User:PHSubway/Subway draft

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Subway IP LLC
Subway
FormerlyPete's Super Submarines
(1965–1968)

Pete's Subs
(1968–1970)

Pete's Subway
(1970–1972)
Company typePrivate
IndustryRestaurants
GenreFast-food restaurant
FoundedAugust 28, 1965; 58 years ago (1965-08-28) in Bridgeport, Connecticut, U.S.
Founders
Headquarters
Milford, Connecticut
,
U.S.[2]
Number of locations
37,000 (June 2021)[3]
Area served
Worldwide (100+ countries)
Key people
John Chidsey (president & CEO)[4]
Products
RevenueDecrease US$16.1 billion (2019)[5]
US$10.2 billion (U.S.)[6]
OwnerRoark Capital Group (pending)
Number of employees
410,000, including franchises (2022)[7]
Websitesubway.com

Subway IP LLC,[8] doing business as Subway, is an American multinational fast food restaurant franchise that specializes in submarine sandwiches (subs), wraps, salads, cookies and drinks. Subway was founded by Fred DeLuca and financed by Peter Buck in 1965 as Pete's Super Submarines[9] in Bridgeport, Connecticut. After several name changes in the beginning years, it was finally renamed Subway in 1972, and a franchise operation began in 1974 with a second restaurant in Wallingford, Connecticut.[10] Since then it has expanded to become a global franchise.

Subway offers signature sandwiches, wraps and salads as well as customizable options with a variety of toppingsfor the customer to include in their sandwich. The longtime Subway slogan, "Eat Fresh", is intended to indicate the fresh ingredients that are used in their sandwiches. It was the fastest-growing franchise in the world in 2015[11] and, as of May 2023, had approximately 37,000[12] locations in more than 100 countries and territories. Subway had 20,576 shops in the United States, as of 2022.[12]It also is the largest single-brand restaurant chain, and the largest restaurant operator in the world.[13][14][15][16] Its dual international headquarters are in Milford, Connecticut and Miami, Florida.[17] In 2023, Subway announced that it had entered into a definitive agreement to be acquired by Roark Capital.[18]


History[edit]

Logo used from 1973–2002 (still used at some locations in northern Canada)
Logo used from 2002–2015 (still used as signage in most locations)
Logo used from 2015–2016 (mostly only used in advertisements)

In 1965, Fred DeLuca borrowed $1,000 from friend Peter Buck to start "Pete's Drive-In: Super Submarines" at 3851 Main Street[19] in Bridgeport, Connecticut, and in the following year, they formed Doctor's Associates Inc. to oversee operations of the restaurants as they expanded.[20][21] The holding company derives its name from DeLuca's original goal in starting a buisness: to earn enough from the business to pay tuition for medical school, as well as Buck's having a doctorate in physics.[22] In 1968, the sandwich shop was renamed "Subway".[20] In 1974, a franchise operation began with a restaurant in Wallingford, Connecticut.[10]

Subway restaurant in Pittsfield Township, Michigan (2011)

The first Subway on the West Coast was opened in Fresno, California, in 1978.[20] By 1981, Subway development picked up with the brand’s 200th restaurant opening, reaching 300 just a year later. The first Subway outside of North America opened in Bahrain in December 1984.[23] In 1987, Subway reached 1,000 restaurants open and by 1995, it opened 10,000 restaurants.[24][25] The first Subway in the United Kingdom was opened in Brighton in 1996.[26] In 2004 Subway began opening stores in Walmart supercenters, and surpassed the number of McDonald's locations inside U.S. Walmart stores in 2007.[27] Since 2007, Subway has consistently ranked in the Entrepreneur Franchise 500. In 2015, it ranked No. 3 on the "Top Global Franchises" list, and #1 as the "Fastest Growing Franchise".[28][29] At the end of 2010, Subway became the largest fast food chain worldwide, with 33,749 restaurants – 1,012 more than McDonald's.[30]

Subway restaurant in Stanhope, New Jersey (2018)

Fred DeLuca, the company's first CEO, died of leukemia in September 2015 after being ill for two years. In January 2015, his sister Suzanne Greco became president and CEO.[31][32] In the U.S., Subway reached a peak of 27,129 locations on January 1, 2016, but has since shrunk year after year, declining 22 percent by the end of 2021.[33] In 2016, Subway closed hundreds of restaurants in the U.S., experiencing a net loss in locations for the first time. However, with 26,744 locations, it remained the most ubiquitous restaurant chain in the U.S. (with McDonald's in the #2 spot).[34]

Interior of a Subway franchise in Huntington, Virginia designed in the new style

In July 2017, Subway unveiled redesigned restaurants, dubbed "Fresh Forward",[35] with new company branding.[36] Features include self-order kiosks; USB charging ports at tables; and new menu items.

A Subway outlet in Kajang, Malaysia, located next to Domino's Pizza

In 2017, the chain closed more than 800 of its U.S. locations. In April 2018, the chain announced it would close about 500 more that year. According to Abha Bhattarai of The Washington Post, this was a result of three consecutive years of falling profits and a 25 percent reduction in foot traffic in Subway stores since 2012. Franchisees also complained that the company's deep promotions further ate away at profits. In January 2018, Subway invested $25 million in a re-branding campaign targeting young consumers to revitalize its image and boost sales.[21]

In 2019, John Chidsey joined Subway as the company’s first CEO who’s not a founding family member. He focused on improving established U.S. locations rather than building new restaurants.[37]

The company closed 999 more US Subway locations than it opened in 2019, a further 1,609 net in 2020 (in substantial part due to the COVID-19 pandemic in the United States, and a net 1,043 outlets in 2021, leaving it with 21,147 locations.[33]

In 2021, Subway began its transformation journey with the launch of the “Eat Fresh Refresh” campaign.[38] In 2022, the second phase of Subway’s refresh introduced the Subway Series, a line-up of new signature sandwiches.[39] In 2023, the third phase introduced freshly sliced meats to all U.S. restaurants and Deli Hero subs to its Subway Series menu. [40]

In 2023,Subway announced that they were in the process of selling the company to private ownership. The company enlisted the help of JP Morgan with the sale. The price of the company was reported to be around $10 billion.[41][42] Several potential buyers made offers for the company.[43] These included the asset management division of investment bank Goldman Sachs, TDR Capital, and TPG Inc.[43] On August 24, Subway announced that it had entered into a definitive agreement with Roark Capital for a reported $9.6 billion.[44]

Operations[edit]

Business model[edit]

Subway restaurants are independently owned and operated by a network of franchisees. This began when founder Fred DeLuca began franchising the brand in 1974. By 1975, Subway had become a regional fast-food chain and by 1984, it had international operations.[45] Subway is considered to have had some of the lowest franchise costs in the industry, as of 2022. All of the company's U.S. locations are franchise-owned.[45] The estimated total cost for a franchisee includes a $15,000 fee to open the Subway business and an additional $222,050 to $506,900 in startup costs, as of 2023. Subway additionally charges a royalty fee of 8% and advertising fees of 4.5%.[46]

Corporate structure[edit]

Subway has been owned by its founding families for the last six decades. In August 2023, Subway announced that it would be acquired by Roark capital.[47] In 2019, John Chidsey joined Subway as the first chief executive officer outside of the DeLuca family.[37] Subway's global dual headquarters are located in Milford, Connecticut and Miami, Florida, in the US, with five regional centers supporting the company's international operations.[17] The regional offices for European operations are located in Amsterdam (Netherlands); the Australian and New Zealand operations are supported from Brisbane (Australia); the Asia Pacific operations are supported from offices in Beirut (Lebanon) and Singapore; and the Latin American office is in Miami (US).[48] As of 2017, the Subway Group of companies was organized as follows:

  • Subway IP Inc. is the owner of the intellectual property for the restaurant system.
  • Franchise World Headquarters, LLC leads franchising operations. FWH Technologies, LLC owns and licenses Subway's point of sale software.
  • Franchisors include Doctor's Associates Inc. in the U.S.; Subway International B.V.; Subway Franchise Systems of Canada, Ltd.
  • Advertising affiliates include Subway Franchisee Advertising Fund Trust, Ltd.; Subway Franchisee Advertising Fund Trust, B.V.; Subway Franchisee Canadian Advertising Trust.[49][50]
  • IPC Europe (Independent Purchasing Company Europe Limited), manager of the Subway franchisees and the Subcard loyalty scheme in European countries.[51][52]
  • IPC (Independent Purchasing Cooperative) in the United States, Canada, Puerto Rico and U.S. Virgin Islands.[53]

Restaurants and digital[edit]

Distribution of Subway restaurants around the world
  1000 and more
  100 to 999
  10 to 99
  1 to 9
  0
A Subway restaurant located in Washington, D.C.

As of February 2023, Subway had approximately 37,000 locations in more than 100 countries, all independently owned and operated by a network of franchisees.[54] Subway has the highest concentration of locations in North America with more than 20,000 in the United States, 2,881 in Canada, and 758 in Mexico, as of 2019.[55][54] This was almost as many U.S. locations as McDonald's and Starbucks combined, as of 2018.[21] Outside North America, the countries with the most locations are Australia (1,215), Brazil (1,643), and the United Kingdom (2,195), as of 2019.[55] In 2021, a private equity company called Everstone Group acquired the master franchise rights of Subway for India, Sri Lanka, and Bangladesh. At the time, Subway already had approximately 700 locations in India and proposed adding 2,000 additional locations by 2031.[56] Subway has signed master franchise agreements across Europe, Middle East and Africa, Latin America and Caribbean and Asia Pacific.[57] Since 2021, Subway has signed 15 deals with international master franchises, which would add more than 9,000 restaurants.[47]

During the coronavirus pandemic, Subway first introduced curbside pickup, inside pickup and delivery.[58] Subway saw an increase in digital sales in 2021 and Subway announced that it would improve its mobile-ordering technology. This includes both the Subway app and third party delivery.[59] Subway's digital sales have more than tripled since 2019.[60] Subway has non-traditional locations, such as airports, truck stop plazas, college campuses and hospitals.[61] In 2022, Subway announced its “smart fridge” that has pre-made sandwiches, snacks and drinks.[62] The fridges use artificial intelligence and language processing where customers can speak to the device and ask questions. Weight-sensor shelves are used for contactless and cashless transactions.[61] The company first started selling pre-made sandwiches in standard grab-and-go refrigerators in 2020 at retail locations such as casinos, gas stations and airports.[62]

Products[edit]

A Subway Club 6" sandwich

Subway's core product is the submarine sandwich (or "sub"). In addition to these, the chain also sells wraps, salads, melts, and cookies. The company also sells breakfast sandwiches and flatbread. In 2006, "personal pizzas" debuted in some US markets. These are made to order (like the subs) and heated for 85 seconds. Breakfast and pizza items are only available in select locations. In November 2009, Subway signed a deal to serve exclusively Seattle's Best Coffee coffee as part of its breakfast menu in the US.[63]

A 2009 Zagat survey named Subway the best provider of "Healthy Options" (in the "Mega Chain" category). Subway was also first in "Top Service" and "Most Popular" rankings. It placed second in "Top Overall", behind Wendy's.[64]

In 2021, Subway began its Eat Fresh Refresh campaign, introducing more than 20 menu updates.[65] Since then, Subway introduced signature sandwiches to its menu, including a line-up of sandwiches called "The Vault", available to order on Subway's site and app. National Football League athletes Russell Wilson, Marshawn Lynch and Trevor Lawrence partnered with Subway to create their own new subs added to the menu.[66]

In 2022, Subway introduced the Subway Series, which reports called "its most extensive makeover in the company’s nearly 60-year history".[40] This new menu has 12 sandwiches that customers can order as is without customization, though they can still make substitutions.[67] In 2023, Subway added a new category to the Subway Series called Deli Heroes, including four new sandwiches with more meat and double cheese.[68][69]

In 2023, Subway introduced freshly sliced meats in U.S. restaurant locations. It invested more than $80 million to install deli meat slicers to over 20,000 restaurants nationwide.[68][69]


Regional variations[edit]

Subway's menu can vary between countries, with each regional menu reflecting the local culture. Local Subway franchises have also offered menu items to meet specific religious requirements.

In 2006, the first kosher Subway restaurant in the United States opened in a suburb of Cleveland, Ohio in the Mandel Jewish Community Center of Cleveland. At their peak, twelve kosher Subway locations were open in the U.S. and as of 2011, only five remained.[70] Subway opened its first restaurant in India in 2001 in New Delhi. In deference to Hindu beliefs, Subway restaurants in India do not serve beef products.

International locations have different menu options, such as Shrimp and Avocado in Japan,[71] the Aloo Patty sub in India or the Piri-Piri Chicken sub in South Africa.[72] On September 4, 2012, Subway opened its first all-vegetarian outlet on the campus of Lovely Professional University (LPU) in Jalandhar, Punjab.[73] On March 6, 2013, Subway opened its second all-vegetarian outlet also offering Jain food in Paldi, Ahmedabad.[74] In the United Kingdom and Ireland in 2011, Subway has reduced salt content across its entire range by 33% and has committed to further reductions, in line with government targets,[75] and the company's range of "Low Fat" subs is endorsed by the charity Heart Research UK.[76]

Marketing and advertising[edit]

Subway in Belo Horizonte, Brazil, in 2009
Subway's the "restaurant world" in the REDI shopping mall in Kalasatama, Helsinki, Finland

Subway is the second-biggest fast food advertiser in the United States, behind only McDonald's. It spent US$516,000,000 on measurable advertising in 2011.[77]

Subway used the advertising slogan "Eat Fresh" and focused on how its sandwiches were made from freshly baked bread and fresh ingredients, in front of customers to their exact specifications, by employees which Subway called "Subway Sandwich Artists"[78]

In 2005, Subway scrapped its "Sub Club" stamp promotion, citing a growing number of counterfeit stamps due to online auction sites and the increasing availability of high-quality printers.[79][80]

In November 2007, Subway's US commercials featured the cartoon character Peter Griffin (from FOX's Family Guy) promoting its new Subway Feast sandwich.[81]

The brand also ran product placements, including in the US TV series Chuck since its first season.[82]

To celebrate National Sandwich Day on November 3, 2015, Subway offered a Buy One sandwich, Give One sandwich free promotion.[83]

Subway has sponsored a number of sports events, particularly NASCAR races, including the Subway 400 (2002–2004),[84] Subway 500 (2003–2007),[85] Subway Fresh 500 (2005–2013)[86] and the Subway Firecracker 250 (2009–2016).[87] Subway sponsored the Subway Super Series ice hockey tournament from 2009 to 2014.[88]

In December 2020, Subway partnered with ezCater to offer a new online catering platform.[89] In September 2022, Subway secured a three-year partnership deal with Football Australia for the naming rights of the men's national football teams as the Subway Socceroos, Subway Olyroos, Subway Young Socceroos, and Subway Joeys. The deal also includes Subway becoming the official partner of the Matildas and the Australia Cup.[90]

Jared Fogle[edit]

Jared Fogle in 2007

Beginning in January 2000, Jared Fogle was a national spokesman for the company in the US, giving talks on healthy living and appearing in advertisements. Fogle first came to attention in his native Indiana by claiming that he lost over 200 pounds in part by eating at Subway. After 2008, he was featured less often as the company marketed with more emphasis on its "5 dollar footlong" campaign.[91] Subway attributed between one-third and one-half of its growth from 1998 to 2011 to Fogle, the equivalent of a tripling in size.[92] Subway ended its relationship with Fogle in 2015 after he was charged with possession of child pornography and illicit sexual conduct with a minor. After pleading guilty in August 2015, he was sentenced to more than 15 years in federal prison three months later.[93][94][95]

In December 2015, following the removal of Fogle from its marketing, Subway introduced a new marketing campaign, "Founded on Fresh". The campaign focuses on Subway's establishment and early history and features Fred DeLuca, as played by his son, Jonathan. The new campaign downplays the use of jingles and celebrity endorsements (besides "targeted" sports marketing) in favor of focusing on the qualities of its products and specific products. Chief advertising officer Chris Carroll explained that the focus on fat, calories, and weight loss were "what fresh used to be" and that the new campaign would focus more on the sourcing of Subway's ingredients, such as its phase-out of antibiotic-treated meat. Carroll also explained that the new strategy was being developed prior to the controversy involving Fogle.[96]

$5 footlongs[edit]

In 2008, Subway began to offer all foot-long submarine sandwiches (excluding the premium and double-meat varieties) for five dollars, in the continental United States and Canada, as a "limited time only" promotion. "Five Dollar Footlongs" quickly became the company's most successful promotion as of 2010.[97] Upon the initial promotion's completion, customer response prompted Subway to create a permanent "$5 Footlong Everyday Value Menu" that offered some footlong sandwiches for $5. In October 2011, a similar promotion was launched in the United Kingdom. Customers can buy one of nine subs and any drink for £3 (for a six-inch sub) or £5 (for a footlong).[98]

In 2012, San Francisco restaurants discontinued the five-dollar footlong promotion due to the higher cost of doing business in the city.[99] From June 2014 to the end of that year, some Subway locations began discontinuing the $5 dollar promotion.[100] On November 1, 2014, Subway replaced the five-dollar footlong promotion,with the Simple $6 Menu which included a six-inch sandwich with a drink and a choice of cookies or chips.[101][102]

In February 2016, the company announced that all classic footlongs would be priced at $6 each.[103] In January 2018, the $5 promotion returned with a $4.99 footlong menu of five subs at participating locations.[104][105][106] In September 2018, Subway discontinued the $5 footlong promotion in order to boost franchisee profits.[107]

"Eat Fresh Refresh" campaign[edit]

In July 2021, Subway debuted its "Refresh" campaign featuring: Tom Brady, Stephen Curry, Serena Williams, and Megan Rapinoe.[108] Subway franchisees requested Rapinoe be pulled from the ads following the 2020 Olympics, claiming her testimonial caused sales to dip and harmed the stores' reputation.[109]

In July 2022, the campaign featured Charles Barkley and other athletes to introduce the new Subway Series menu including: Tom Brady, Steph Curry and Serena Williams.[110]

In 2023, Subway introduced freshly sliced meats and new Deli Heroes with new advertising featuring Steph Curry, Rafael Nadal and Jayson Tatum.

Community involvement[edit]

The Subway Cares Foundation is a non-profit organization that allocates grants to groups that provide youth access to nutritious food and tuition assistance.[111] In 2022, a promotional campaign launched through this foundation for a footlong cookie for "National Cookie Day".[111]

Subway and its franchisees support food security through various initiatives.[112] These donations include local food banks and charity organizations.[113][114] Local relief continued during the COVID-19 pandemic as communities faced food insecurity.[115][116] In 2023, Subway had its fifth annual "Never Miss Lunch" donation day. This is a Canadian program that partners with Food Banks Canada to send children food. In 2022, the program delivered 175,000 packs.[117]

Subway has supported Feeding America's in a National Sandwich Day food drive and in 2016, Sandwich Day was determined to be the single largest meal donation day in Feeding America's history because of a pledge of 11 million meals that year.[112] In 2020, as a part of COVID-19 pandemic relief, Subway said it would donate up to $1.5 million for those facing food insecurity, equivalent to 15 million meals, through the partnership to at least 200 Feeding America food banks across the United States.[118][119]

The Subway Fresh Start Scholarship awards funds to student employees from the U.S., Canada, Puerto Rico and Australia.[120][121]

Animal welfare[edit]

In December 2015, Subway released a commitment to move to a 100% cage-free egg supply chain in North America by 2025.[122]

In April 2017, Subway released a chicken welfare policy[123] that states that by 2024 or sooner, 100% of its U.S. chicken products will be produced in alignment with Global Animal Partnership (GAP) standards for higher welfare breeds, enhanced living environments (including lighting, litter, and enrichment), increased activity levels and optimized stocking density, and improved slaughter methods. To ensure compliance, Subway's chicken suppliers will be third-party audited with updates communicated annually.[124]

The policy announcement followed a nationwide campaign led by high school animal activist Lia Hyman in coordination with the animal protection NGO The Humane League.[125] On April 20, 2017, Hyman and a group of activists traveled to Subway's global headquarters in Connecticut to deliver more than 53,000 signatures from campaign supporters and held a demonstration outside the building after they were denied entry.[126]

Legal cases[edit]

In September 1999, at least 32 customers in Seattle contracted hepatitis A after eating food contaminated with the virus at two Subway locations.[127] Subsequent investigations found that staff failed to adhere to thorough hand washing and the use of plastic gloves during food preparation.[128] A class-action lawsuit on behalf of 31 victims was resolved for $1.6 million.[129][130] The most seriously affected victim—a 6-year-old boy—suffered acute liver failure and required a liver transplant. He was awarded $10 million in an out-of-court settlement in 2001.[128] A previous outbreak of hepatitis A in 1996 had also involved a Subway location in Seattle, although no legal action had resulted.[127]

On February 2, 2007, KNXV-TV (with the help of the Arizona Department of Weights and Measures) reported that three of Subway's "Giant Sub" sandwiches, nominally each 3-foot (91 cm) long, were actually 2 feet 8 inches (81 cm), 2 feet 8.25 inches (81.92 cm), and 2 feet 8.5 inches (82.6 cm) long. The maximum variance in length allowed in Arizona is 3% (1.08 inches (2.7 cm), for a three-foot sub). The report also showed the boxes designed to store these sandwiches were 2 feet 10.75 inches (88.27 cm) in length; shorter than the maximum allowable variance. In response to the report, Subway said it was reevaluating its advertising, training, and packaging materials with regard to the specific or implied length of Giant Subs and was advising its franchisees to only discuss with customers the approximate number of expected servings and not a specific length of measurement.[131]

In January 2013, an Australian teen, Matt Corby, complained on Facebook that Subway's "footlong" sandwich was only 11 inches (28 cm) long, rather than 1 foot (30 cm). Based on Corby's complaint, several people in the United States filed lawsuits against Subway, which were later combined into a class action. After initially reaching a settlement, an appeals court judge dismissed the lawsuit in 2017 for being "utterly worthless" to consumers.[132]

The U.S. House of Representatives' small business committee studied the franchise industry from 1992 to 1998. Dean Sagar noted, "Subway is the biggest problem in franchising and emerges as one of the key examples of every abuse you can think of." In 1989, the U.S. Small Business Administration refused small business loans to Subway franchise owners until Subway removed a contract clause which gave it the power to seize and purchase any franchise without cause.[133] American soldier Leon Batie sued Subway for allegedly violating the U.S. Servicemembers Civil Relief Act. Batie had owned two Subway franchises in Dallas, Texas, which fell behind on rent payments while he was deployed in Afgahnistan, leading to Subway terminating Batie's leases and selling the franchises. The parties reached a confidential settlement in January 2010. [134]

On January 31, 2011, a Subway lawyer wrote to Casey's General Stores, a chain of Iowa-based convenience stores, demanding that Casey's cease using the term "footlong" in advertisements for its 12-inch sandwiches and threatened a lawsuit. Consequently, in February 2011, Casey's General Stores Inc. filed a petition in a U.S. District Court in Des Moines, seeking a legal declaration that the word "footlong" does not violate Subway's rights.[135] Casey's further sought a declaration that the word "footlong" is a generic description of a sandwich measuring one foot.[136][137] Before serving its complaint on Subway, Casey's voluntarily dismissed its action, ending the litigation.[138] Subway attempted to trademark the term "footlong", however a trademark appeal board ruled in 2013 that the term was generically used when selling sandwiches.[139]

Subway removed azodicarbonamide from its bread after food blogger and activist Vani Hari gathered more than 50,000 signatures in a petition drive.[140] Before Vani Hari's petition, Subway had used azodicarbonamide as a bread conditioner, to whiten the dough and allow sandwich bread to bake more quickly. [141]

In August 2015, Vani Hari again petitioned Subway in conjunction with Natural Resources Defense Council, Friends of the Earth, the Center for Food Safety, U.S. Public Interest Research Group to commit to buying meat produced without the routine use of antibiotics and to provide a timeline for doing so.[142] In October 2015, Subway announced it would transition to chicken raised without antibiotics in 2016 and turkey within the following 2–3 years, and would also transition beef and pork raised without antibiotics by 2025.[143][144]

In 2021, a lawsuit was filed against the company alleging that Subway's "tuna" was a mixture of "various concoctions that do not constitute tuna, yet have been blended together by defendants to imitate the appearance of tuna". The company denied this claim, and its senior director for global food safety and quality said in a statement that "Our restaurants receive pure tuna, mix it with mayonnaise and serve on a freshly made sandwich to our guests."[145] The investigative TV show Inside Edition sent samples of Subway's tuna salad to Applied Food Technologies, a Florida company that carries out DNA testing of seafood. According to that company, "Yes, we confirmed that tuna was definitely in all three samples we received."[146] Subway established a website, SubwayTunaFacts.com, to refute the claims that they did not use real tuna, which they have denied unambiguously.[147] A U.S. District Court judge in California threw out the lawsuit in October 2021, finding that the plaintiffs failed to prove that Subway fraudulently represented the ingredients in its tuna salad.[148]

International cases[edit]

In October 2010, Subway franchisees in the United Kingdom lost a high court appeal against paying standard VAT on all toasted subs, as required by HM Revenue and Customs. Thus, in the United Kingdom, a toasted sub attracts VAT, whereas a cold sub, eaten off the premises, does not. Competitors such as Quiznos and McDonald's do not pay VAT on similar food.[149][150][151]

In March 2012, Chancellor of the Exchequer, George Osborne announced plans to close the loophole that allows Subway competitors to offer hot food without paying VAT. This legislation was expected to come into force from October 2012 onward,[152] but on May 28, 2012, the government withdrew plans to charge VAT on originally hot food being allowed to cool naturally.[153] In June 2012, Subway launched the "Toast the Tax" campaign to put pressure on the government to drop VAT on toasted sandwiches, as it has done for hot savouries.[154]

In 2019, the Fair Work Ombudsman found that 17 Australian-based Subway franchises had underpaid workers.[155] The lengthy investigation by the Ombudsman specifically found that franchises failed to pay the employees minimum wages, casual loadings, holiday and overtime rates, and did not issue proper pay slips or keep proper employment records.[155] The investigation resulted in over $81,000 being recovered in unpaid wages for over 160 employees.[155] Subway responded by introducing a rolling audit of franchisee employment records and commented that franchise agreements could be terminated if franchisees failed to meet Australian workplace laws and Subway's internal standards of operation.[155]

In 2020, the Supreme Court of Ireland ruled that Subway bread had too high a sugar content to be classed as bread for VAT reasons, with its recipe including sugar equal to 10% of the weight of the flour.[156] The ruling is based on a 1972 exemption to Ireland’s value-added tax.[157]

Following the 2022 Russian invasion of Ukraine, Subway was criticized for not divesting or scaling back its operations in Russia, unlike most of its competitors.[158][159][160] Subway issued a statement saying, its corporate office does not own any of the 446 Subway stores in Russia, and issued a statement saying, "In addition to working with our franchisees across Europe to provide meals to refugees, we will redirect any profits from operations in Russia to humanitarian efforts supporting Ukrainians who have been affected by the war. Our restaurants in Russia are all independently owned and operated by local franchisees and managed by an independent master franchisee."[161]

Soy protein in chicken products[edit]

In an investigation by the Canadian Broadcasting Corporation (CBC)'s consumer affairs television series Marketplace aired in February 2017, chicken from five fast-food restaurants was lab-tested to determine constituents. While DNA testing found between 84.9% and 89.4% of the DNA from other restaurants' chicken products to be chicken DNA, with the remaining being unidentifiable plant DNA, on the two Subway chicken items tested, 53.6% and 42.8% of the DNA was found to be chicken, with the remainder being mostly soy. Although ingredients listings did show soy protein to be a constituent of both of the chicken products, Subway states that the proportion is less than or equal to 1% and that the finding of about 50% soy DNA is not representative of the actual amount of soy in the product. Subway has called CBC's report "absolutely false and misleading" and demanded that it be retracted. Meanwhile, however, Subway Canada stated that it was investigating with its supplier to ensure that the proportion of soy protein was as per expectations.[162][163][164][165][166]

According to Subway's website, U.S. stores' ingredients may differ from those in Canadian stores. Both countries include soy protein in chicken strips, but only the U.S. version states that it is present in quantities of 2% or less. The Canadian version includes soy as an ingredient in its chicken patty, but the United States version does not.[167]

In April 2017, Subway sued the CBC, as well as the reporter and two producers, for $210 million, alleging the CBC acted "recklessly and maliciously" and that "these false statements... were published and republished, maliciously and without just cause or excuse, to a global audience, which has resulted in pecuniary loss to the plaintiffs." The CBC stood by its reports, stating that the DNA tests were done by independent and credible experts.[168] The CBC's Emma Bédard stated that Subway had not provided an alternative explanation for the DNA test results obtained by the CBC.[169]

In November 2019, Subway's lawsuit against the CBC was dismissed through anti-SLAPP legislation, as CBC's reporting was deemed to be a matter of public interest.[170][171] In January 2021 the Ontario Court of Appeal overturned the decision dismissing the lawsuit.[172]

See also[edit]

References[edit]

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External links[edit]

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