Subway restaurants are best known for the brand’s commitment to providing fresh ingredients and healthier food alternatives to its customers. Behind the scenes Subway has been working diligently to improve the sustainability of its products and operations. They are on a journey to make both the restaurants and operations as environmentally and socially responsible as possible and to help improve the health of the planet at the same time.

Over the past several years, Subway has switched to products and business practices that use less energy and resources, generate less waste, and the brand is currently working on others. All new and remodeled stores now use energy-efficient lighting saving electricity—in 2014 these measures saved an estimated 25 million kilowatt-hours, which would be enough to power 2,296 average U.S. residences for a year. Low-flow faucets and taps that increase the water pressure for rinsing are standard for all new Subway restaurants. This small change saves 277 million gallons of water annually. By removing the paper interleaf between sliced cheeses, an additional 450,000 pounds of paper has been removed from Subway’s waste stream annually. Plastic salad bowls, lids, and catering trays and are made with 95 percent post-consumer recycled content and can be recycled.  This process allowed us to divert 209.8 million bottles from landfills last year. Subway has also just released this video about Living Green: https://www.youtube.com/watch?v=VIeNkRr4NLk

On Monday, April 20, McDonald’s began testing all-day breakfast in the San Diego area. And according to new data from a consumer perception research firm, such a move could be a major boon for the brand.

YouGov BrandIndex ranked McDonald’s second for purchase consideration among frequent breakfast patrons. The study asked consumers who eat a fast-food breakfast at least once a month where they would be likely to eat next, regardless of whether it was for breakfast or another daypart. The results indicated that 41.8 percent of participants would choose McDonald’s. The brand was bested only by Subway.

“McDonald's seems to be playing toward its strengths so that the strategy seems to make sense,” says Ted Marzilli, CEO of YouGov. “The caveat being of course that it's not a trivial decision to decide to do breakfast all day. They have to reconfigure kitchens or reconfigure the setup of how you position different food items so it's not necessarily easy … to execute.”

McDonald’s has long considered all-day breakfast, but operational constraints—like the ones cited by Marzilli—were likely deterrents. During the test, participating San Diego stores will serve a limited breakfast menu of nine items throughout the day, including the iconic Egg McMuffin, hot cakes, and hash browns.
“They’re going after a segment among [in] which they're already strong. It seems like there might be a ready-built audience for the all-day breakfast,” Marzilli says.

Subway, which took the No. 1 slot at 48.1 percent, started serving breakfast at its domestic locations in 2010. The menu is comprised of only four flatbread sandwiches with calorie counts between 360 and 430. Given how similar Subway’s breakfast menu is to its core offerings of sandwiches and subs, all-day breakfast could be less complicated compared to brands like McDonald’s that serve everything from muffins, bagels, and biscuits to parfaits and oatmeal.

For operators considering a move to all-day breakfast, Marzilli would advise them to conduct specific research on their clients to determine their receptivity.

Brands might also consider testing on a small scale.

“Individual operators or franchisees could extend hours as you said, maybe provide a limited breakfast menu later into the day. I think those are good ideas and they're lower cost, lower risk ways to try this out rather than commit to a 24-hour or breakfast-all-day, full menu. I think it would make sense to test the waters that way,” Marzilli says.

By Nicole Duncan

Each morning at Taco Bell headquarters in Irvine, California, employees from across various departments start the day with an informal “newsroom” meeting. The standup gathering touches on everything from world events to what customers are saying on Facebook and Twitter to product promotions. All of it helps drive the day’s work for the social media team, which takes ideas and then sorts out which social media channels they might fit into.

While Taco Bell has strategic campaigns and specially created social media content, much of the social media team’s work centers on listening to what people are organically saying—complaints, compliments, or any other thoughts—on Twitter, Facebook, and other outlets.

“It’s everything. There’s just such a huge wealth of conversation happening,” says Tressie Lieberman, Taco Bell’s senior director of digital and social marketing.

As social media becomes more ubiquitous, brands are dialing in on new ways to measure their reach and success. A few years ago, basic metrics like followers, shares, favorites, and likes might have dominated the conversation. But measuring social media activity is becoming more nuanced and complex, particularly when it comes to better listening to consumers, even when they’re not directly talking to a brand.

Taco Bell’s customers are extremely passionate about the brand, Lieberman says, so her team works to tap into what those people are saying rather than simply manufacturing news around the brand. Loyal fans are a great distribution channel, as they are well trusted with friends and followers in their networks. While it’s much harder to measure, Lieberman says, the strength of personal connections is what makes social media so powerful. And it’s likely that as metric tools continue to grow in sophistication, more companies will home in on building and studying those relationships.

“The number of fans and followers—that’s all fleeting,” she says. “I think people will likely move away from getting pure numbers. It’s more about making a real connection.”

Those connections are often missed by companies looking to make inroads on social media, says Leeann Leahy, president of the VIA Agency, a marketing and advertising agency in Portland, Maine.

On social media, people demand authenticity. And brands often miss that they should be part of a conversation, not issuing one-way advertisements.

“It’s like walking into a cocktail party and trying to make a sales pitch. You want to walk into a cocktail party and have a conversation, but that requires listening,” she says. “Unfortunately, a lot of brands throw up things and expect the world to respond to them. It’s almost like they’re standing in the corner throwing out topics at a cocktail party and no one’s talking to them.”

Leahy says companies should measure their social media success in the same way they measure their brands offline. They should track attitude changes, loyalty, and conversion rates. Likes and follows are great, she says, but they’re ultimately passive acts; it just takes one click. Quick-service brands should be more concerned with how many people are sharing their content or mentioning the brand naturally on their own.

“Understanding the context in which your brand is featured is really important,” Leahy says, “in the same way understanding the engagement of your consumer is more than just likes.”

Increasingly, that engagement is coming in the way of photos generated by individual users. Image recognition company Ditto created a tool that can pick out logos in photos—like McDonald’s golden arches, Taco Bell’s signature bell on its sauce packets, and the crown on a Corona beer bottle—allowing companies to find brand-related, user-generated content even when it has no text, tag, or hashtag attached.

“They’re letting the photo speak for itself,” says Mary Tar-czynski, Ditto’s CMO. “The brand is not mentioned in the photo.”

Ditto recently studied major quick-service brands to see how often their logos appeared in Twitter pictures during the last quarter of 2014. After adjusting for market share, the analysis found that Domino’s Pizza, Chick-fil-A, and Burger King showed up in photos the most, while McDonald’s, Wendy’s, and Subway performed near the bottom among the big brands.

Tarczynski says most bigger companies are getting better at listening to consumers online. But generally they’re only searching text for key phrases and brand names.

“They’re missing some of the exposure that they’re getting that they could be taking credit for,” she says. “It’s discovering what people are saying about your brand via photos.”

Marketing studies continually point out that user-generated social media content is more engaging than brand-generated posts. And Tarczynski says photo recognition allows brands to measure and leverage that content. Fast-food brands can see if people are eating in their cars, at home, or in the store, and they can drill down to see whether photos tend to be shared in a negative or positive context.

“We found that 85 percent of the photos we find that have a brand do not mention the brand in the text,” Tarczynski says. “It’s a large and growing part of the conversation that’s missing.”

Of course, the biggest fast-food brands are the ones with the most sophisticated social media tools, says Gary Occhiogrosso, president and chief development officer of TRUFOODS, parent company for brands including Pudgie’s Naked Chicken Co. and Ritter’s Frozen Custard.

But that doesn’t mean the smaller guys aren’t investing in the space. While the biggest companies are able to maintain presence in multiple media and experiment with emerging networks, Occhiogrosso says, his brands are focusing heavily on Facebook, Twitter, and now Instagram. Social media serves multiple purposes, from educating customers about the new chicken concept to communicating with potential franchisees. Yet on all three platforms, his team is committed to creating a two-way communication street.

“As much as we want the guest to be engaged with the brand, we’re equally committed to having the brand engagement back to the guest.”

Because ultimately, he says, that’s the most important metric.

“I think the numbers are very important,” Occhiogrosso says. “But when I see that engagement, I know things are happening in a positive way. Because I see it.”

Harbor Wholesale Foods of Lacey, Washington, announces a five-year distribution agreement with restaurant chain Subway Restaurants, serving 400-plus stores throughout western Washington and southeast Alaska. Harbor will deliver food products to franchise owners of the largest restaurant chain in the world from as far north as the Canadian border to as far south as Toledo, Washington. The partnership means 28 additional hires to support the new business, which is about a 10-percent increase in staff for the 92-year-old, family-owned company.

Fourth-generation owner and CEO, Justin Erickson, believes this deal leverages the best of Harbor’s capabilities.

“Subway’s model of using regional distributors to serve local markets works well for Harbor’s distribution footprint. We will be able to utilize existing assets to serve Subway as well as our existing customer base. In addition, our reputation as a Subway distributor will open new doors for us in restaurant and convenience food distribution. Our entire team is excited and proud to begin this partnership.”

According to Independent Purchasing Cooperative, an organization that supports Subway franchises, “Harbor’s service capabilities and competitive pricing represented a clear preference among all bidders.”

Harbor will begin meeting with franchise owners in the coming weeks with deliveries beginning June 28, 2015.

Add some fiesta to your Footlong with the new guacamole from Subway. Dial up your sandwich’s flavor profile with rich, creamy guacamole made with Haas avocados, jalapeño peppers, onion, garlic, and a hint of salt and vinegar.

Make your morning guacamole good by pairing it with an Egg White & Cheese flatbread, adding it your favorite Footlong, or trying our newest flavorful Subway sandwich combination, the Chipotle Chicken Melt with Guacomole—made with juicy Grilled Chicken Strips & Guacamole on toasted Italian Bread, with melty Monterey Cheddar Cheese, our smoky Chipotle Southwest Sauce, and fresh veggies like crisp lettuce, tomato, and red onion.

It first blasted off in January 2015 as a kids TV show on WTTW designed to inspire Chicago-area kids to discover science.  

Now the Chicago-made show, “Moochie Kalala Detectives Club,” has inspired governor Bruce Rauner to declare Illinois’s first “Science Detectives Week” from May 4 to 10, the kick off to a STEM-education movement taking place across Chicagoland through June. The kids show’s new presenting partner, Subway, will be “fueling the ‘science detective’ rocket” that will bring science events to schools across the region, science grants to local teachers, and free science activities to parents and classrooms.

“In just a few months, ‘Moochie Kalala Detectives Club’ has become so much more than just a fun kids TV show that creatively encourages science exploration,” says Estlin Feigley, director of Dreaming Tree Films, the company behind the kids science show.  “It’s become a Chicagoland movement that has brought together local schools, officials, businesses, museums, and STEM-education advocates who all realize the importance of getting kids interested in science at a young age to encourage them to pursue STEM fields as adults.”

By declaring May 4–10, 2015, as “Science Detectives Week,” Rauner has proclaimed his support for inspiring local kids to discover science and pursue careers in STEM fields, recognizing the role “Moochie Kalala Detectives Club” plays in presenting science as fun, exciting, and entertaining to his youngest constituents. 

And other officials have joined the Moochie movement by hosting events following the governor’s kick-off week.  After “Science Detectives Week” blasts off, Congressman Bill Foster will host and attend an event in Aurora in May at Fred Rodgers Magnet Academy (one of the starring six Chicagoland schools on “Moochie Kalala Detectives Club”). As a scientist himself and the only physicist in Congress, Foster has been a long-time advocate of STEM education. 

Fueling the governor’s proclamation, “Moochie Kalala Detectives Club’s” new presenting sponsor, Subway Restaurants of Greater Chicagoland and northwest Indiana, will be delivering science grants and catered lunches to teachers in Chicagoland and northwest Indiana, as well as helping to deliver complimentary DVDs to schools and libraries across the region.

“At Subway, we’re proud to offer parents the best of both worlds: great-tasting meals their kids love that are also healthy, fresh, and nutritious,” says JoAnn Bachewicz, local owner of Subway restaurants.  “‘Moochie Kalala Detectives Club’ offers that same balance because it’s fun for kids, like ice cream, but parents know it’s good for them, like broccoli.”  

Another local owner, Phil Mesi, says his restaurants are among 800 local Subways that will host in-restaurant fun to help kids in their neighborhoods discover science.  “We’re all passionate about supporting education in the communities we serve, and we can’t wait to bring science-exploration fun to our local kids through our new ‘Moochie Kalala Detectives Club’ partnership.”   

“Moochie Kalala Detectives Club” presented by Subway is hitting the road through spring, and visiting nearly 10 public schools for school-wide assembly screenings featuring hands-on science from our partners including Adler Planetarium, Museum of Science & Industry, and Nancy B’s Science Club—the award-winning line of science toys from Educational Insights.

Additional science demos and activities for students will be provided by NorthShore University HealthSystem, Sylvan Learning, Peoples Gas, and North Shore Gas. Schools who would like to have an event at their schools can email moochiekalala@dreamingtreefilms.com.

The Dietary Guidelines Advisory Committee (DGAC) recently recommended changes to what Americans should eat, including suggestions to consume less meat, sugar, and saturated fat. While many operators remain focused on the calorie-count mandate set to take effect later this year under the Affordable Care Act, consultants say, the new guidelines also present an opportunity for brands to establish a formal strategy that makes health a permanent part of their business plans.

The DGAC—made up of 14 top nutrition experts—submitted its report in February to the U.S. Departments of Agriculture (USDA) and Health and Human Services (HHS), which will jointly publish the updated Dietary Guidelines before the end of the year. Many of the proposed changes in the 571-page report reinforce what is fairly agreed upon: Americans should eat fewer overall calories, more plant-based foods, and less sugar and saturated fat. Among the report’s notable firsts were suggestions to put a ceiling on total calories from sugar at 10 percent.

Howland Blackiston, principal at branding and design consultancy King-Casey, based in Westport, Connecticut, says his quick-serve and fast-casual clients aren’t too concerned about the updated guidelines right now.

“All they seem to care about is mandatory calorie counts; that’s what the focus is on right now,” Blackiston says.

Similarly, an expert at Chicago-based marketing and culinary consultancy CSSI says many of the firm’s clients are waiting to see how consumers respond to label mandates.

“Consumers all approach healthy eating differently. Some want to know chains are working toward healthier menu items; others don’t,” says Marie Molde, registered dietitian at CSSI, which also provides brands with support on nutritional guideline compliance. “[Chains] want to first label items how they are and see consumer response, and then move forward from there.”

Still, many suggest the guidelines provide operators with a glimpse into the future of consumer demands and a blueprint for menu formulation moving forward.

“No drastic menu changes”

In light of the DGAC’s recommendations, sandwich chain Subway plans to continue improving individual products through fewer ingredients and thorough testing. Corporate dietitian Lanette Kovachi says the brand is “already an industry leader in providing heart-healthy and low-fat sandwich options” for customers.

“As we continue to improve our offerings, no drastic menu changes are necessary, meaning the flavors that our customers have come to know and love will continue to remain delicious and nutritious,” Kovachi adds.

Transparency on menus has long been a key part of Subway’s health platform, as the brand has provided printed nutrition information on menuboards, tray liners, and napkins since 1997. It has since made the information available online, adding allergen information and a nutritional calculator in recent years, as well.

Similarly, Domino’s looked to get out ahead of labeling mandates as “one of the first national chains” to voluntarily post its nutritional content online 13 years ago, says Tim McIntyre, vice president of corporate communications. “We continue to look for ways to reduce sodium and fat … without compromising taste,” he says, adding that the best way for the pizza industry to address the DGAC’s recommendations is by giving consumers plenty of options.

“The beauty of pizza is that it’s so customizable,” he says. “With our multiple crust types, ... sizes, and combination of toppings, there are more than 34 million ways to order a single pizza from Domino’s. That means, in essence, customers can make their pizzas as indulgent or as healthy as they want. It’s all about consumer choice.”

A new menu strategy

Jesse Szewczyk, CSSI’s associate research and development chef, says that those brands tackling healthy reformulation are largely favoring a gradual approach as opposed to drastic changes.

“Probably 70 percent of the projects I’ve done in the past several years have been geared toward a slow, quiet approach to healthier menus rather than all at once,” Szewczyk says, adding that a lot of chains are giving broad guidelines for improvements when it comes to health.

Blackiston says he isn’t that surprised that many operators are taking a noncommittal approach to the DGAC report.

“A menu strategy is a lot of work. It requires rolling up their sleeves, getting a lot of different disciplines in the room, and getting them all to agree on which changes they are going to make on the menu to achieve their business objectives and how they’re going to do it,” he says.

Rolling out a new menu strategy—including assessing the competition, understanding regulations, conducting consumer research, identifying risks, setting prices, and designing a new menuboard—can take four to six months, he says. The new guidelines present an opportunity to develop a new strategy and test it.

“The obvious question is, What will be the impact to business if we make these changes?” Blackiston says. “Part of that is doing research to test concepts and ideas without even creating a menu item—just the concept of one. For example, what would happen if we had less meat on menu? You can test that and then make decisions.”

Start with sugar, plants

Registered dietitian and New York University adjunct professor Lisa Young, Ph.D., says the DGAC report heavily emphasized sugar on the menu.

“Sugar was one of the biggest items on the committee’s agenda,” she says. “For the first time, they issued an actual limit. For the food industry, that means really trying to go lower on sugar.”

An easy fix, she says, would be providing consumers with more options beyond sugary beverages like soda, such as bottled water, seltzer, and flavored sparkling water.

“The beverage industry can make money selling water,” she says. “People aren’t going to be drinking tap. They can charge the same amount for seltzer or sparkling flavored water.”

Another issue highlighted in the report was the recommendation that Americans eat more plant-based foods and less meat given its lower environmental impact, Young says.

Pulses—legumes such as dry peas and lentils—are an inexpensive way to beef up and differentiate these items, Szewczyk says.

“Recently, chains have begun exploring ways to menu pulses, from creative takes on meat-centric dishes such as lentil Bolognese or lentil pâté to calling out specific varieties of lentils such as Puy or French on menus,” he says. “They are a great source of protein and are easy to lighten historically heavier dishes such as cream soups, where lentils can be used to add the richness without added fat from heavy cream.”

Unlike some menu improvements that aren’t as easy to market on a menu—such as switching from saturated to polyunsaturated oils—offering more fresh, local vegetable options and sustainably raised meat, or adding a composting program, are all concepts that resonate well with consumers, Blackiston says.

“Where I have seen marketing on menuboards done effectively is most to do with freshness, sustainability, and local,” he says. “There’s a positive reception to that from consumers. It’s all about freshness now.”

Subway restaurants located in the Greater Los Angeles area are joining forces with Make-A-Wish across Los Angeles, Orange, San Bernardino, Tri, Kern, and Inyo Counties to give back to the local community. From May through September, more than 1,240 local Subway restaurants will participate in the “You Share. We Share” campaign to help support Make-A-Wish. 

The “You Share. We Share” campaign encourages the community to get out and share their weekends with Subway restaurants, and Subway will share right back by donating a percentage of weekend sales, up to $100,000, directly to Make-A-Wish across Los Angeles, Orange, San Bernardino, Tri, Kern, and Inyo Counties. As locally owned and operated franchises, Subway is excited to be able to further its commitment to the local community.

“We are honored that Subway has chosen Make-A-Wish as its partner in the ‘You Share. We Share’ campaign.This innovative approach to fundraising demonstrates Subway’s commitment to philanthropy and local engagement, and invites the community to get involved with wishes in a meaningful way. Thanks to the participation of our friends and neighbors throughout the region, Subway’s contributions will help us grant more wishes to more eligible children,” says Breena Gold, president and CEO, Make-A-Wish, Greater Los Angeles.

During the “You Share. We Share” campaign, Subway restaurants and Make-A-Wish will facilitate “wish parties” for children with life-threatening medical conditions. “Wish parties” provide an experiential moment in which the children’s “wish” is revealed. 

In addition, Subway restaurantswill launch its “You Share. We Share” ambassador program where team members will be visiting local communities in the Greater Los Angeles area recognizing and rewarding random acts of “sharing” — people practicing kind, thoughtful, deeds. Ambassador rewards will include but are not limited to: $5 Subway cards, “You Share. We Share” bags, and other Subway memorabilia.

“The ‘You Share. We Share’ campaign highlights Subway restaurants’ core values in giving back to our local communities. We are thrilled to be partnering with Make-A-Wish to help achieve our goal to raise $100,000 and spread the message of sharing and giving back. The campaign is simple, just visit your local Subway restaurant on the weekend and you will make a difference for a Make-A-Wish child in the Greater Los Angeles area,” says Bob Grewal, Los Angeles Subway multi-unit owner.

Subway is committing to removing all artificial colors, flavors, and preservatives from all of its menu items including salads, sandwiches, soups, and cookies across all North American restaurants over the next 18 months. Subway says it will make these improvements gradually without sacrificing taste. To kick off the next 18 months, the brand is currently introducing a new roast beef recipe, roasted with garlic and pepper to its more than 27,000 U.S. restaurants. The new roast beef is just the latest example of the brand’s ongoing efforts to improve its menu, following the introduction of new, cleaner label grilled chicken strips in January.

It is no secret that others have made their own cleaner label announcements, however due to Subway’s size and scale as the world’s largest quick serve, it is important to note that this major commitment is one the brand could not enter into overnight. Also, because of the diversity and growing nature of Subway’s menu, the brand had to consider more ingredients than many other quick serves and fast casuals have had to. Most of all, the brand wanted to make these changes without driving up the price of its sandwiches, as it is important to Subway that food stays affordable for customers.

“Back in 1965, when Fred DeLuca and Dr. Peter Buck opened their first sandwich shop in Bridgeport, Connecticut, they had a simple goal: give their neighbors and customers easy access to good, quality food at a great value. Today, Subway has thousands of locations, but we still uphold the same standards. We are committed to choice and quality, but we also take wellness and environmental responsibility very seriously. The new menu items we are introducing are perfect examples of how we plan to continuously improve to serve our customers,” says Elizabeth Stewart, director corporate social responsibility for Subway.

“Removing some of these ingredients will be relatively straightforward. Others will require significantly more effort by the Subway internal R&D team and our partners because of our size and scope. But we felt it was important to set an ambitious goal as a means to give us something to shoot for and demonstrate our unwavering commitment to wellness,” she adds.

Despite an increased consumer interest in health, nutrition, and ingredient transparency, Americans are still ignoring one of the easiest ways to live a healthier lifestyle: eating their vegetables. In celebration of National Eat Your Vegetables Day on June 17, Subway commissioned a survey that found that the majority of Americans (84 percent) aren’t meeting the USDA recommended minimum number of daily vegetable servings (four servings, or two cups). Perhaps more troubling is that 47 percent claimed that “nothing” prevents them from eating more vegetables, despite revealing that “overall health benefits” are their top motivation for vegetable consumption (70 percent), among those who ever eat vegetables.

“National Eat Your Vegetables Day shouldn’t be limited to just one day on the calendar for consumers to eat their vegetables—it’s something that everyone has heard since they were a child,” says Lanette Kovachi, MS, RD, global dietitian for Subway. “As a registered dietician, it’s encouraging that consumers have taken an increased interest in their own health and nutrition, but clear that there is more work to do to get people to eat more vegetables.”

“We commend Subway Restaurants’ efforts to encourage consumers to eat more vegetables and promote healthier eating,” says Kristen Stevens, COO of Produce for Better Health Foundation. “The findings of the National Eat Your Vegetable’s Day survey further draws attention to the need for Americans to incorporate vegetables into their diet as disclosed in our annual ‘State of the Plate’ report. The first step in changing behaviors is creating awareness and driving discussion to help educate consumers on the various health benefits of eating more vegetables and how to eat more of them.”

The Subway National Eat Your Vegetables Day survey examined the current state of vegetable consumption by American consumers, including number of servings eaten daily, favorite vegetables, excuses, motivations, and consumption meal time. The national survey was conducted online by Harris Poll on behalf of Subway Restaurants from June 4 to June 8 among 2,019 American adults ages 18 and older. 

While the average American consumer only eats 2.3 servings of vegetables per day, Millennials (age 18–34) consume more vegetables than any other generation, averaging almost a half serving more per day (2.7 servings). Further, the number of Millennials who meet the minimum recommendation of four servings per day is the highest of any age group (22 percent). 

But why are Millennials eating more vegetables? Survey results reveal personal appearance being a key motivator of vegetable consumption. Of Millennial adults who ever eat vegetables, 45 percent who ever eat vegetables are more likely to eat vegetables so they can “look better” as compared to those ages 35 and older (26 percent). Millennials are also more likely to eat vegetables to lose weight (56 percent) than those 35 and older (39 percent).

“The American diet has traditionally lagged in prioritizing vegetables as a staple of their diet; however, it is encouraging that the youngest generation is slowly bucking the trend,” Kovachi says. “The Millennial generation is more self-aware than previous generations due to their social, photo-driven culture, so ‘looking better’ is a natural motivator. But the truth is nutrient-rich vegetable consumption truly does have positive physiological effects, including a healthier-looking complexion, assisting in weight control, enhancing the immune system, and prevention of chronic disease.”

Although nothing prevents nearly half of Americans from eating more vegetables (47 percent), the survey also revealed other excuses for not eating more vegetables, highlighted by“Too expensive” (14 percent);“Dislike the way they taste” (11 percent); and“Preparing them takes too long” (10 percent). 

Perhaps it’s time management or they just don’t feel like it, but men (12 percent) are more likely than women (7 percent) to cite preparation time as a reason that they don’t eat more vegetables. Further inhibiting their consumption, men who ever eat vegetables (39 percent) are more likely than women (28 percent) to prefer their vegetables cooked.

Too bad bacon isn’t a vegetable. American consumers’ most beloved vegetables are lettuce and tomatoes (both 65 percent). However, the survey also revealed that Millennials were less married to these vegetable staples than other generations. Further, women demonstrated a greater affinity for variety, highly ranking cucumbers (60 percent), spinach (58 percent), and avocados (49 percent) among their vegetable favorites as compared to their male counterparts (cucumbers: 50 percent, spinach 44 percent, avocados 38 percent).

Dinner time remains the most popular meal for Americans’ vegetable consumption, with three out of four Americans who ever eat vegetables (75 percent) indicating that they consume the most amount/servings during this meal. Lunch (20 percent) and breakfast (1 percent) vegetable consumption continues to lag behind. Millennials indicated the greatest variety of consumption times that they were most likely to consume the most vegetables during dinner (63 percent) and lunch (28 percent).

“One of the easiest ways to eat more vegetables is to include them in more meals and snacks throughout the day,” Kovachi says. “Increasing vegetable consumption can be as simple as loading up a sandwich with a variety of fresh vegetables at lunch or choosing a salad, adding peppers and onions to a breakfast sandwich, or incorporating crispy, fresh veggies into snacks throughout the day.

“Subway has always been a leader in offering a large variety of fresh vegetables to make it easy for consumers to meet their daily requirement while on the go,” she adds.

Suzanne Greco, who began her tenure with the Subway restaurant chain as a Sandwich Artist in 1973, was named president of the company.

Even before she became a Sandwich Artist, Greco had been part of Team Subway since the first store opened as a family business nearly 50 years ago, and brings a lifetime of Subway experience to this role. For 24 years, she led the research and development team, spearheading many important initiatives designed to continuously improve the menu and customer experience. In 2012, Greco’s responsibilities expanded significantly when she began overseeing the operations department and her responsibilities expanded again earlier this year when she began overseeing the marketing department.

In 1996, Greco facilitated the creation of the Independent Purchasing Cooperative (IPC) to handle the Subway brand’s product purchasing. Today there are five IPC co-ops around the world providing the brand’s global supply of food and packaging at quality standards. Greco and her teams have earned ongoing industry recognition for their work.

In her new role, Greco will oversee the day-to-day operations of the company and will continue to report directly to CEO Fred DeLuca.

“Suzanne has accomplished a great deal with Subway and I know there are many more terrific things to come,” DeLuca says. “I have always been impressed with Suzanne’s relentless desire to make continuous improvements to our products and customer experience. She is always looking for ways to make our business even better. Together with our development agents and franchisees, I’m looking forward to working closely with Suzanne in her new role.”

“My primary focus is to make our family business even better by making improvements wherever we can, especially at the store level where the food and in-store experience is critical to keeping our customers happy and coming back,” Greco says. “With the dedicated and seasoned management team in place, along with our active franchisee and development agent groups, I know we will be able to accomplish a lot together.”

Greco has been actively involved in the Global Strategic Planning Committees and serves on the Board of Directors. She holds a BA degree in Business Administration from Sacred Heart University.

The overall perception of quick-service restaurants has trended downward as a category with Subway still managing to maintain its brand as the top achiever for the period. Subway decided to forgo the use of artificial ingredients in its menu and showed America how much it loved guacamole by making it a permanent addition to its list of add-ons.

Chipotle is the top improver this year. The chain announced that it would be cooking only with non-GMO ingredients.

QSR: Top Buzz Rankings and Scores

1. Subway, 21.8
2. Wendy’s 13.9
3. Chick-Fil-A, 13.3
4. Pizza Hut, 12.5
5. Sonic, 11.1

QSR: Top Buzz Improvers and Change in Scores

1. Chipotle, up by 1.0
2. In-N-Out, up by 0.8
3. Qdoba, up by 0.3

These brands were rated using YouGov BrandIndex’s Buzz score, which asks respondents, “If you've heard anything about the brand in the last two weeks, through advertising, news or word of mouth, was it positive or negative?”

Buzz scores can range from 100 to negative 100 and are compiled by subtracting negative feedback from positive. A zero score means equal positive and negative feedback.​

The Buzz Rankings chart shows the brands with the highest average Buzz scores between January and June 2015. The Buzz Improvers chart ranks the brands with the highest increase in Buzz comparing years 2014 and 2015. Both scores are representative of the general population.

All Buzz scores listed have been rounded to a single decimal place, however, we have used additional precision to assign ranks.

The Subway restaurant chain, committed to always improving the customer experience for every person that visits, has launched the Subway App and order.subway.com. The new features offer the added convenience of remote ordering and payment for its customers in the U.S. Later this year, the brand also plans to add PayPal, a global leader in digital payments, as one of the convenient options customers can use to pay for meals when they order remotely or pay in-store using the Subway App’s mobile payment feature.

Additionally, Android Pay joins Apple Pay as easy and secure payment option for customers to pay for their meals using a mobile device in-store at the point of sale. With the addition of PayPal, Subway restaurants will now offer multiple forms of mobile payment at its 27,000-plus U.S. store locations, the most across the category.

“Our customers are at the center of everything we do, and we know mobile is playing a key role in all of their lives,” says Valencia Johnson, a Subway restaurant manager in Los Angeles, California, who has 19 years of experience helping customers. “The new Subway app makes ordering on-the-go that much easier.”

Using order.subway.com is also an easy option for those on the go. On order.subway.com, customers can choose a restaurant, customize and place their orders, and then pick them up at the restaurant. To further simplify the checkout experience, we will also be enabling PayPal’s One Touch—the faster, easier way to pay for eligible customers checking out online via their phones or laptops. With One Touch, consumers that have opted-in can securely pay in a single touch on their phones or laptops without having to type in any payment credentials, usernames, or passwords.

“As part of our continued commitment to improve, we knew that offering online and mobile tools to our busy customers was critical to ensuring they cannot only eat fresh; but fast,” says Carman Wenkoff, CIO for the Subway® brand. “We are excited to launch our new ordering platforms and will continue to look for new ways to improve the Subway experience.”

“We look forward to introducing PayPal to our future list of payment options,” says Ken Moy, director of global payments & emerging commerce for the Subway brand. “This collaboration will make it quicker and simpler for the 169 million active, global PayPal customers to enjoy a great Subway meal at our more than 27,000 locations in the U.S.”

Delivery is about to become more convenient for restaurant patrons and operators. Or at the very least, that is Groupon’s mission with its new delivery and takeout program, Groupon To Go, which launches in Chicago today and other metropolitan areas beginning with Boston and Austin, Texas, this fall.

Since March, Groupon had been testing the program at 500 establishments in the Chicago area, and earlier this month it acquired third-party mobile ordering and delivery platform OrderUp, which had been backed by AOL cofounder Steve Case’s investment firm Revolution Ventures. Under Groupon To Go, customers can use their existing Groupon account on the mobile app or website to order delivery or takeout at a 10 percent discount.

“Groupon has been working with tens of thousands of restaurants, and we’ve seen that takeout and delivery has been an option that both restaurants and consumers are interested in,” says Sean Smyth, vice president and general manager of the fledgling program. “We want to work with many restaurants, not just ones that are offering deals.”

As digital coupon companies continue to search for a more sustainable business model than one-time deals, Groupon has the potential to tap into the burgeoning digital ordering space. According to the NPD Group, phone and digital orders are nearly neck and neck: In May 2015 phones accounted for 1.02 billion orders, while digital clinched nearly 904 million.

In addition to independent restaurants, Chicago locations of major chains including Subway, Papa John’s, Popeyes, and Quiznos have also signed up. Concepts that already offer delivery can use Groupon To Go without changing their system, while concepts that lack such an infrastructure can use Groupon’s resources to fulfill deliveries, Smyth says.

“When it comes from the restaurant’s perspective … flexibility and scale are the two things that we offer them. On the flexibility side, if the kitchen is busy, they’re able to basically turn it on or off,” Smyth says. He adds that can turn the delivery option off and on at their discretion with no restrictions or penalties from Groupon To Go. “There’s only so many companies you’d want to work with; there’s only so many ways that you want to indoctrinate some new process to your team and staff—that’s where the scale comes in. You don’t want to waste a whole bunch of time setting up some relationship with some company that may or may not be there next year.”

Indeed, few third-party digital takeout and delivery services can boast Groupon’s breadth—25 million active users in North America alone, according to the company. While OrderUp will continue to operate in roughly 40 mid-tier cities, the ultimate plan is for Groupon To Go to penetrate North America and eventually international markets, as well. Smyth adds that it would be a boon for chains with locations abroad that could streamline its ordering system with a single partner across the globe.

“OrderUp has done well focusing on some of the smaller, midsized markets, and Groupon has crazy scale in larger, metropolitan areas so when you put that together, you’re talking a footprint that’s frankly going to be very unique,” Smyth says. “It’s a really lovely system.”

By Nicole Duncan

Manitowoc Foodservice was named Vendor of the Year by the Subway restaurant chain during the brand’s 50th Anniversary Convention recently in Las Vegas, Nevada. This award was given in recognition for the hard work and dedication of the Manitowoc Foodservice brands Manitowoc Ice and Merrychef as a truly global supplier who supports an on-going relationship with Subway through innovation, enhanced operations, and customer service. 

“Manitowoc as a company comes to us with innovations on a regular basis to see if they fit our needs and if it is something that would really benefit the Subway brand,” says Frank Buffone, senior manager of Subway Operations. “It’s great having a supplier that really makes the Subway brand better. They bring innovation to the Subway brand that puts us in a better place than we were before they joined the team.”

Glen Tellock, chairman and CEO of The Manitowoc Company, explains the Manitowoc Foodservice partnership approach to doing business: “We ask questions like, ‘What is the total cost of ownership? How to make products more water conserving, energy efficiency, easier to clean and easier to support?’” This philosophy leads Manitowoc Foodservice to regularly deliver innovation, like touch screen technology and energy efficient equipment, which solve real operational problems while adding value that operators need.

One example of this approach is seen in the design of Merrychef eikon high-speed ovens. By taking the opportunity to talk with and listen to the customer, Manitowoc took that feedback and developed the Merrychef oven to exceed their expectations in performance, maintenance, and ease-of-use. Technology like touch screens and energy savings are all ideas that came from customer dialogue. 

Manitowoc Ice Indigo series ice machines also provides innovation steeped in customer needs. With patented Luminice Growth Inhibitor to keep the food zone clean, operators are able to extend the cleaning time of the ice machine, without food safety concerns, saving time and money. This technology can lead to savings thousands of dollars each year in labor alone. Indigo series ice machines are also programmable and many are Energy Star rated, creating even further operational savings.

Fred DeLuca, cofounder of one of the world’s most well known brands, died Monday evening at the age of 67, just weeks after celebrating the business’s 50^th anniversary. DeLuca and his business partner, Dr. Peter Buck, opened their submarine sandwich in Connecticut in 1965 when DeLuca was only 17 years old.

In 2013, while traveling around to visit with franchisees, DeLuca fell ill and was ultimately diagnosed with Leukemia. Since that time, he had been receiving treatments and still overseeing the brand as CEO, but recently named his sister, Suzanne Greco, as president to run the day-to-day operations.

DeLuca was an active member of the International Franchise Association and a recipient of numerous awards and accolades. He was a supporter of many charitable organizations focused mainly on those that promoted self-sufficiency and education programs.

He was an extremely ambitious businessman, a bright and analytical thinker, and was even a member of Mensa.

DeLuca leaves behind his wife, sister, son, and members of his extended family: the thousands of team members that make up the Subway brand all over the world. He was always very proud of the work of his headquarters staff and thousands of developers, franchisees, Sandwich Artists, suppliers, and partners who he often and affectionately called “The Greatest Team in Franchising History.”

The world’s largest sandwich brand might emphasize fresh, healthy meals, but Subway is also touting the ABCs of STEM (science, technology, engineering, and mathematics). Through its partnership with the Chicago-based television series “Moochie Kalala Detectives Club,” Subway franchisees are helping turn science lessons into learning adventures for elementary-aged students.

More than 800 independently owned Subway restaurants in northwestern Indiana and the greater Chicago area partnered to sponsor the children’s TV show, which promotes STEM education through its plotlines.

Subway development agent and franchisee JoAnn Bachewicz saw the partnership as a way to delve into a new area of charitable work.

“As times change and as STEM becomes more important, I think it’s important that we are right there to support that,” Bachewicz says. “This gives the local operators a chance to go in and become integrated into the schools.”

According to the STEM Education Coalition, elementary school students spend about 2.6 hours per week on science. It is the goal of Dreaming Tree Films’ “Moochie Kalala Detectives Club” to increase that average amount.

The half-hour show begins with Grandpa, played by former “Saturday Night Live” cast member Tim Kazurinsky, telling his two grandchildren a fantastical story about young detective Moochie Kalala as she learns the truth behind mysteries like how a tornado forms or what Mars is like. The children then go to a local museum to talk with an expert in the field. Through the adventures, children learn scientific facts about space, architecture, the ocean, and more.

Local Subway franchisees provided the funds for 10 science grants of $250 each, which were awarded to local elementary school teachers. The franchisees also helped fund science events and “Moochie Kalala Detectives Club” screenings at 10 public schools.

These events also gave Subway owners an opportunity to build a fruitful relationship with the schools and communities they serve. Franchisees were present at the events to present the grants to teachers. They also brought Subman—the Subway mascot—to the elementary schools to meet and take pictures with students. Children were given apples to snack on, and teachers were provided with a free Subway lunch.

The events coincided with Illinois Gov. Bruce Rauner’s “Science Detectives Week” in May, in which STEM education was supported through educational functions in the schools. The week included science demonstrations and question-and-answer sessions with real scientists.

The partnership was heavily promoted at the store level, with operators talking to their employees and customers about the TV show and its advocacy of STEM education.

“Subway was really doing a great job from the marketing team’s level with connecting the local franchisees with the local schools in their area,” says Kelli Feigley, a producer at Dreaming Tree Films. “A lot of times we’ll do an event and it will be at one place and only impacts a few of the store owners around it. Because this had more of a mass reach, a lot of the franchisees could participate, which I think is great for business.”

Feigley adds that the show positions itself in a sweet spot: Children think of it as a fun television show, while parents see the educational value. She compares the dynamic to Subway restaurants, where kids feel like they are getting a special meal when really they are eating something nutritious.

Another franchisee, Kathy Bentz, says Subway operators are matched up with an advertising agency in their market that puts them in touch with charitable initiatives like “Moochie Kalala Detective Club.” The agencies help guide franchise owners through the logistics of events and promotions.

Bentz says she is proud of the charitable causes that the parent company supports. “Subway attempts to work in many different areas of supporting charities that touch a broad band of people and events, and it’s a nice feeling knowing that we are contributing and making a difference in people’s lives,” she says.

For other quick serves looking to participate in charitable work, Bachewicz suggests owners look right outside their front door.

“Once the owners are involved in the local community, it makes all the difference in the world,” Bachewicz says. “People realize that this is your next-door neighbor’s store, and they are committed to the area. It’s not just about taking profits out; it’s about being part of the community.”

Although the restaurants are independently owned, Bachewicz says, it has become normal for the franchisees in the Chicago area to come together to support causes. In the past, the local Subway stores have sponsored organizations such as the Special Olympics and Little League teams.

Bachewicz adds that the joy of being there to help the children is what matters most. She commends her fellow franchisees like Bentz for taking the time to be present at the schools to present awards and meet with the teachers who earned them.

Ultimately, the grant money funded by Subway franchisees will be used for hands-on science education, such as building a chicken hatchery in the classroom to observe how the animals grow or busing students to the local museums to see exhibits that align with their studies.

“Teachers aren’t often celebrated. Two-hundred-fifty dollars doesn’t seem like a lot, but to a teacher, it’s huge,” Feigley says of the grants that will be used for STEM education. “It’s really amazing, and it’s all because of Subway.”

Fred DeLuca, the legendary founder of Subway and visionary for the franchise business model, died last Monday at the age of 67 after a battle with leukemia.

DeLuca founded Subway when he was only 17 years old and built it into the biggest restaurant company in the world by number of locations. Subway celebrated its 50th anniversary last month, shortly after DeLuca transitioned company leadership to his sister, Suzanne Greco, who was named president.

In the January/February 1998 issue of QSR—the publication’s third overall—DeLuca sat down with then-editor Lea Davis Paul to discuss the sandwich chain’s innovative growth strategy. At the time, Subway had 13,000 locations globally; today, it has more than 44,000. The interview offered a close-up look at the inner workings of Subway’s franchise system, which has been credited with the brand’s phenomenal growth.

The Q&A with DeLuca, below, is presented without edits to showcase Subway’s brand position and strategy at the time of the interview, which was conducted in late 1997.

These days, many of the real growth opportunities in this industry seem to be going to the established multiunit operators. Could you do today what you did as a 17-year-old?

I didn’t approach it with a whole lot of strategy. My thought was to open up a few stores and make some money to pay my way through college. It wasn’t anything like what you see today, the global company with 13,000 stores.

But I think someone could start out today in the same way I did. All I did was open a small store that worked in a given neighborhood, develop some systems, and draw up a plan for expansion that eventually evolved into franchising. That process can very much work today.

When you decided to franchise your young business, did you know what you were getting into?

I didn’t give it enough thought, didn’t even think about it being easy or hard. And the expansion plans weren’t that enormous. When we started, we set a goal of 32 stores in 10 years. After eight years, we had 16 company-owned stores. The question was, How can we get to our goal? We saw Kentucky Fried Chicken growing in our area at that time and knew they were franchised, so I thought maybe we’d franchise to help us get to the goal of 32. We weren’t thinking worldwide or country-wide or even statewide. We were thinking a few people would join us as franchisees and essentially run stores they owned. The thought process wasn’t much more complicated than that. Once we got that foundation down—some franchise owners who could make a living for themselves in the local neighborhood—it enabled us to move out from our home base.

How did those early experiences shape the franchising model you use today?

I think our early operations experience shaped the franchising. Ours were small stores with low investments, simple operations, no cooking, and strong control systems. Those foundations made the stores work, and that’s what enabled us to do the early franchising—it shaped what we taught our new franchisees. The next phase, as we started getting a little larger, was codifying the system. Then we had to develop skills to expand to other markets.

Early on, we came up with a program we call development agents. We kind of invented the program; a lot of companies do something similar now. The basic idea is that if we’re going to have locations far from headquarters, how do we provide local assistance to people? We thought the right approach was to locate someone there who would have a higher level of responsibility and work with people on the local level. The development agent does what is most successfully done in the field; meanwhile, at headquarters, we do what is most successfully done in the central location. That structure has been very helpful and helped us grow in the United States and Canada.

What about when you began international expansion?

We developed a new kind of structure with a small but very critical addition. As we started to go to different countries, the distance wasn’t the factor so much as the cultural differences—new laws, different ways of getting food products. It wasn’t easy for our first franchisees to establish themselves, and there was a lack of understanding at headquarters about the local needs and practicalities. So we added a new kind of employee internationally. They go out and work with the development people, international franchisees, and local markets and act as a go-between for headquarters and the location. They translate requests and get reconciliation.

That structure has helped us open a lot of doors internationally. Two years ago, we might have been in 20 or 25 countries; today, we’re in 62. We’ve planted new seeds in a lot of places, in a pattern similar to our growth in the United States during our franchise expansion days.

Subway has enjoyed phenomenal growth.

Yes, we only crossed the 1,000-store mark in 1987 and today we’ve got 13,000, so we’ve added 12,000 stores in the past decade. It’s been quite rapid growth, fueled by existing franchisees. People sometimes ask me how we could add so many stores, and the answer is because every year 60 percent of our growth comes through existing franchisees. Nowadays, it’s probably as high as 75 or 80 percent.

You’ve named McDonald’s as a role model for growth. What might you want to do differently, in view of their recent challenges?

I think the best thing McDonald’s has done for us is that they’ve gone in new markets and trained people to be regular users of branded food in chain restaurants. That’s opened the door for other chain restaurants like Subway to come in with a different offering. In terms of McDonald’s recent difficulties, I think you have to break out the international and domestic markets. Internationally, I think they’re making a lot of progress; it’s here that they’ve had some difficulties with same-store sales.

But I don’t think these same-store sales have as much to do with growth as they do with changing consumer attributes and the resulting consumer ratings for their food. Today, people are more conscious of nutrition, and I will trace that to a specific event. I saw it happening when they began putting nutrition labels on cans that you and I can read and understand. That now is translating to what people eat outside their homes. Intuitively, they know the kinds of foods served at McDonald’s are not consonant with the nutrition they like to eat, and I think that is creating some difficulty for the chain. There are also quality issues. Over the past couple of years, Burger King has made a lot of market-share gains. The nutrition in their food is probably similar. But I think that Burger King gets a higher attribute rating for many of their products, and their marketing has fueled that. I suspect that McDonald’s will find a solution, and I don’t pretend to have the solution, either.

How do you pass your ambitions for growth on to your franchisees?

I think a franchisee who joins our company with one store naturally thinks about growing the business, building sales, and profit and worth. And if they’re successful, then their thoughts turn to opening a second store, and so on. There’s not a need to pass ambition down so much as there’s a need to make sure there’s an opportunity for franchisees to express their ambitions to grow—meaning if someone is ready to grow with another store, allowing them to do it and facilitating the process. But, there does need to be some restraint. If you allow everybody to grow as fast as they would like, some people will get ahead of themselves, financially or managerially. You don’t have to teach them about growing—they come to the party with that. It’s a matter of helping them along.

At what point could a chain be growing too fast? How did you know when to apply the brakes?

Around 1982, I thought about what the optimum growth rate could be and worked backwards from there. At that time, we had grown to about 200 stores—well beyond our initial goal of 32—and the question was, Just how big can we grow in a country this size? Back then, I was certain that 5,000 stores could be built, but I thought it was possible to reach 10,000. Then the question became, What is the optimum growth rate? It seemed a suitable target would be to add about 1,000 stores each year. That would provide enough velocity to build out the country in a fairly good time frame, and at that time nobody had ever built 1,000 stores per year. In fact, I don’t know if anybody’s done it besides us. McDonald’s might have done it recently. Then the question was how to do it in a way that wouldn’t drain us of resources or capacity. In our case, what we needed in place was facilitators—people who could help the franchisees meet objectives. That meant staffing up in five or six functional areas at headquarters in development groups. We also needed adequate field support to provide the help franchisees needed, so we built up our development agents and office staff.

When was the chain’s growth rate ever a strain?

I can pinpoint one time very clearly: 1987 was a strain for us. The prior year, we had built 400 stores, which was within our capacity, but the following year, we probably had demand to build more than 1,000 stores, but we actually only added about 800. But, that 800 was twice as much as the prior year. That was a strain because we were geared up to build 400–500 but the explosion in demand came and we found ourselves running behind in many of the timetables we like to maintain—bringing people through training fast enough, getting their leases negotiated, developing floor plans, handling equipment orders.

How did you deal with the strain?

Well… [laughing] Basically the solution was pretty straightforward. We had to get more capacity; in this case, we needed people capacity. We hired and trained people who could assist in each of the defined functions: franchise sales group, lease negotiation team, store design group, training group (classroom and in-store), construction assistants, and the equipment leasing group. We just had to really staff up.

In 1987, we did 800 stores, and in 1988 we opened more than 1,000 stores. At that time, I made the judgment that we were going at about the correct pace. The speed felt very comfortable, and there wasn’t any need to go past it. We were on track to reach our goal. Another chain handling a different concept might decide that it’s better to go more slowly. Our operations are extremely simple compared to other foodservice operations, and because of that we have some advantages in developing more quickly.

As it’s expanded, Subway has had its share of territorial complains from franchisees.

Any company that has just a few stores won’t have concerns registered. Franchisees in small chains say, “Let’s build more stores so that we can get famous.” At the other end of the spectrum, the thought process is, “Gee, we have a lot of stores. Is putting more in the wisest thing to do?” There’s the philosophical discussion of “What’s the right number of stores?” And then there’s the specific discussion: “Hey, that franchisee wants to build a store close to mine. I don’t think that’s a good idea.” So while the general discussion goes on forever at a generally low level, the specific stores are what causes anxiety with people.

We’ve developed a site review procedure. Although we are not required to do this in our agreement, we feel the right thing to do is to notify nearby franchisees every time we’re going to negotiate a lease. We send a letter to the four closest franchisees saying we’re proposing opening a store in this location and asking if they have any objections to it. If they have no objections, the store goes through. If they do have objections, we have a review procedure where we interview customers and do field work to estimate the immediate impact on an existing store. If it looks like the initial impact will be high, then we don’t go forward with the store.

What do you consider a significant impact?

If a new store opens and an existing store goes down in sales less than 5 percent during the first week of operations in the new store, that’s not significant because historically we’ve seen that new stores train new customer bases who go on to shop at existing area stores when they travel. But if we see something that is over 10 percent, either in our initial studies or in reality, that is considered quite significant. That’s a large amount to build back up from. New customers are developed and sales do tend to come back [to existing stores], but it’s harder to move from that [10 percent] point. We try to space the stores in such a way that each new store will have a minimal effect on existing stores.

We have a backup plan, too. Because of traffic patterns or the way a community is developing, we could have an initial impact on existing stores that nobody saw coming. Our marketing fund acts as a backup for stores that experience an unexpected downturn when a new store opens. That franchisee applies and gets a three-month marketing budget. If the store hasn’t bounced back, the franchisee can get an extension, and keep getting extensions. We devised that in cooperation with the SFOAC, our Subway Franchise Operators Advisory Council.

How did the council come about?

As we were growing, there were a lot of questions and issues coming up from franchisees. We needed a mechanism so that people could talk among themselves and issues could be brought to the forefront and worked on by management. So about six years ago, we brought in a couple of college professors who had been involved in franchisee organizations. They gave some guidance on ways to put an advisory council together. Our particular method was kind of interesting—we formulated our council through lottery. We divided the Subway world into five territories and said whoever would like to be on the advisory council, put your name in the hat. We got a great turnout in each hat. The council was selected by pulling names, and it’s worked out very, very well. A couple of years later, the national advisory council saw fit to devise regional advisory councils.

Let’s look ahead now. What market trends are you participating for 1998?

Of course, people are eating out more often, and we’re seeing that influence the growth in the number of restaurants. There’s a concern for healthier lifestyles and eating. You’ve probably noticed the low-fat message in our advertising.

Will that continue through 1998?

Yes. We have an interesting situation. We have had to do so little to change our products [to fit the low-fat context] that it’s really not even noticeable. We’ve always had this menu, and we found that when we verbalized the low-fat message to our consumers, we saw a good uptick in our sales. We’re sort of gaining back position in consumers’ minds, and we believe there’s really not another chain that could credibly present that message, or uphold that image. It’s pretty tough for the Burger Kings out there to try to talk about having low-fat meals—even if they went and introduced a line of low-fat products, people would not see that as what they really offer. Another of our competitors is Taco Bell, and they had a low-fat menu [that didn’t do well].

It’s interesting… We discussed this before we started sending the low-fat message to the consumer. The conventional wisdom in the industry was that this doesn’t work. I think the conventional wisdom is right—that it doesn’t work for most situations. But in our case, we already had that image of fresh food because of the way our service is designed—fresh bread, fresh vegetables, fresh assembly at the counter right in front of you. In our consumer research, we were thought of very highly for quality of food and ingredients, so our message of healthiness was credible to the consumer.

What trends won’t you be responding to?

There are a few trends that we’re probably not going to respond to, at least in the short term. I suspect we’ll continue to see an increasing amount of food brought back to the home for consumption, either taken out to finish preparing at home or home delivery. But, the economics of our business doesn’t allow us to offer delivery service on a wide scale. So we’ll just pass on that. We do delivery in a few, very limited markets, but our stores don’t work well with delivery. If you think about a Subway store, they’re pretty small, and they’re designed to run with just one person during slow periods. As soon as you put delivery in, you need a second person.

How much will Subway continue to invest in cobranding?

We’re dealing with cobranding in two forms. First, there’s locating a food operation inside another retailer, which has really made a lot of progress in the United States in the past five years. We’re right in there, doing more and more of that. The other kind of cobranding is with two brands under one roof. We’re doing more of that and researching more opportunities, but we still have a lot of work to do. I think we can expect to see more of that from, for instance, Baskin-Robbins and Dunkin’ Donuts, especially now that they’ve acquired Togo’s. We are making alliances with different companies. Right now, we’re installing a bunch of TCBYs in Subway stores. Our approach will continue to be making alliances with companies that it makes sense to partner with, to fill out dayparts or even with competitors for lunch.

That’s interesting, the idea of pairing up with a daypart competitor.

We’ve got a couple of outlets with Taco Bell, and they work very well for us. Dunkin’ Donuts and TCBY are working well as alliances, too. It’s something we’re going to be doing more of.

You’ll also see us responding to trends in facility size. The average quick-service facility size has been growing smaller for years, as drive-thru business becomes bigger. When you look at cobranding, stores within stores, the average size is declining. We’re already on the low end of the scale with facility size, but over time I think our facility size will decrease also. That doesn’t necessarily mean we’re going to rent smaller spaces, but the type of configuration will yield a lower average store size. Say we go into a c-store, that’s much smaller than the regular store. Of, if we put two brands under one roof, there will be a smaller area per brand.

It’s striking how well suited Subway is—in ways you probably never anticipated—to respond to today’s trends.

It’s true. Sometimes, as they say, you just suddenly wind up in the right place, without any planning. To some extend, we’re the beneficiaries of having the right configuration for trends that came upon us. All told, I think we’ve been pretty fortunate.

Last week, a group of consumer, health, and environmental groups released an antibiotic policy scorecard grading 25 of the largest limited-service brands. The only brands to "pass," according to the report, were Chipotle and Panera with As; Chick-fil-A with a B; and McDonald’s and Dunkin’ Donuts with Cs.

“It’s important to focus on these fast chain restaurants because they are big buyers of meat and poultry, so what these restaurants do will set the tone for what a lot of restaurants can do,” says Kari Hamerschlag, senior program manager for Friends of the Earth, one of the nonprofits involved in the report. “I think that they will lose market share if they don’t make changes in their supply chain.”

The report, “Chain Reaction: How Top Restaurants Rate on Reducing Use of Antibiotics in Their Meat Supply,” is especially timely given the actions of recent brands to clean up their food. In 2015, Panera launched its “No-No List” to remove 150 artificial ingredients; McDonald’s vowed to phase out antibiotics usage in its chicken; Taco Bell and Pizza Hut also went after unnecessary additives; and Chipotle became the first national chain to remove GMOs. These are just a few examples of an overwhelming movement toward cleaner, more natural foods in the limited-service category.

Because this was the inaugural year for the report, Hamerschlag says, the brands were scored on whether they had a good policy in place and whether that information was publically available.

“The reason that that [McDonald’s] got a passing grade, as did Dunkin’ Donuts … is because they both have policies on the books that are good policies,” Hamerschlag says. She adds that while the former has a passing policy on its chicken and the latter for all meats, neither has a concrete deadline for executing those changes. “As companies move to adopt policies, we’ll put more emphasis in the scoring on the implementation. … We want to give companies a lot of credit for adopting good policy, but if they don’t actually implement, then they’re going to see their scores go down over time.” She says that doing surveys like this on an annual basis gives companies something to work toward and show progress.

Although the report singles out the limited-service sector, it might also present an opportunity for the industry to lead others in reducing the use of antibiotics in meat and poultry. In December 2013, the Federal Drug Administration created a voluntary plan to help companies phase out antibiotics; it cited the rise of antibiotic-resistant microbes as a reason to scale back their commonplace application in food production. And while Hamerschlag says lobbyists and legislators have thwarted such changes in the past, change is coming down the pipeline, fueled largely by consumer demands.

“We do think this is going to move the needle,” she says. “There’s just resistance to change across the board until the market says, ‘Listen, we really want this,’ then the producers eventually come around, and they’ll produce what the market wants—more so than meeting regulations.”

By Nicole Duncan