The fast food chain Subway has undergone a rapid expansion: in 2007, the number of stores in the US was 21,000, eight years later, it was more than 27,000. For comparison: the competitors McDonald's and Starbucks - in the US market, after all, the number two and three by restaurant number - come to just around 14,000 each. And Subway, with more than 40,000 stores worldwide, is clearly number one.
But the development is tipped, Subway now closes in ever faster timing locations: In 2016, it went down with 359 shops less. In 2017, the number of closures was 83, 2018 it was even 1107th Officially announced in its plans, however, the group had only the cancellation of half as many fast food restaurants.
The reasons for the difficulties of the sandwich chain are closely linked to Subway's previous ascent. The boom started with the financial crisis from 2007, which plunged the US into a severe recession. Subway positioned itself at that time with cheap - and reasonably healthy - offers.
Especially popular: The offer for a nearly 30 centimeters long giant sandwich for just five dollars. At that time, the slogan "Five Dollar Footlong" burnt down into the collective memory of America - an ingenious move of marketing. At least that seemed like a long time.
"Focused too much on the number of restaurants"
Subway started to open more and more branches. These are operated - as with many fast-food groups - mostly franchisees, ie self-employed entrepreneurs, however, transfer high royalties to the parent company.
In an effort to accelerate growth, "Subway has made opening a franchise site really easy and cheap," says US radio station NPR, describing the tactics. And unlike the competition, it was not so important whether the new store was in the catchment area of an existing subway restaurant.
That takes revenge. As business gets worse, many Subway licensees are taking customers away from each other instead of competing with McDonald's and Co. In an interview, CEO Suzanne Greco recently admitted that the company has in the past focused too much on the number of restaurants, and now we focus on strengthening our market share.
Back and forth at the sandwich price
US media reports, however, Subway now resort to drastic methods to clean up the store network. Thus, an "army of lawyers" of the group would cover its own franchisees with procedures - to push them out of the market, writes the "New York Post".
The reasons for the proceedings are often small violations, writes the newspaper. Times are "stains on glass in the dining area" the trigger, sometimes Subway inspectors have something to complain about the way the vegetables are cut, the newspaper reported. Overall, the regulations fill 700 pages in a manual. "Nobody can obey that," the New York Post quotes lawyer Mark Shearer, who represents a franchise entrepreneur. We're talking about 702 arbitration cases over disputes with subway chain operators. By comparison, McDonald's only got one.
Even the bestseller - Five Dollar Footlong - has led to conflicts. The problem: The financial crisis is a long time ago, the prices of ingredients have risen massively in recent years. Subway therefore raised the price to six dollars in 2016 - but that sparked protests among customers who still had the old advertising slogan in their ear. So the group returned to the old price - and thus brought their own restaurant operators against him. They launched a petition against the offer, which brought them losses. Subway gave in - and is now looking for other ways out of the crisis.