Subway, the world's largest fast-food chain with more than 42,000 locations worldwide laid off staff as sales fall and leadership changes have many local franchise owners concerned about the company's future.
The sandwich restaurant chain based in Milford, Connecticut, lost nearly $2 billion in U.S. sales last year and closed 1,796 stores nationwide, Technomic reported. However, the downward trend extends beyond 2020. Subway has shrunk by more than 12% since 2015, closing 3,000 locally owned and operated locations.
These results, along with several recent decisions made by Subway chief executive John Chidsey, have fueled speculation.
"He's following the exact playbook that he followed for Burger King," a veteran California Subway operator, told Business Insider.
Chidsey's previous employment before joining Subway was as chief executive of Miami-based Burger King, where he cut costs and ultimately sold the brand to 3G Capital in 2010.
Subway is heavily investing in new office space in Miami, having limited its Connecticut headquarters staff by 40%, and is making significant changes to its franchise structure that could make the company a more appealing acquisition target. The decision came with the removal of several hundred development agents who act as middlemen between the company and its franchisees, adding more stores under direct management as "company territories."
Despite declining sales and store closures, Subway franchisees claim Chidsey isn't stepping up to the plate. According to several franchisees, Chidsey's only form of communication is a video message sent to operators every few months with no opportunity to provide feedback.
Many people were surprised when Subway announced in June that it was eliminating roast beef and rotisserie chicken from its menu, a decision that some operators strongly opposed because the two were popular with customers. Simultaneously, the company launched a "$5 Footlong When You Buy Two" promo, which was met with fierce backlash from operators who claimed it would result in a large loss.
Although no official details about a Subway sale have been released, persistent rumors suggest that Restaurant Brands International (parent company of Burger King) is looking into a deal.
