July 15, 2019

Subway’s Remodeling Program Aims to Restore Sandwich Dominance

Franchise Pumps $100 Million Into Remodeling Locations

Subway has been taking it on the chin in the fight to capture consumers with a hankering for a sandwich.

Jersey Mike’s Subs, Jimmy John’s Gourmet Sandwiches, Firehouse Subs and a host of others have knocked the onetime king of franchises far off its perch.

To regain its stature, the Milford, Connecticut-based company has launched a grant program to pump about $100 million into remodeling close to half the chain’s nearly 25,000 U.S. locations. This follows Subway’s announcement last year to invest $80 million in emphasizing new flavors and creating a more personalized customer experience.

Each franchise owner can get a grant that covers 25% of the redesign cost. The goal is to spruce up locations to entice more consumers and reverse flagging sales.

“By participating in the remodel program, franchise owners are making a commitment to enhancing their guests’ experience, and showing their trust in the brand,” Don Fertman, Subway’s chief development officer, said in a statement.

Landlords certainly will like seeing the changes.

“From an existing landlord standpoint, any time a tenant updates their space it is viewed positively,” said Brian Forrester, a retail broker with Colliers International.

A new, fresh look will help franchisees compete with other chains for retail space, Forrester said.

Subway has struggled over the past several years. Restaurant Business Reported the chain’s sales decreased 3.6% to $10.5 billion last year, citing research firm Technomic’s Top 500 Chain Restaurant Report

The chain’s number of locations has declined from more than 27,000 four years ago to 25,000. That has pushed the chain down the rankings of Entrepreneur’s Franchise 500. Subway now ranks No. 125 after appearing in the top five 14 times between 2001 and 2018.