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Published -
- August 2, 2019
- 6:34 pm
Fall Of Subway
With thousands of store closures in the last three years and petitions against Subway from its franchise owners, the fast-food chain with the most locations globally seems to be on the rocks. We unpack what’s going on and where Subway’s headed from here.
How did the Jared Fogle scandal impact Subway’s brand image and revenue?
The Rise and Fall of Subway
Subway is a franchise that had a meteoric rise to success and then a sudden fall from grace. Subway started as a small sandwich shop in Bridgeport, Connecticut in 1965, created by the then 17-year-old Fred DeLuca. However, Subway did not become a national franchise until 1984. In just 20 years, Subway had 5,000 locations across the United States, surpassing McDonald’s as the largest restaurant chain in the world.
The key to Subway’s success was its unique approach to fast-food. Subway marketed itself as a healthier alternative to other fast-food restaurants, empowering customers to customize their sandwiches and choose healthier options like low-fat dressing, and vegetables. The concept resonated with the public and gained popularity across various age groups.
As Subway continued to grow, it faced several challenges, including criticism from some nutritional experts who found their advertising to be misleading, and franchisee-related issues. Despite this, the brand’s continued growth and success had DeLuca’s net worth surpassing $1 billion and even earning him a place on Forbes Billionaires List.
However, Subway’s downfall began in 2015, when an investigation exposed that Jared Fogle, the brand’s longtime spokesperson, had been sexually abusing minors. The incident led to Subway cutting all ties with Fogle, and the brand suffered a significant backlash. As a result, Subway attempted to rebrand itself, investing in new product development and a revamp of its stores, but the damage had already been done.
Further problems arose shortly after, with the chain struggling to adapt to the changing tastes of its customers. Subway continued to market itself as a healthy alternative, but with consumers becoming increasingly health-savvy, the brand’s offerings seemed outdated. The company also faced stiff competition from competitors like Jimmy John’s, Chipotle, and Panera Bread, which offered fresher and more innovative food options.
As a consequence, Subway experienced a huge drop in revenue, and by 2020, the chain had closed 1,000 locations, with their restaurant count falling to 23,000, and continuing to decrease. Currently, Subway is the world’s third-largest restaurant chain, after McDonald’s and Starbucks, a far cry from its former status as the king of fast-food chains.
In conclusion, Subway’s rise and fall are a testament that marketing and public perception can make or break a company, especially in the ever-changing world of fast-food. In Subway’s case, the brand that once epitomized healthy eating has struggled to keep up with consumers’ evolving tastes, and had trouble adapting to the times. Although Subway remains a beloved brand to many, failure to adapt has resulted in its downfall.
