Subway: ad spend in the U.S. 2012-2019
Subway’s sales and stores
In 2019, Subway had nearly to 23.8 thousand stores in the U.S., which generated 10 billion U.S. dollars in sales revenue that year. However, similar to its advertising investment, the sandwich chain has been experiencing a decline in both sales and number of establishments. In 2018, Subway shut down more than 1.1 thousand stores across the United States, and that is on top of the 800 closed a year earlier.Subway’s franchise system relies on the fees collected from franchisees and an eight percent cut from annual sales. The stores are owned and managed solely by the franchisees who sign a 20-year franchise agreement, which, until now, hasn’t been enforced fully. Due to internal conflicts, failed marketing, scandals around the company and its worsening reputation, many stores suffered, and operators were forced to shut down. In response, Subway instituted a new process where franchisees need to find a replacement before they are released from the contract. While this solution builds a safety net for the company, it is also said to create more difficulties for already struggling store operators and thus – a larger discord between the two parties. Therefore, the outcome of the conflict and the future of Subway stores remains uncertain.