Subway

Operations

Federal court orders a Subway franchisee to close or sell their restaurants

The judge awarded nearly $1 million in back pay and damages to employees of a Bay Area 14-unit Subway operator after finding they issued bad checks, kept tips and violated child labor laws.

Financing

Stake your claim to the low-price market at your own risk

The Bottom Line: Subway and Burger King have staked their claims as value leaders in their respective segments. Recent events have highlighted the difficulties of that position.

The sandwich giant, which is being sold to Roark Capital, told franchisees that they must accept mobile app discounts by Dec. 28. A lot of the brand’s operators were not pleased.

The Bottom Line: The addition of the sandwich giant will make Roark a bigger player than McDonald's in the U.S. But its position in the sandwich market will not be all that unusual.

Technomic's Take: The sandwich chain has been shedding locations since 2016. But the brand may be poised for a sustained turnaround.

The Bottom Line: A big coupon drop by Subway gives customers some huge value. That’s a potential problem at a brand with profitability challenges.

The company is shifting to a tiered loyalty program, called Subway MVP Rewards, based on level of spending.

The Bottom Line: Ike’s Love & Sandwiches has grown to 100 locations. And a surprisingly big part of its growth strategy involves closed Subway restaurants.

The Bottom Line: The 22-year-old private equity firm has been involved in many of the industry’s biggest deals, especially in recent years. And Subway isn’t even the biggest.

The Bottom Line: The lengthy sale process and the apparent deal terms in Roark Capital’s winning bid reveal just how difficult a turnaround the sandwich giant is.

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