Subway Announced a $6.99 Sandwich Deal. Here’s Why Franchisees Are Furious About It

Subway, which has faced its fair share of beleaguerments in recent months, recently announced a $6.99 sandwich deal to combat inflation and customer dissatisfaction with prices. Though the limited-time offer has enticed patrons, it has annoyed franchisees, who are concerned with how this deal will affect their bottom lines.

The $6.99 Subway Deal

From Aug. 26 to Sept. 8, Subway is offering a $6.99 footlong sandwich deal. This package includes personalized creations from the chain’s wide variety of fresh ingredients, as well as all 22 options in the Subway Series. Customers can use the promo code 699FL on the app or the website to get the promotion.

Subway’s whole menu of footlongs is available during the event, which also offers the return of beloved sauces like Creamy Sriracha and BBQ, as well as new offerings like SubKrunch, lavash-style flatbread, and Cheddar Cheese sauce.

The company’s president, Doug Fry, stressed that the offer addresses the need for reasonably priced but tasty meal options by offering both value and quality. Even though this offer might not quite bring back the fond memories of the $5 footlong, customers will still be able to save money on subs, which can now run up to $14.

Franchisees Are Furious

The announcement of the deal from the corporate offices has the largest franchisee group furious about the effect it could have on its bottom line.

Bill Mathis — chair of the North American Association of Subway Franchisees (NAASF) and speaking for its board of directors — advised the group’s members to ignore the promotion, according to a report from The New York Post.

“If your franchise agreement allows, DO NOT PARTICIPATE in the $6.99 promotion,” Mathis urged franchisees in a private blog post. “NAASF is advising to opt out.”

The sole significant franchise organization for Subway, NAASF, is made up of over 2,500 franchisees nationwide who run about half of the fast-food chain’s nearly 20,000 locations in North America.

The majority of Subway’s U.S. restaurant franchisees have contracts that were signed prior to 2021 that provide them the option to decline promotions.

Speaking on behalf of the board of the franchise association, Mathis took aim at Subway’s management, led by CEO John Chidsey, in the blog post. Chidsey has irritated franchisees by ordering them to cut prices on sandwiches and make expensive restaurant upgrades despite extremely small profit margins.

“NAASF has a variety of talented members including those who are quite proficient with analysis of break evens,” Mathis wrote. “In some people’s opinions, the traffic lift needed to break even on this promotion is as high as 30%.”

He continued: “If this is accurate or even half accurate, have you seen any promotion that has brought to franchisees that kind of traffic lift from the current Subway leadership group?”

As for this specific promotion, The Post reports that franchisees have been experiencing mixed results. According to a Subway franchisee who has roughly 25 sites and is running the deal, 20% of patrons at one of his busiest locations on Monday purchased a $6.99 footlong sub. But he bemoaned the fact that the traffic in that store was the same as it had been a week prior.

“McDonald’s doesn’t put a Big Mac on its $5 value menu. But we put on all our best-selling subs,” said another franchisee. “We could do one-third or one-half of the menu and not be killed by this promotion.”

According to public statistics, the chain has decreased to just over 20,000 U.S. locations at the end of last year from more than 27,000 at the end of 2015. As a result, franchisees have been finding it difficult to make ends meet.

Given that the corporate headquarters and its operators have distinct incentives, some franchisees are wary.

Regardless of whether franchisees turn a profit or not, Subway takes an 8% share of gross royalties and owns none of its restaurants.