An Emergency Meeting
According to an invite sent to the franchisees that own 19,000 North American locations, Subway is holding an emergency meeting that is set to analyze the chain’s falling profits and sales.
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The invite stated that the company will work on how franchisees can improve traffic, as well as win back market share.
An Essential Conference
In the invite, Subway also stated that this meeting was “essential”, further highlighting how important this conference will be.
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“This conference is essential,” Subway said. “Join us … to discuss the state of the industry and an update on our business.”
A Hasty Meeting
Insiders have already pointed out that it appears this emergency meeting was hastily put together.
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The invite was mailed out just last week and is set to occur this Thursday with many company officials and franchisees around the country.
Subway Disputes Claims
Already, a Subway spokesperson has come out to dispute the claims that the meeting is an “emergency” situation.
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“There is no emergency virtual conference,” the spokesperson said. “We consistently and proactively communicate with our franchisees to share business updates and plans.”
Subway Continues to Offer Discounts
In an effort to continue to bring more customers into their restaurants, Subway has offered various discounts.
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However, many franchisees have become frustrated with these many discounts, as some believe that these price promotions are to blame for the loss in sales and profits.
Franchise Owners Grow Upset at Subway
Many of these franchise owners have grown increasingly upset with the many discounts that Subway is offering to customers.
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“They are doing crazy coupons,” one franchisee stated. “Our gross sales are not even at 2012 levels, and profit then was five times what it is today.”
Subway’s Sales Fall
In recent weeks, data has shown that Subway’s sales have fallen by about 8.7% when compared to what was seen last year.
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Meanwhile, one Subway franchisee who owns 20 locations has stated that his same-store sales are down by anywhere from 5% to 10% in just the last few weeks.
Ongoing Discounts
Franchisees have stated that Subway’s ongoing discounts and coupons have hurt profits, especially as the company is offering many discounts on its most popular items.
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Plus, new menu items — such as their new $ 3-foot-long hot dipper items — have not sold as well as they anticipated.
Many Fast Food Chains Are Struggling
This reported emergency meeting Subway is holding with its franchisees comes as various fast food chains have struggled to bring in customers — and thereby increase profits — in recent months.
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Many Americans have stated that fast food is now too expensive for them. They can no longer afford to eat at these establishments thanks to factors like high inflation.
Fast Food Offers Discounts
This has led many fast-food chains to change up their menus and begin to offer discounts. Most notably, McDonald’s has released a new $5 meal deal to bring back some of its customers.
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However, these discounts haven’t yet helped establishments like McDonald’s, as the fast food giant recently reported that same-store sales have fallen for the first time in four years.
An Ongoing Trend
Some analysts have stated that this may become an ongoing trend, as many Americans are cash-strapped because of years of high inflation.
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Fast food menu prices have become too expensive for them. While these discounts may help somewhat, analysts have pointed out that it hasn’t solved the problem for fast-food restaurants.