and $17 for a footlong sub. The NAASF, representing around 2,500 franchisees operating approximately 10,000 Subway locations, is worried about the potential traffic lift needed to break even on the promotion. Mathis highlighted that some estimates suggest a traffic increase of up to 30% would be necessary, raising doubts about the effectiveness of the current leadership in driving such traffic. Despite the promotion, some franchisees have reported that customer traffic has remained unchanged, indicating that the deal may not be as appealing as intended. The promotion was introduced during a conference call that some franchisees described as an 'emergency meeting,' reflecting the urgency of the situation. Subway has been facing declining sales, with reports indicating a drop of 5 to 10 percent in certain regions. The chain has also seen a reduction in the number of locations, from over 27,000 in 2015 to around 20,000 currently. The management has denied that the conference was an emergency, asserting that they maintain regular communication with franchisees regarding business updates.