Subway's CEO, John Chidsey, made it clear to the chain's operators: it's time to give their stores a fresh look or say goodbye to the franchise.
To ensure this major update happens across the board, Subway is bringing in franchise owners who have already revamped their outlets to assist others in remodeling. This initiative highlights the company's commitment to modernizing its appearance and enhancing the customer experience in all its locations.
Subway CEO's Tough Love: Remodel or Exit
At a recent company convention, Subway's CEO, John Chidsey, didn't mince words with the chain's operators. He issued a straightforward directive to those lagging in updating their stores: spruce up or step out. This firm stance came directly from Chidsey during the event, as recounted by several franchisees.
Chidsey didn't stop there. He called on franchisees who have already modernized their outlets to encourage and even pressure those who haven't followed suit. The rationale? Outdated stores are not just a problem for their owners but are dragging down the entire Subway brand.
"One operator's take was unequivocal: "His message was clear. Get on board with their plan or go away."
Yet, not everyone saw Chidsey's stark request in a negative light. Some operators rallied to his defense, suggesting the CEO's strict approach was a necessary push for unity and progress. They believe the push for renovations is a bid to share the proven benefits of modernization across the franchise network.
Many operators are grappling with financial constraints, making significant investments challenging. With cash flow tight and borrowing costs at a peak, the path to widespread store remodels is fraught with hurdles.
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Subway's Remodeling Drive: A Fresh Look for Growth
Subway is adamant about updating its restaurants, viewing this initiative as crucial for its future success. Despite some resistance from certain franchise owners, the company's leadership is pushing forward with its renovation plans.
Bill Mathis, the chair of the North American Association of Subway Franchisees (NAASF), emphasized the importance of keeping up with the times during a recent discussion on the Restaurant Business podcast. He pointed out a simple truth: "You can't continue in this restaurant world and have stores look like 20 years old. People will stop coming."
Subway officials have shared with their franchisees that about 10,000 U.S. locations have already been updated with a new look. The company is concerned that if the appearance of Subway restaurants isn't consistent, it could turn customers away and slow down the brand's overall growth.
This drive towards modernization underlines Subway's commitment to staying relevant and competitive in the fast-food industry.
In an ambitious effort to revitalize its U.S. stores, Subway has introduced a generous multimillion-dollar grant program encouraging franchisees to remodel their aging locations. This initiative promises to finance about 25% of the costs for a more affordable renovation option.
As of June 2019, the Milford, Connecticut-based sandwich giant reported that nearly 5,400 store operators have jumped at the chance to apply for the grant.
While financial support is available for Subway's premium "Fresh Forward" revamp, Don Fertman, the company's Chief Development Officer, noted that the majority of franchisees are opting to use the funds for the "Fresh Start" remodel, a less costly makeover option introduced last year.
This move represents Subway's proactive step towards modernizing its stores and enhancing the customer experience.
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