ADVERTISEMENT

The rise and fall of Subway, the world's largest fast-food chain

Subway , the largest fast-food chain in the US and in the world, first opened in the 1960s and quickly expanded in the following decades.

subway
  • Successful ad campaigns with Jared Fogle the man who lost over 200 pounds while eating Subway sandwiches and the "$5 Footlong" jingle have contributed to sales throughout the years.
  • However, the company took a turn in 2014 when sales started to decline.
  • It had a public-relations crisis on its hands when Fogle was arrested and charged with having sex with minors and distributing and receiving child pornography. He was sentenced to nearly 16 years in prison in December 2015.
  • In the past year, Subway closed over 1,000 locations nationwide.
  • Visit Business Insider's homepage for more stories.
ADVERTISEMENT

In the past few years, Subway restaurants have been dealing with growing pains, declining sales, and a PR issue with legal troubles for its former spokesperson, Jared Fogle. As a result, the sandwich company has been closing hundreds of stores all over the US for the past few years.

It hasn't always been like this, however. In the '80s, '90s, and early 2000s, Subway was expanding rapidly, becoming the world's largest fast-food chain.

Keep reading to learn how a company that was on the rise for decades suddenly took a turn for the worse.

ADVERTISEMENT

Wikimedia Commons

Nuclear physicist Peter Buck and college student Fred DeLuca opened Pete's Super Submarines in 1965, in Bridgeport, Connecticut . On the first day, the shop sold 312 sandwiches, each costing less than $1.

In 1968, the two founders rebranded the shop and called it Subway, and by 1974 the company had 16 shops throughout Connecticut.

ADVERTISEMENT

haikarate4/ YouTube

At the time, the chain was known for its BMT marketed as the Biggest, Meatiest, and Tastiest sandwich and its Snak, which eventually became the six-inch sandwich we know today.

ADVERTISEMENT

Charles Krupa/ AP

Subway is one of the cheapest brands to franchise. It costs between $116,000 and $263,000 to open a Subway . For comparison, it costs between $1 million and $2.2 million to open a McDonald's.

As a result, Subway expanded quickly, both in the US and overseas.

ADVERTISEMENT

Random Retail/ Flickr

Subway opened restaurants in gas stations, at truck stops, at rest areas, and even in convenience stores. Its "anywhere and everywhere" mentality allowed it to expand quickly.

ADVERTISEMENT

Dima Gavrysh/ AP

Although Subway always marketed itself as a healthy fast-food option, the company really began to emphasize its health advantages when the country became increasingly diet-crazed. In 1997, Subway released a campaign that advertised its seven low-fat sandwiches and compared them to other fast-food chains' unhealthy burgers and tacos.

By tapping into American's priorities, Subway became the largest restaurant chain in terms of locations in the US, passing McDonald's in 2002.

ADVERTISEMENT

CNN/ YouTube

In 2000, Subway introduced the US to Jared Fogle, who said he used to weigh 425 pounds but lost over 200 of those pounds by eating Subway sandwiches. Fogle was often seen on commercials holding up his old pants, proving how much weight he had lost.

The campaign was so successful that sales rose 20% after the first commercial.

ADVERTISEMENT

Seth Wenig/ AP

Riding off the success of Fogle's ads, Subway launched a new "$5 footlong" campaign with a catchy jingle. The campaign came in response to many US consumers' desire for cheaper food options . By 2011, the company's sales reached $11.5 billion .

Joe Raedle/Getty Images

ADVERTISEMENT

In 2014, Subway's sales declined by 3% , and competition from chains like McDonald's, Jimmy John's, Potbelly, and Panera didn't help.

Phillip Pessar/ Flickr

Subway got too big, too fast. Instead of focusing on location, the company focused on restaurant count . As a result, restaurants opened within blocks of each other, creating competition within the same company.

ADVERTISEMENT

"I feel their concerns 10 years ago was just opening up locations," a franchisee with two locations told Business Insider. Fred DeLuca, one of Subway's founders, "was obsessed with having the most locations, and he achieved it. We had people open up on all sides of us. That was definitely a problem."

AP

He was sentenced to nearly 16 years in prison in December 2015.

ADVERTISEMENT

Subway immediately cut ties with Fogle by deleting any mention of him on its site and social media accounts.

Joel Page/ AP

Sales dropped to $11.3 billion in 2016, which was down from $11.5 billion in 2015. In response, the company closed 359 locations worldwide.

ADVERTISEMENT

Jeff Roberson/ AP

At the beginning of 2018, the company said it expected to close 500 stores that year . It ended up closing more than it expected. Subway now has 24,008 locations in the US.

ADVERTISEMENT

See Also:

FOLLOW BUSINESS INSIDER AFRICA

Unblock notifications in browser settings.
ADVERTISEMENT

Recommended articles

Mastering adaptation: Strategies for soccer league matches

Mastering adaptation: Strategies for soccer league matches

10 African countries that waste the most food in 2024

10 African countries that waste the most food in 2024

US troop withdrawal from Niger hangs in the balance

US troop withdrawal from Niger hangs in the balance

Detained Binance executives sue Nigerian authorities for human right violation

Detained Binance executives sue Nigerian authorities for human right violation

Nigeria's central bank increases minimum capital base for banks

Nigeria's central bank increases minimum capital base for banks

Sony’s creators convention redefines the creative landscape for content creators

Sony’s creators convention redefines the creative landscape for content creators

Exploring the popularity of progressive jackpot slots in Indonesia

Exploring the popularity of progressive jackpot slots in Indonesia

Egypt, Nigeria, and South Africa ranked as Africa's most polluted countries in new report

Egypt, Nigeria, and South Africa ranked as Africa's most polluted countries in new report

10 African countries with the lowest life expectancy according to the World Bank

10 African countries with the lowest life expectancy according to the World Bank

ADVERTISEMENT