In the recent weeks, Subway’s $6.99 footlong sandwich promotion, which ended on September 8, received backlash from franchisees, pointing out that it was hurting their bottom line. The North American Association of Subway Franchisees (NAASF) raised concerns about the impact of such aggressive pricing strategies on their ability to operate profitably. Bill Mathis, the chairperson of NAASF, stated that franchisees are struggling with narrow profit margins, and the $6.99 deal on sandwiches originally priced higher led to additional pressure given rising food and labor costs.
Moreover, concerns were also raised about Subway’s requirement for costly store remodels and the introduction of new in-store deli slicers, which start at $3,161 and have become a costly burden for franchisees. Attorney Robert Zarco, general counsel for NAASF, highlighted the lack of consideration from Subway’s corporate side towards the financial impact on franchisees, accusing them of being focused on short-term benefits without regard for long-term profitability.
Additionally, extended store hours, stainless steel “fresh loc lids” blocking customer views of meats, and the recent beverage agreement with Pepsi after ending the long-standing partnership with Coke were other issues brought up by NAASF in a letter to Subway’s leadership. Franchisees felt pressured to sign the new beverage contract or face franchise agreement termination, signaling a lack of communication and understanding between the franchisor and franchisees.
To address these concerns, NAASF is seeking a constructive dialogue with Subway’s leadership to find a middle ground that benefits both parties. The association aims to work collaboratively with Subway to address the issues raised and ensure a sustainable future for Subway franchisees. However, if a satisfactory resolution is not reached through dialogue, legal action may be considered to protect the interests of franchisees.
As the NAASF continues to advocate for the concerns of Subway franchisees, it remains hopeful that open and honest communication can lead to mutually beneficial solutions. The association emphasizes the importance of recognizing franchisees’ input and working together to navigate the challenges facing Subway’s franchise system. By fostering a transparent and cooperative relationship, both Subway and its franchisees can ensure the long-term success and profitability of the brand.
Source link
