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May 28, 2020

Take five?: Subway ponders return of $5 footlong promotion

PHOTO | New Haven BIZ

In the long-ago dark days of 2007, fast-food franchise giant Subway launched perhaps its most successful promotion ever — the $5 footlong sub.

The promotion was the brainchild of franchisee Stuart Frankel, who had been looking for a gimmick to goose flagging weekend sales at his two Miami, Fla. Subway stores. Frankel reasoned that he might sell more footlong sandwiches if he priced them at a lean, mean $5, because — hey, we simple souls are drawn to round numbers. (He actually priced them at $4.67 so that, including Florida sales tax, it came to exactly five bucks “out the door.”)

Boosted by a relentless national advertising campaign featuring the ubiquitous five outstretched fingers, the promotion soldiered on until 2018, when escalating food costs and increasing mandatory labor costs made the $5 price point unsustainable in most U.S. markets.

Now the $5 footlong is back — maybe. According to published reports the Milford-headquartered Subway International wants to resurrect the $5 footlong promotion on June 9, continuing it through the summer months.

However, many franchisees are not happy about the plan. In a letter reportedly sent last week, the company’s franchisee association urged store owners and operators not to go along with the program unless it is strictly tied to ordering through the company’s mobile app.

“The $5 Footlong was abandoned years ago after countless attempts to make it profitable for the restaurant,” the North American Association of Subway Franchisees (NAASF) wrote in a letter to its members last week as reported in the trade magazine Restaurant Business. “Not since the first iteration of this campaign did the increase in sales from traffic offset the cost of the trade-down.”

In its letter, the association said it will not support any $5 Footlong offer that is available to customers who walk in the door or is not tied to a value bundle with chips and drink. “We have yet to receive a comprehensive or credible business case to support this deep discount offer,” the association wrote, according to Restaurant Business.

Subway has been facing significant industry headwinds even before the onset of the global coronavirus pandemic that has decimated the restaurant industry, although the fast-food sector has been hit less hard than sitdown eateries.

Thousands of Subway stores have closed in recent years, including nearly 1,000 last year. Also last year the company hired John Chidsey as its  new CEO. Subway laid off 300 workers in February, and another 150 this month, and has also overhauled its executive team. 

Queries to Subway’s world headquarters in Milford about both the reintroduction of the $5 footlong promotion and franchisee reaction to it were not returned at press time.


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