Subway marketing boss resigns amid franchisee revolt

Irate Subway franchises have won their first scalp.

The sandwich shop’s head of marketing resigned on Monday days after The Post reported the country’s largest restaurant chain planned to revive next month a $4.99 footlong promotion.

The promotion sparked a nationwide revolt by the franchisee owners of Subway’s 40,000 units. The owners, mostly small business operations, have been hurting financially the last few years by a one-two punch of a 25 percent drop in traffic coupled with heavy discounting — which ate into profits.

When The Post reported exclusively that the company’s turnaround plan included a $4.99 footlong, it was more than the franchisees could handle.

Dozens of franchisees added their names to an existing petition asking for the upcoming January promotion to be dropped.

But on Monday, it was Karlin Linhardt who was dropped, The Post has learned.

“Most franchisees are not fans of Karlin,” a franchisee organizer told The Post.

The Milford, Conn., company confirmed that Linhardt and Subway have parted company.

“Karlin Linhardt is no longer at the company as of today,” a person answering the phone at Subway HQ said.

In April, Subway hired Linhardt to head all its North American marketing in an effort to revamp America’s biggest restaurant chain.

Linhardt had oversight of the marketing teams, advertising and media planning, and is believed to be the architect of next month’s scheduled $4.99 foot-long sub promotion that prompted a franchisee revolt, sources said.

Perhaps, half of Subway’s 40,000 stores presently are losing money, the franchisee organizer told The Post.

Subway was holding regional meetings this month with franchisees trying to get them to support the promotion that would further shave their already thin profits.

Almost all Subway restaurants are franchised, and in some regions franchisees will lose money if they sell subs for only $4.99, sources said.

The parent company, meanwhile, is concerned consumers no longer see its sandwiches as a bargain versus its key competitor, McDonald’s.

From 1995-to-2005 Linhardt had been a McDonald’s senior vice president, and McDonald’s in recent years has gained market share from Subway by dropping prices and introducing a dollar menu.

When hiring Linhardt in April, Subway promoted it as a major move to reposition the brand. The chain had gone through several public relations disasters including spokesman Jared Fogle in 2015 being sentenced to 15 years in prison for sex crimes with underage girls.

Subway has hired few executives from outside the organization, and when adding Linhardt it was seen by some as an attempt to professionalize the organization.

Fred DeLuca who ran Subway since its 1965 founding soon before his 2015 death named his sister Suzanne Greco as his replacement.

Source: https://nypost.com/2017/12/18/subway-axes-marketing-boss-amid-franchisee-revolt/

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