Subway's Name Change Challenge

The Lempert Report
August 15, 2023

On today’s Bullseye – As we all know the sandwich chain Subway, with over 37,000 restaurants globally, is up for sale – and there is a lot going on there to make the sale more attractive. For good reason. The sale (or auction) has been going on since the beginning of the year and while there have been discussions – the chain is valued between $7 and 10 billion dollars according to Franchise Times, global sales is $17.5 billion a year. The problem is that the average franchise brings in just about $400,000 a year – leaving the owner with about $40-50,000 a year profit. In comparison Jersey Mikes unit sales are $1.2 million a year and Jimmy John’s is just over $900,000. So single store operators have a tough time making ends meet – which is why the chain is pushing existing franchisees to build more stores or take over other locations to create mini-chains under the brands umbrella. Since January multi-unit groups have consolidated or acquired 230 restaurants. Rottinghaus has 290 Subways, GS Dallas 145 and Marwaha Group 137.

Changes are here. More TV ads with sports celebs and naming its “Subway Series” of sandwiches, putting new slicing machines in full view and slicing their deli meats fresh in store, store remodels …and now their consumer PR campaign has kicked in. Which is a weird one – that I’m not convinced makes the chain more salable – but will certainly get some headlines. August 1st started their consumer campaign the Name Change Challenge – which lasted only 4 days – a mistake in my marketing playbook – which offered people the opportunity to legally change their first name to Subway, so for example Subway Lempert. In return one winner will enjoy free Subway sandwiches for life and the chain will pay the winner’s legal fees (up to $750) for the name change. The rules do specify that the sandwiches for life is actually gift cards worth $50,000. So let’s say you are 20 years old and will live to 80 – that equates to spending $16 a week at subway for life – the equivalent of 2 or 3 sandwiches depending if you order footlongs or half sandwiches every week. And then there is the tax implications that may cut the $50k down to maybe just one or two sandwiches depending on your tax bracket. Obviously there is a “conduct” clause in the rules – remember Jared? The winner has not been named yet and the company says it will announce the winner before the end of August. The rules do not stipulate that the winner can’t change their name back. Hmmmmm. This is yet another one of those consumer PR campaigns that in my book is a ho-hum and won’t increase the sales they need to push their sale.

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