Business Insider – Retail – Subway tried to hand out 1 million subs to promote its revamped menu this week. Instead, some franchisees said they struggled to give away free sandwiches.Estimated Reading Time: just 4 min

As reported on Business Insider – Retail:

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Subway kicked off an ambitious menu revamp this week with a promotion giving away 1 million free 6-inch Turkey Cali Fresh subs on July 13. But some franchisees across the US are now complaining that the promotion was a flop as fewer people than expected showed up to claim a free sandwich. 

Franchisees blamed the turnout on poor marketing by the chain, whose sales and store counts have been declining for years. Some franchisees complained on a private web forum for Subway franchise owners seen by Insider. Others who spoke to Insider requested anonymity in order to speak freely, but their identities are known by Insider.

"Did you ever have that bad dream where you had a party and no one showed up? Then you had all this food you prepared left unused. What does this say about our advertising?" an operator based in the South said in a leaked group message viewed by Insider.

Some Subway franchisees reported having fewer than 20 people show up for the giveaway, leaving them with large amounts of excess inventory. In contrast, Chipotle workers and customers said some stores were overwhelmed by a July 6 free burrito promotion.  

An operator of Subway restaurants in the Midwest said one of his stores had four people stop in to redeem a free sandwich. A multi-unit West Coast-based franchisee interviewed by Insider said he had just 10 to 20 show up at each of his stores, but the expectation given by Subway was operators should prepare to limit the giveaway to the first 50 people in line. 

The turnout "was ho-hum," he said. "It was much ado about nothing,"

"Corporate leadership did not manage our expectations. We had expectations that they were going to blow us out the door," another veteran operator told Insider in an interview. "Well, we just had the opposite problem. It was a giant letdown."

The franchisee added he and other operators put up marketing materials and banners in preparation for the giveaway. More than 10,000 US restaurants, or half of Subway locations, also shut down early Monday night to train teams ahead of the Eat Fresh Refresh campaign launch.

The menu changes add 11 new and improved ingredients such as deli-thin turkey and ham and two new bread options. 

On Thursday, Subway told Insider that the "sampling" event "beat" expectations. 

"The giveaway beat our projections with thousands of restaurants participating, giving our guests the opportunity to try the new, freshly prepared Turkey Cali Fresh sub," the company said in a statement sent to Insider. "Overall, restaurants saw a significant lift in sales and traffic."

In a private communication posted to the company’s corporate site on July 15, seen by Insider, Subway said, "an average of 24 subs were given out per participating restaurant, beating our projection of 15 to 20." 

The West Coast-based operator mocked the memo, saying Subway readjusted its projections after the event because it was so "underwhelming."

It’s not clear how many of Subway’s 22,000 restaurants participated in Tuesday’s promotion. Franchisees and former store owners with close ties to operators said the marketing failed to reach customers, most of whom "had no idea" the giveaway was happening.

Veteran franchisee Nayanika Barker, formerly chair of the North American Association of Subway Franchisees, said corporate never promised "any advertising behind" Tuesday’s promotion. 

"It was never meant to blow the doors off and have a line wrapped around the building," said Barker, who has operated Subway franchises in California for 22 years. "Some stores gave away 10. Some stores gave away 100."

Her two stores each gave away about 60 or 70 sandwiches each, she said. 

According to Subway’s corporate memo viewed by Insider, "the top three quartiles of restaurants had a double-digit sales increase versus 2019, and across all restaurants, there was a double-digit improvement in traffic for the day," the company said. 

One franchisee based in the Southwest said the promotion fueled "the best Tuesday I have had in over 3 months" on a private message board viewed by Insider.

For Barker, Tuesday was not about giving away free food. It was about introducing a long overdue revamped menu that includes upgraded bread, deli-style sliced ham and turkey, smashed avocado, fresh mozzarella, and a parmesan vinaigrette.  

"So franchisees have been asking for better bread for the longest time because, you know, our bread was kind of flavorless and not doing so well. Now our bread is unbelievably amazing," Barker said. 

This comes as the authenticity of the chain’s tuna has recently come into question. The company has disputed these stories, including a report by the New York Times, saying its restaurants "serve 100% wild-caught, cooked tuna."

On July 13, Subway also promoted its Eat Fresh Refresh campaign in a new national advertisement featuring sports icons Tom Brady, Serena Williams, Charles Barkley, and Megan Rapinoe, Barker said. 

That same day, Subway announced that Charles Barkley will be the new "voice of Subway" in ads.

"I love his voice on the commercials," Barker said. "I’m so excited about this. And I haven’t been excited about some of the stuff we’ve done for a really long time."

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Source: Business Insider – Retail
Author: Nancy Luna
Date: July 16th 2021

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