Subway has ignored 'screams for help' from shop owners and risks being 'gobbled up' by this fast-growing rival

Published

7 months ago

December 2, 2024

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Subway has ignored “screams for help” from its struggling franchisees for years — and is now at risk of being “gobbled up” by a fast-growing rival, a lawyer representing thousands of sub shop owners warned.

Subway last week said CEO John Chidsey will “retire” at the end of the year — five years after he became the first executive outside the founding family to lead the chain. That’s despite the fact that Chidsey had said he planned to stay after the company was sold in May for $9.5 billion to Roark Capital.

As Subway announced the CEO exit, it also revealed it was scrapping its $6.99 footlong deal a month early after admitting to franchisees the deal is not driving anticipated results, Restaurant Business Magazine reported.

Subway’s downbeat headlines came in stark contrast to recent news from a much smaller competitor, Jersey Mike’s. The latter now operates just 3,000 US locations versus Subway’s 20,000 — yet sold itself to buyout firm Blackstone Group for $8 billion, not far off what Subway fetched six months earlier.

Subway’s $6.99 footlong promotion was the latest in a series of punishing moves under Chidsey for Subway franchisees, who are forced to pay an 8% royalty fee on gross revenue regardless of their profitability.

Chidsey has likewise forced franchisees to remodel restaurants despite uncertainty on returns and pay undisclosed technology fees, according to Robert Zarco, who provides counsel for the North American Association of Subway Franchisees, which represents about half of Subway’s 20,000 US restaurants.

If Subway keeps treating its franchisees the way it has over the last five years where it is ignoring their screams for help, Jersey Mikes will have an easy task of gobbling up the Subway brand,” Zarco told The Post.

I hope its the reason for the change because it should have been,” Zarco added, referring to Chidsey’s exit. Because of the tensions that are prevalent, it is a good move for Roark to come in and wipe the slate clean and establish a better working relationship with the franchisees.”

Chidsey had not made any notable overtures to NAASF, Zarco said.

Roark — which owns dozens of major fast-food chains including Dunkin’, Arby’s, Sonic, Baskin-Robbins and Buffalo Wild Wings — didn’t respond to requests for comment.

At a hastily assembled meeting in August, Subway President Douglas Fry admitted that sales were down 5% to 10% year-to-date in many regions. Meanwhile, he estimated that Jersey Mike’s same-store sales, or sales at stores open at least a year, had risen 1%, sources told The Post.

Were doing worse than the rest of the industry, Fry admitted at the time, according to the sources.

But the $6.99 footlong deal prescribed by CEO Chidsey — a former Burger King CEO — only made things worse, according to franchisees.

This is the first time I havent honored a promotion, a franchisee with more than 10 Subway restaurants in the US Northeast told The Post.

That store owner was one of the lucky ones: While most Subway franchisees who signed contracts before 2021 can opt out of promotions, newer franchisees were forced into the money-losing deal.

The last 20 days have been kind of hellish, a Subway employee wrote Wednesday on Reddit about the value meal. It might have gone better if the higher-ups actually worked in the store and saw why the owners didnt want it to be for any sub.

The franchisee griped that under the promotion, a single customer could order four Monster Subs, which have steak, pepper, cheese and onion, for less than $30. As a result, the $6.99 footlong deal failed to improve his gross sales, even as his costs skyrocketed.

Subway is making Carrie Walsh, President of its Europe, Middle East and Asian regions, its interim CEO. Zarco said she is liked by some of the Subway franchisees who know her.

Subway has shrunk by 15% over the past four years, from 23,799 US restaurants on Jan. 1, 2020 — shortly after Chidsey took the helm — to 20,133 on Jan. 1, 2024, according to public filings. The chain is believed to have gotten a bit smaller this year, sources said.

Meanwhile, the average Jersey Mikes, whose CEO Peter Cancro has become a billionaire off the Blackstone deal, makes about three times as much money as the average Subway, according to public filings.

Blackstone buying Jersey Mikes tells me its time for me to run, the Northeast-based Subway franchisee with more than 10 restaurants said, adding that he could easily see Jersey Mikes more than doubling in size soon to 8,000 US restaurants.

Blackstone Senior Managing Director Peter Wallace on Nov. 19 said his firm had deep experience helping accelerate the expansion of high-growth franchise businesses like Jersey Mikes.

Sports

Schmidt’s 7 hitless innings help Yanks blank O’s

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3 hours ago

June 21, 2025

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Schmidt's 7 hitless innings help Yanks blank O's

Associated Press

Jun 21, 2025, 04:30 PM ET

NEW YORK — Clarke Schmidt pitched seven hitless innings and the New York Yankees held the Baltimore Orioles to one hit in a 9-0 rout on Saturday.

JT Brubaker gave up a single to Gary Sánchez to open the eighth for the Orioles’ only hit.

Schmidt (4-3) was bidding to throw New York’s first no-hitter since Domingo German threw the Yankees’ major league-leading fourth perfect game on June 28, 2023. The Yankees had not thrown a no-hitter at home since David Cone’s perfect game on July 18, 1999, against the Montreal Expos.

Baltimore was nearly no-hit for the first time since Aug. 12, 2015, in Seattle by Hisashi Iwakuma.

Schmidt struck out five and issued both walks in the first inning when he threw 27 pitches. The right-hander threw first pitch strikes to 16 of 24 hitters and exited after tying his career high of 103 pitches.

After consecutive walks to Jordan Westburg and Gunnar Henderson, Schmidt struck out Ryan O’Hearn and retired Ramon Laureano to end the first. He permitted one other runner the rest of the way.

Schmidt exited after throwing 21 pitches in the seventh. Brubaker allowed a two-strike single to Sánchez and some in the crowd of 46,142 lightly booed.

Brubaker pitched the final two innings to finish New York’s second one-hitter this season.

Trent Grisham, JC Escarra, Ben Rice and Anthony Volpe hit solo homers as the Yankees finished with 14 hits and won for the second time in nine games.

Volpe finished with three hits after going hitless in his previous 25 at-bats, raising his average eight points to .236. It was the shortstop’s third three-hit game this season and first since May 24 in Colorado.

Baltimore’s Zach Eflin (6-4) allowed six runs and 10 hits in three innings.

Sports

Red Sox shut down Crawford due to wrist injury

Published

3 hours ago

June 21, 2025

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Red Sox shut down Crawford due to wrist injury

Jesse RogersJun 21, 2025, 03:45 PM ET
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SAN FRANCISCO — The Boston Red Sox are pausing pitcher Kutter Crawford‘s rehab due to a wrist injury, according to manager Alex Cora.

Crawford, 29, hasn’t pitched in a game this season due to knee and wrist issues. He threw his second bullpen session of the week Friday in the hopes of progressing to a rehab assignment but suffered a setback with the wrist.

The right-hander is set to fly to Boston for further testing in the coming days.

“He wasn’t able to generate velocity,” Cora said Saturday morning. “That’s a concern.”

Crawford made a league-high 33 starts last season, compiling 183⅔ innings, but a lingering knee issue prevented him from starting the year healthy. That was followed by wrist pain, leading to him being shut down.

“We’ll know more next week,” Cora said.

Meanwhile, newly acquired pitcher Jordan Hicks (toe) will begin a rehab assignment with Triple-A Worcester on Sunday, and third baseman Alex Bregman (quad) is also progressing.

“[Saturday] was a big day for him,” Cora said.

Cora indicated Bregman tends to say he’s further along than might be true, so the team will confer with doctors while also listening to the player in terms of when he’s ready to return.

“We always compare him to Dustin [Pedroia],” Cora said with a smile. “If Dustin said 80%, I’d say it was 65%. “But he’s [Bregman] feeling better. He’s excited about everything going on here. Just eager to come back.”

Sports

Braves place P Sale on IL with fractured rib cage

Published

3 hours ago

June 21, 2025

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$Braves place P Sale on IL with fractured rib cage$

ESPN News Services

Jun 21, 2025, 03:33 PM ET

MIAMI — The Atlanta Braves placed reigning NL Cy Young Award winner Chris Sale on the 15-day injured list Saturday because of a fractured left rib cage.

“He was doing his exercises [Friday] and felt like something wasn’t right,” manager Brian Snitker said before the Braves’ 7-0 win Saturday against the Miami Marlins. “So they had him looked at, and it showed what it showed.”

In his previous start, against the New York Mets on Wednesday, Sale sprinted off the mound and made a diving stop of a grounder hit by Juan Soto and threw him out for the first out in the ninth. He then struck out Pete Alonso and was lifted after allowing a single to Brandon Nimmo.

“It’s just a freak thing. An unfortunate thing,” Snitker said. “I saw him after the game that night and he was doing his postgame workout. And then I saw him the next day and I think he maybe felt a little uncomfortable the next day. But then [Friday] is when he wanted to get it checked out.”

Sale is 5-4 and has a 2.52 ERA through 15 starts this season. The 36-year-old left-hander threw a season-high 116 pitches in 8⅔ innings against the Mets.

“It’s a tough blow for us and him,” Snitker said. “It was going so good. That’s a rough one.”

After six seasons with the Boston Red Sox, Sale was traded to the Braves in December 2023. Sale won the pitching Triple Crown in his first season in Atlanta, finishing with an NL high in wins (18) and strikeouts (225) and a league-low ERA of 2.38.

Snitker doesn’t have a timeline for when his star pitcher will return.

“With bones like that, they’ve got to heal before you can start the process, but I have no idea how long it will be,” he said.

The Braves are 35-40 and 10.5 games behind NL East-leading Philadelphia. They’ve won seven of eight, including a three-game series sweep against the Mets earlier this week.

In the corresponding move retroactive to Thursday, the Braves recalled left-handed pitcher Austin Cox from Triple-A Gwinnett.

Information from The Associated Press was used in this report.