Going off track: Subway franchisees decry discounts as hospital-bound CEO struggles to right course

The New York Post ^ | August 29, 2013 | Josh Kosman

[2ndDivisionVet]

This summer wasn’t the best time for Subway sandwich shops — the world’s largest restaurant chain — to stumble.

Founder and owner Fred DeLuca — the driving force and vision behind the Milford, Conn., chain’s growth into a 40,000-unit chain — is in a Connecticut hospital getting treatment for leukemia and, he has told associates, is awaiting a bone marrow transplant.

Still, the 65-year-old billionaire businessman is directing the chain’s operations from a hospital bed.

The hands-on owner is still in daily contact with regional managers trying to find new ways to reverse the sales decline, a Subway development agent told The Post.

Same-store sales at the closely held company dipped 2 percent last month and are down over the last several months — the first declines in recent memory, sources close to the company tell The Post.

Faced with the business setback, DeLuca is not letting his hospital stay stop him from continuing a recent discount marketing blitz aimed at igniting revenue growth, the sources said.

DeLuca in June launched a $4 lunch special — a six-inch sub, beverage and chips — and plans the re-introduction next month of its popular $5 footlong campaign....

[2ndDivisionVet]

Why would a company with such relatively inexpensive products be having trouble during the great Obama recovery?

[DManA]

Jarad been putting on weight again?

[LowTaxesEqualsProsperity]

I love $5 foot longs. 5 days a week.

[dragnet2]

Subway is way over priced...I bought from that joint about 5 years ago and felt totally ripped off by what I got for the prices.

Never been back.

BTW, most franchises are now owned by foreigners and Muslims.

[E. Pluribus Unum]

I'll buy a foot-long roast beef on wheat subway every day of the week for $5.00 a pop.

I will buy ZERO foot-long roast beef on wheat subways every day of the week for $7.00 a pop.

No more complicated than that.

[Nepeta]

Why would a company with such relatively inexpensive products be having trouble during the great Obama recovery?

Because even inexpensive is out of reach for many people. Not everyone on hard times is eligible for food stamps, or other programs.

[SeeSharp]

"Margins at a typical store, where revenues are about $400,000 a year, are now between 8 percent and 10 percent, the franchisee said."

Sheesh! How would you like to be a restaurant owner and only clear 32K a year before taxes?

[Vendome]

because the franchisees think their stores margins should somehow be the highest in the industry, rather than the average, which is 10%.

[2ndDivisionVet]

Try the always $5 Cold Cut sandwich, toasted, with added bacon.

[dragnet2]

How would you like to be a restaurant owner and only clear 32K a year before taxes?

Yeah, I feel real sorry for all the Muslims who own these slop joint franchises.

[2ndDivisionVet]

A Subway owner on a recent John Stossel show said many of his customers came in with exact change!

[Night Hides Not]

It’s my fault...I haven’t eaten (almost) any bread since last October. That means no more Subway sandwiches.

[FlJoePa]

Give me my Jersey Mike's (#13 Mike's Way). Subway sucks at any price imo. I grew up in the hoagie belt (central PA). What Subway does isn't subs.

[Hojczyk]

Best deal the Meatball Subs

[grania]

The franchisers around here cut corners. They don't put enough vegetables, they've substituted cheaper ingredients in some cases, and their bread isn't wholesome enough.

Around here there's a DiBellas. They have fantastic fresh bread, ingredients are top-notch and fresh, everything is cooked or baked there, and for $7 I can get a medium sub that's two meals.

[musicman]

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[2ndDivisionVet]

I’ve met more than a dozen Subway owners and none seemed like Muslims to me. Where are you seeing this?

[colorado tanker]

McDonalds has been very aggressive with its Dollar Menu, I wonder if that’s digging into sales.

[Vince Ferrer]

Sheesh! How would you like to be a restaurant owner and only clear 32K a year before taxes?

Or worse, only clear 32K before your employees strike to get their wages doubled?

[nascarnation]

most franchises are now owned by foreigners and Muslims.

What country are your reporting from?