Most Subway restaurants have been closing down all across America. Some franchises are trying to save themselves while others are just looking for their next business opportunity.
What happened to Subway is that the company failed to grow as it once did. Subways were once very successful; however, due to financial issues, the franchise stores have been slowly going through a major financial crisis.
Why Is Subway Failing In 2022?
Subway has had food quality issues since the beginning of the 21st century. Also, the arrest and eventual sentencing of its most famous spokesperson, Jared Fogle in 2015 has had a negative impact on the brand. This was exacerbated by the rise of fast food chains which have lower costs and are easier to serve, which has decreased Subway’s bottom line.
1. Two Words: Jared Fogle
A group of Subway employees came out and said that they were never told about the Subway diet and were not allowed to talk about the secret diet.
Fogle said the Subway Diet was very similar to the one he lost almost 7 years ago.
He was caught having sex with a minor, and that was bad enough, but then the Feds got suspicious and searched his house, and found child pornography, which led to Fogle’s eventual prison sentence.
Subway’s brand never recovered from the damage it suffered to its reputation from these incidents.
2. Eating Not So Fresh
This wasn’t the case. The Subway food contained more oil and less vitamins. The company was selling more unhealthy food than any other fast-food brand at the time.
As a matter of fact, Subway foods are just as loaded with cards, salts, sugars, and various other unsavory ingredients as the generic fast food places.
Additionally, the ingredients are shipped only once a week, meaning the ingredients are only fresh enough for one week.
Moreover, the customer often complained it took too long to place the order and the food appeared wilted and faded while the employees revealed the food was sometimes near expiration.
3. Subway Rewards Plan Is Heavily Flawed
Subway’s MyWay rewards program makes it easier to earn rewards. You can earn rewards by riding the subway as often as you like.
After 200 tokens, they would earn 2 dollars per $50, which translates to 2 bucks per $50.
After an incident that led to an investigation, issues with Subway’s Android mobile app revealed glitches and data collection issues, which made the customers experience horrible.
Subway restaurants said they will fix their problem in addition to replacing the entire system.
4. Meats Filled With Soy And Byproducts
The more natural the ingredients, the more likely it is that consumers will be convinced that the food is healthier.
Unfortunately, CBS Marketplace discovered that chicken at Subway restaurants was filled with soy and unknown byproducts.
Astonishingly, DNA tests revealed that consumers only got 53% chicken in the oven and 46% in the barbecue.
Then, Subway sued CBS and claimed that the test results were “scientifically flawed”, and also cited the fact that this was before DNA testing was common in courts.
5. Disgruntled Franchise Owners Aired Dirty Laundry
Subway’s franchisees weren’t happy with the company’s CEO Fred Turner’s decision to bring back the $5 footlong roll. They grew incensed when Turner decided to bring back the price of a Subway footlong.
However, it was said that the promotion would hurt sales, not increase them.
As a result, Subway suffered even more in sales, prompting some franchise owners to seek legal redress.
I think the biggest problem is that there is a very high level of trust in the current business owners. They have been in control for longer than any of other investors.
6. The Subway Market Became Highly Competitive
That’s why I’m so happy that the Subway stores are opening.
In 2019, competitor companies, such as Jimmy John’s and Quiznos, are taking a significant bite in the sandwich market.
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In addition, this sudden increase in new restaurants started happening right after Subway was having a lot of scandals.
With so much trouble ensuing when it comes to the business, it’s little wonder Subway has closed over 1,000 stores since 2018 and counting.
7. Subway’s Brand Barely Evolves
The Subway brand is growing stale as it reaches 30 days.
When Subway began advertising that they “Eat Fresh”, the world was introduced to the fact that Subway’s food was fresh, but not necessarily healthy.
Like Panera Bread was slow to join the all natural trend that competitors like Subway have been peddling.
But because its menu has stayed the same for the past 30 years, and only recently added a breakfast menu, consumers looking for a “real” “Eat Fresh” restaurant are going to other nearby establishments.
8. Employees Are Significantly Maltreated
An undercover investigation found Subway employees working more than 60 hours a week, with employees not being paid overtime. The franchise also has had allegations of underpaying its employees and that their hours have been faked.
In addition, Subway failed to pay for overtime which is one and a half times their regular hourly wage.
So that means that Americans don’t want to go to restaurants where they know that they may be mistreated and/or not respected.
9. The 2020 Economy
Subway restaurants struggled to remain in business amid the COVID-19 pandemic, reports the Los Angeles Times.
The corporate arm of Subway decided that it would give its franchisees a break in the royalty fees.
The company was forced to lower the amount of free accounts users could have and also the amount of storage users are allowed.
Because of many franchise owners having to close and lay-off workers, many Subway franchise owners abandoned many of their franchisees and closed shops.
10. Troublesome Leadership
Subway’s success is based on having good leadership which is why the company has declined despite having many quality products.
But a few years later, the brand was making a comeback.
Subway increased start-up costs for franchisees after the company was run by someone else. Also, Subway introduced new sandwich items that aren’t very appetizing.
If you haven’t looked on the Web, you may have missed the recent kerfuffle between McDonald’s and a fast-food workers union. McDonald’s is upset with the wages and working conditions that these fast-food workers are demanding because, for the company, their wages and working conditions are simply too damn good.
A public display of infighting between companies is not good for consumer confidence and will always impact sales.
If you want to know more about Subway, you can also read more on our posts on why is Subway expensive, why Subway cookies are so good, and Subway stock.
While working for a Subway joint venture, I encountered numerous problems at the business. I had to deal with issues that I’ll never forget, including things such as unpaid overtime, illegal labor practices, and problems with our manager.
So far as I know the Subway chain of restaurants is still going strong. Maybe I’m wrong about this.
Oh, I don’t think so. Subway has such a huge brand recognition, most people have eaten at Subway more than once. As I said, they have the name recognition factor, as well as most people know the chain itself.
Subway could just stick to what they do best: sell cheap food for a lower price, which has always been their core business.
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