Subway's new $5 menu fuels franchise profit concerns

It's not so simple a question, especially for a fast-food giant that has spent so much energy, for so long, to find some sort of value offer that is compelling enough to get customers in the door without causing more franchisees to go out of business.

Take, say, the last year. The company late in 2025 renamed its loyalty program the Sub Club, after its old stamp collecting program from 20 years ago. The program was so generous that franchisees revolted and asked that it be changed. The company did so in February, which only angered customers.

Amid this, Subway has used buy-one, get-one-free offers through that loyalty program as something of an incentive. That, too, has run afoul of operators who complain that the program is too generous.

And early last year the company offered any footlong sub for $6.99. That, too, angered franchisees.

These kinds of revolts are almost an annual occurrence. Let's go back to, say, 2017, when the company tried offering footlong subs for $4.99. Franchisees pushed back and the chain's CEO at the time, Suzanne Greco, was ousted just a few months later. In 2020, Subway tried a 2-for-$10 footlong offer. Franchisees pushed back and the company ultimately rescinded.

Indeed, it does not matter who has been the CEO of Subway, whether it's Greco or John Chidsey or the recently appointed Jonathan Fitzpatrick. Every one of them has, at one point or another, tried to push through some sort of big discount offer that runs afoul of franchisees.

The jury remains out on the latest value effort. The value menu includes new Protein Pockets featuring meat and cheese wrapped in a tortilla, a selection of "Deli Faves," including a pair of new sandwiches, plus a $4.99 six-inch "Sub of the Day." In all, the company is boasting 15 options under $5.

One operator called it a "nonprofit" offer. Another called it a "mess," citing a range of prices operators are placing on the items on the menu. (In our market, the prices appear to be $3.99 and $4.99.)

But one franchisee said he liked that there were multiple new sandwiches on the menu that cuts the food cost on the subs and make it more profitable. Another cited McDonald's latest $3 and Under menu, noting that Subway needs to be more competitive.

At this point, Subway likely has little choice but to find some kind of value option because customers really want lower prices. No matter what we ever say on social media, customers usually say something along the lines of Subway is too expensive.

According to data from Restaurant Business sibling company Technomic, Subway gets lower overall value scores than Jersey Mike's, despite its overall value reputation.

The chain thrived going into and during the Great Recession with its $5 Footlong, an offer that helped destroy many of its nearest competitors.

Yet that program worked too well. Eventually, costs grew, making the program untenable for franchisees. But it went on so long, and was so popular, that customers viewed the end of the $5 Footlong a price increase.

That also established Subway as a low-priced option. And the company has only reinforced that in the years since with price-based marketing. We routinely see adds about Subway pushing the mobile app BOGO offer.

Yet price-based marketing, however, conflicts the chain's fundamental problem these days, its consistently closing locations. Subway closed more than 700 restaurants last year, again, and has closed about 8,000 over the past decade. Offering value at the expense of franchisee profitability is a major, losing proposition.

All of which is to say that the company's latest value offer needs to thread that needle, ensuring some profitability for franchisees while being compelling enough to draw in customers who wouldn't otherwise think of Subway. It remains to be seen whether the latest effort will work.