Subway, the iconic sandwich chain, faces significant challenges as it prepares to be acquired by Roark Capital for nearly $10 billion, according to industry experts.

Exclusive data from Placer.ai reveals a troubling trend of plummeting foot traffic in Subway’s US franchises, with a staggering 21.6% decline over the past four years.

This decline sharply contrasts with rival Jersey Mike’s, which has experienced a 39.1% increase in foot traffic during the same period from May 2019 to May 2023.

Andrew Pudzer, former CEO of CKE Restaurants, which includes fast-food brands like Carl’s Jr. and Hardee’s, commented on Subway’s predicament, saying, “You never want to see traffic down significantly. If you are going to build your business, you can’t continue to lose traffic at a significant rate.”

Foot traffic down

While Subway’s foot traffic did show a modest 0.08% increase from May 2022 to May 2023, it lagged behind Jersey Mike’s (13.7%) and Jimmy John’s (2.4%). Firehouse Subs also experienced a decline, down by 4.2% during that period.

Despite these challenges, Subway has touted positive same-store sales growth of 9.3% in North America this year, attributing it to a transformation journey that included menu improvements and franchisee profitability enhancements.

Roark Capital, an Atlanta-based private equity firm known for backing restaurant conglomerate Inspire Brands, agreed to purchase Subway for $9 billion, with an additional $600 million contingent upon Subway meeting certain performance targets. The acquisition is subject to regulatory approval.

New slogan

Pudzer, who oversaw Roark’s acquisition of Arby’s in 2011 when it was struggling, suggests that Subway needs a new slogan to reinvigorate its brand.

Subway has faced several public relations challenges over the past decade, including the conviction of spokesperson Jared Fogle for child pornography in 2015 and allegations of selling fake tuna and chicken. The brand also faced backlash for its association with soccer star Megan Rapinoe, who knelt during the national anthem.

To regain its footing, Subway will need to reconnect with its target market and make customers feel comfortable once again, according to Pudzer.