Issues at Subway

pseudo3d
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Re: Issues at Subway

Post by pseudo3d »

wnetmacman wrote: December 27th, 2017, 6:04 pm
pseudo3d wrote: December 27th, 2017, 5:55 pm I'm sure the local franchise company is subsidizing a number of stores with profits from the better-performing stores.
Doubtful.

Unlike McDonald's and other companies, Subway doesn't do territorial franchising. You can own one store or 10. That was part of their meteoric growth. For $20k, you could own your own business. Most franchisees still only own one store. Subsidizing wouldn't be possible.
Not in central Texas. The company, Centex Subway, opened the first store in Texas in the mid-1980s, and as a result (probably grandfathered in) they run some 17 stores in the Bryan-College Station area alone and some beyond that (possibly Waco). It means that it's easy to pick up easy to pick up shift work at other stores but it means that you'll never see certain items (like sausage for breakfast). Of course, the managers are a mixed bag and I've seen some that are so awfully managed that no one wants to work there as their home store and yet they keep the manager there and the store open.
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Re: Issues at Subway

Post by Super S »

pseudo3d wrote: December 27th, 2017, 8:38 pm
wnetmacman wrote: December 27th, 2017, 6:04 pm
pseudo3d wrote: December 27th, 2017, 5:55 pm I'm sure the local franchise company is subsidizing a number of stores with profits from the better-performing stores.
Doubtful.

Unlike McDonald's and other companies, Subway doesn't do territorial franchising. You can own one store or 10. That was part of their meteoric growth. For $20k, you could own your own business. Most franchisees still only own one store. Subsidizing wouldn't be possible.
Not in central Texas. The company, Centex Subway, opened the first store in Texas in the mid-1980s, and as a result (probably grandfathered in) they run some 17 stores in the Bryan-College Station area alone and some beyond that (possibly Waco). It means that it's easy to pick up easy to pick up shift work at other stores but it means that you'll never see certain items (like sausage for breakfast). Of course, the managers are a mixed bag and I've seen some that are so awfully managed that no one wants to work there as their home store and yet they keep the manager there and the store open.
Sounds like another example of the inconsistency I mentioned. If a big franchisee can't maintain consistency, how can the franchisees with single locations have any standard to go by?
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Re: Issues at Subway

Post by pseudo3d »

Super S wrote: December 28th, 2017, 8:51 am
pseudo3d wrote: December 27th, 2017, 8:38 pm
wnetmacman wrote: December 27th, 2017, 6:04 pm

Doubtful.

Unlike McDonald's and other companies, Subway doesn't do territorial franchising. You can own one store or 10. That was part of their meteoric growth. For $20k, you could own your own business. Most franchisees still only own one store. Subsidizing wouldn't be possible.
Not in central Texas. The company, Centex Subway, opened the first store in Texas in the mid-1980s, and as a result (probably grandfathered in) they run some 17 stores in the Bryan-College Station area alone and some beyond that (possibly Waco). It means that it's easy to pick up easy to pick up shift work at other stores but it means that you'll never see certain items (like sausage for breakfast). Of course, the managers are a mixed bag and I've seen some that are so awfully managed that no one wants to work there as their home store and yet they keep the manager there and the store open.
Sounds like another example of the inconsistency I mentioned. If a big franchisee can't maintain consistency, how can the franchisees with single locations have any standard to go by?
The way Subway operates is extremely standard. Lettuce comes in pre-bagged, produce also comes in through suppliers (and that can be hit and miss) and sliced by the slicers Subway uses. Bread comes in frozen sticks, flatbread is just thawed, and running everything is explained by the proper of manual of style. It isn't that hard. The problem is that a lot of stores don't have enough sense to properly instruct their employees (rarely sober/drug-free) on obvious flaws like throwing out produce (and occasional meat) that doesn't look right, or not labeling things for the proper dates, not preparing the right types of sauces (I think the "bad store" I worked at some half-dozen spare bottles of ranch but hardly anything else, and that ranch was probably going to go bad before it would be used). The problem with Centex is that they often overlook these smaller flaws, put idiots in charge that hardly can run the company themselves (thus degrading the whole operation), build stores just to give the impression that they're successful in the community, put in their own awful policies that create constant turnover, and don't know when to quit when a store is doing obviously bad because the managers really have no power within their stores anyway. Often stores are understaffed because Centex will give a bonus to managers who keep their hours down (presumably no matter how much the stores actually make).

Of course, the above is just my own experiences and I've never worked in a Subway store that was a single franchise. The above information is true as I see it, though I will ask you to take it with a grain of salt because I am somewhat bitter about the whole affair, yes.
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Re: Issues at Subway

Post by SamSpade »

The dark side of your $5 Footlong: Business owners say it could bankrupt them
http://www.latimes.com/business/la-fi-s ... story.html
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Re: Issues at Subway

Post by wnetmacman »

SamSpade wrote: December 29th, 2017, 6:06 pm The dark side of your $5 Footlong: Business owners say it could bankrupt them
http://www.latimes.com/business/la-fi-s ... story.html
Something very similar happened at Burger King during the $1.49 chicken nugget and $1.49 double cheeseburger days. They said it cost them more to make the burger than they were making off it.
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Re: Issues at Subway

Post by storewanderer »

Franchisees in California simply cannot participate in a $4.99 footlong sandwich promotion the way that a franchisee in Oklahoma can participate in such a promotion. The operating costs are just too much higher in California; it hits you from every angle; the rent, the utilities, the wages, everything just costs more. These franchisors need to make allowances for the higher cost states and unfortunately that means national promotions with specific price points become difficult. Similar to clauses in such promotions that sometimes say "excludes Alaska and Hawaii" maybe next it will say "excludes California, Seattle..." and there are probably some states back east where it also does not make financial sense. Maybe it should be the $5.99 footlong in California but in some cases that may not even be an appropriate price.

Another reason why competing on price point is a losing battle for a national chain.

There was a Subway near me that did not accept coupons, did not accept American Express, and had quite high menu prices. The location does pretty well but it still had these policies. Recently, it was sold. A few other Subways operated by the same franchisee went out of business as they did not find a buyer. The first thing the new operator did was heavily advertise they were participating in coupons and put some other price point promotion signs in the windows. Not sure if they started to accept the American Express or not. It will be interesting to see how long this all lasts.
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Re: Issues at Subway

Post by pseudo3d »

What I think will happen is that (if the economy holds up) is that a lot of Subway franchisees will break off and form a new company similar to Kaleidoscoops/Baskin-Robbins in 1999 (where terminated franchises banded together and made a new ice cream company), that is, a sandwich shop operation very similar to Subway operations-wise but free of Subway's bullshit that forces inferior ingredients and an impossible price point. I'd like to see this chain, personally, and hope they carry more unusual ingredients like garlic. :D
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Re: Issues at Subway

Post by BillyGr »

We just recently got a booklet of coupons/ad that are good thru 2/18/18.

It shows that starting January 1st they will have $4.99 footlongs, but ONLY on Black Forest Ham, Meatball Marinara and Spicy Italian.
The included coupons are good for any footlong for $5.99 and any 6" for $2.99

So it looks like they may have cut back on what they were thinking (after all, why would you issue coupons for $5.99 if you were planning to do them for $4.99 for more than just those couple options during the same time period)?

(Just FYI - this is in the Albany NY area)
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Re: Issues at Subway

Post by wnetmacman »

pseudo3d wrote: December 30th, 2017, 9:17 am What I think will happen is that (if the economy holds up) is that a lot of Subway franchisees will break off and form a new company similar to Kaleidoscoops/Baskin-Robbins in 1999 (where terminated franchises banded together and made a new ice cream company), that is, a sandwich shop operation very similar to Subway operations-wise but free of Subway's bullshit that forces inferior ingredients and an impossible price point. I'd like to see this chain, personally, and hope they carry more unusual ingredients like garlic. :D
You mean like Quiznos or Blimpie? Already we are speaking of an overcrowded market. All three have shown that it isn't a good concept. Giving the franchisees room to go rogue won't work, as the oven is owned by Subway and must be returned upon closure.
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Re: Issues at Subway

Post by pseudo3d »

wnetmacman wrote: December 30th, 2017, 11:03 am
pseudo3d wrote: December 30th, 2017, 9:17 am What I think will happen is that (if the economy holds up) is that a lot of Subway franchisees will break off and form a new company similar to Kaleidoscoops/Baskin-Robbins in 1999 (where terminated franchises banded together and made a new ice cream company), that is, a sandwich shop operation very similar to Subway operations-wise but free of Subway's bullshit that forces inferior ingredients and an impossible price point. I'd like to see this chain, personally, and hope they carry more unusual ingredients like garlic. :D
You mean like Quiznos or Blimpie? Already we are speaking of an overcrowded market. All three have shown that it isn't a good concept. Giving the franchisees room to go rogue won't work, as the oven is owned by Subway and must be returned upon closure.
The sandwich market is indeed very overcrowded, but I don't think anyone has done it quite like Subway with all ingredients in full view. I think that's one of the reasons they became so popular to begin with. (disclaimer: never been to Blimpie or Quiznos). That was also part of their downfall is that the ingredients just don't look very good a lot of the time. The disadvantage of another franchise of course is falling prey to the same mistakes Subway made to begin with.
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