Subway is a chain of sandwich shops that have been operational for more than 60 years and is known for “Eating Fresh.” Despite this, a significant number of franchises have failed in recent years. Let us know Why is the Subway System Failing?, and the Reason for its falling.
How did a once-profitable chain endure so many financial setbacks? If you’ve ever wondered why Subways stores are closing, keep reading to discover them.
Why Subway is failing?
Subway is in trouble for a variety of reasons, the most serious of which is a drop in food quality by 2022. In addition, the business was affected by the arrest and subsequent incarceration of its most prominent ambassador, Jared Fogle, in 2015. Customers have also expressed dissatisfaction with Subway’s loyalty programme, which has numerous defects and concerns.
So, it looks that Subway has more than a few issues with the dysfunction that has resulted in its multiple closures. Continue reading if you’d want to learn more about the concerns stated above, as well as additional Subway closure-related issues.
Reasons
1. Jared Fogle in two words
With its “Eat Fresh” tagline and spokesperson, Jared Fogle, Subway appeared to be on the verge of dethroning some of the largest names in fast food.
Fogle dubbed it the “Subway Diet,” claiming that he shed 245 pounds just by consuming Subway sandwiches.
Fogle would find himself in deep trouble in 2015 after being accused of underage sex scandals, which led to his arrest and subsequent conviction.
However, the Subway brand suffered a severe image setback from which it has yet to recover.
2. Not – so fresh food
“Eat Fresh,” the Subway motto, claimed that Subway sandwiches were healthier and superior to those of rival fast-food chains.
Subway dishes, on the other hand, are just as high in cards, salts, sugars, and other nasty components.
Furthermore, because Subway goods are only delivered once a week, the ingredients may not be as fresh as advertised.
Furthermore, regular customers frequently remark that toppings are wilted and faded, and personnel confess that some things are occasionally close to expiration.
3. The Subway rewards program has serious flaws
The Subway MyWay Rewards programme, which debuted in 2018, claimed that for every dollar spent, consumers would receive four tokens.
They would receive $2.00 after collecting 200 tokens, or $2 for every $50 spent.
Customer experiences were immediately ruined by software faults and many data collecting vulnerabilities uncovered in Subway’s mobile apps.
Subway has committed to fix the system in order to regain consumer trust since then.
4. Meats with high levels of soy and by products
Consumers expect this when they believe the food is healthier and created with natural, high-quality components.
Unfortunately, CBS Marketplace discovered that some meats, such as Subway’s chicken, included soy and unknown byproducts.
Surprisingly, DNA testing revealed that just 53 percent of the oven-roasted chicken and 46 percent of the Teriyaki strips were consumed.
Subway would later sue CBS, claiming that the tests “lacked scientific rigour,” but the harm had already been done.
5. Frustrated Franchisees aired their dirty laundry
When Subway’s corporate headquarters decided unilaterally to bring back the $5 footlong, 400 franchisees were outraged.
The assumption that the promotion would hurt rather than help sales was the source of their rage.
As a result of the news of Subway franchise owners’ displeasure leaking out, Subway’s sales plummeted even further.
It’s also difficult to attract new investors when present business owners discover corporations are defrauding them.
6. The Subway Industry has become extremely competitive
Subway was the only national chain in town when it initially opened its doors.
In 2021, however, competitors such as Firehouse Subs, Jimmy John’s, Jersey Mike’s, and Quiznos have taken a big bite out of the sandwich market, leaving only Firehouse Subs, Jimmy John’s, Jersey Mike’s, and Quiznos.
Furthermore, this surge in new eateries began just as Subway was embroiled in crisis after scandal.
With so many difficulties, it’s no surprise that Subway has closed nearly 1,000 locations since 2018.
7. The Subway brand is hardly evolving
The advertising for the Subway brand is becoming as stale as 30-day-old bread.
The “Eat Fresh” motto, which was once a boon for Subway, has become a bit of an albatross as customers understand what is truly in the meal.
Subway, for example, was late on the all-natural bandwagon that competitors like Panera Bread promote.
Consumers wishing to truly “Eat Fresh” are going elsewhere because its menu has stayed virtually identical, and it was only recently improved to include a breakfast menu.
8. Employees are subjected to a great deal of mistreatment
Subway has been accused of mistreating its staff, further tarnishing the franchise’s image. Employees, for example, were alleged to be underpaid and overworked.
Subway also failed to pay overtime as required by federal law, which calls for time and a half compensation.
However, American customers are less likely to patronize restaurants where they believe employees are being mistreated or mismanaged, which could explain Subway’s dropping sales.
9. The Economy in 2022
The COVID pandemic sent shockwaves across the US economy, with the already struggling Subway brand taking the brunt of it.
Subway’s corporate arm decided to offer its franchisees a reprieve on the 8% royalty costs as a result of this.
Unfortunately, the vacation was only for a few weeks, resulting in a backlash against CEO John Chidsey.
Many Subway franchise owners were forced to turn to the government for rent relief, while some choose to give up and close their stores instead.
10. Difficult Leadership
The bad leadership of CEO John Chidsey has been highlighted by several Subway store owners as the key reason for the company’s downturn and closures.
Subway lay off 500 corporate employees under Chidsey’s leadership, increased franchise start-up fees, and produced menu items that aren’t attracting customers.
As a result, it appears like a conflict between the haves and the have-nots has erupted over the lack of trust in the one-item fast-food behemoth.
In any case, such a public display of infighting does not inspire consumer trust and may have an adverse effect on sales.
If you want to learn more about Subway, check out our articles on why Subway cookies are so good, why Subway is so pricey, and Subway stock.
Conclusion
The Subway brand is tragically moving towards an inevitable demise, thanks to weak management and multiple controversies.
Is this a sign that Subway as a restaurant chain is on its way out?
Not quite; many eateries are experiencing a decline in patronage, yet Subway retains some brand awareness and currency in the marketplace.
Subway could simply nose up and become a significant factor if it rebrands itself, extends its menu, and respects the demands of its customer base.
