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Subway Couldn't Even Give Its Sandwiches Away for Free In Latest Revamp Move, Insider Says

An inside look into the chain's major campaign reveals disappointment among franchisees.
FACT CHECKED BY Faye Brennan

In an effort to save face in the wake of recent drama and declining sales, Subway has been touting a big brand transformation that's taking place within its stores, phone app, and on the menu. But based on initial reviews, the new changes haven't managed to win customers over.

A food critic for the New York Post called their newly launched sandwiches "just as vile as the old ones," while a review in the Washington Post took aim at the lukewarm execution of the new-and-improved customer experience, pointing to uninspired ingredient combos and staff that still don't know how to make the newly launched menu items.

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Even the sandwich chain's franchisees—who stood to regain their footing with this rebranding attempt—are less than thrilled about the outcomes of Subway's "biggest menu rehaul in history." According to one West Coast operator who spoke to us under the condition of anonymity, the menu upgrades Subway has rolled out are nothing but smoke and mirrors. A behind-the-scenes look reveals an even more disappointing image of the struggling chain.

The Eat Fresh Refresh was a botched job

At the heart of the Eat Fresh Refresh were Subway's "new and improved" ingredients, some of which were used to make the new subs: Turkey Cali Fresh, Steak Cali Fresh, Subway Club, and All-American Club. The chain claims their "new" bacon is crispier, the "new" turkey and ham sliced deli-thin, and the "new" steak is thicker and juicier. But, according to our inside source, the changes have consisted of nothing but minor tweaks to existing ingredients.

"Our turkey may be sliced more thinly now," our source says, "but it's the exact same turkey we were using before."

The Subway operator says the company's thinking behind slicing their ingredients "deli-thin" was that the optics of the subs would change. "Optics matter, sure, but we're having to pay for it. Our labor has gone up."

subway meat
Courtesy of Subway

Other innovations, like the addition of mozzarella, rotisserie chicken, and roast beef (which, according to the Washington Post, isn't even available yet), are simple resurrections of popular ingredients that have previously been cut from the menu. "We had rotisserie chicken on the menu a year ago, and it used to do well before it was cut," our source says. "It's now back on the menu, and that's a revolution?"

The menu refresh was announced some eight weeks before the rollout, the operator says, which confirms North America business unit president Trevor Haynes' statement that the upgrade wasn't something "we thought of on a Monday and we delivered on a Friday." However, Subway seemed to have come up with the refresh idea first, then scrambled to reverse-engineer the changes that should have been at the heart of it.

"They announced it 8 to 10 weeks ago but kept adding more stuff to the refresh. It felt like they came up with the idea of a refresh and thought 'What can we add to this?' each week," our source says.

Thousands of free sandwiches went unclaimed

But perhaps the biggest disaster was the chain's major sub giveaway that accompanied the big new menu rollout. Subway announced that on July 13, it would give away a million free sandwiches to the first 50 customers at each of their locations. And while the promise of free food usually spells a major traffic draw to fast-food restaurants, it seems that Subway couldn't give away their planned number of free sandwiches… because customers simply didn't want them.

According to our source, who operates several Subway locations and communicates with fellow franchisees regularly, the average number of free sandwiches given away was a measly 20 per location.

"There were a few stores that did have 50 giveaways, but quite frankly, most stores managed 10 to 20," our source says. "That's what I've heard from at least 100 franchisees."

Our source says that before the launch, the thinking was that the sandwiches would "bring people back to Subway's restaurants which are looking good, operationally tight, and will have this new product that people will be excited about." But the company allegedly tried to downplay the intention behind the giveaway once it became clear it was a failure.

"Then the party line changed. They said the giveaway was just a small piece of this big change and it wasn't even a commercial piece, it was a PR piece."

Still, even as a PR stunt, the free sandwiches ended up hurting the already struggling operators. Subway compensated the ingredients for the million subs campaign, but the cost of labor in an already tight labor market ended up falling on the franchisees' shoulders. "They comped $1.60 cents per sandwich, which is the cost of ingredients, but the labor cost and every other cost was borne by the franchisees."

Subway called the reimbursement issued to its franchisees "in-line with industry standards."

Disappointing initial returns?

This isn't the first time operators have said the company's promotional deals were hurting their bottom line. A similar complaint was made public in 2020 when a survey showed that as many as three-quarters of American franchisees opposed the 2-for-$10 Footlong deal, which would "simply double their losses" on an already unprofitable $5 Footlong. According to Restaurant Business, the company had "done little to make its case to operators for why the offer is necessary and whether they can make money off of it."

The Eat Fresh Refresh seems to be a similarly unprofitable endeavor, according to our source, who says the returns have been low since the rollout. "The operators started asking: if we gave away half a million sandwiches on Tuesday, how many of them were sold on the subsequent days? [The rate of] coming back and buying [the new sandwiches] was almost zero. It is not sticking in people's minds."

Subway, on the other hand, provided a different account of their sandwich giveaway. "Overall, restaurants saw a significant lift in sales and traffic, leading to some of the best sales numbers the brand has seen in years," a spokesperson for the company told us.

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Editor's note: This article was updated on July 20 with a comment from Subway.

Mura Dominko
Mura is a senior news editor leading ETNT's coverage of America's favorite fast foods and restaurant chains. Read more