⛫ Sandwiches & Growth

Apologies for the late send here! A summer weekend filled with a Knicks championship, World Cup festivities, and friends wedding celebrations kept me plenty busy.

You can hire accounting, sales, marketing, customer service, or operations pros for 70% less than local hires - in just days.

They work with numerous multi-unit franchisees and franchisors - enabling efficiency that frees up your best people to focus on the highest leverage work.

Note: I put the Y-Axis on a logarithmic scale, as the line was hovering on the X-axis for nearly the whole chart when set to linear

Subway began franchising in 1974 when they had about 14 locations. Led by long-time CEO and co-founder Fred DeLuca, growth was the main goal, and grow they did.

By 1988, Subway already had ~2,200 locations globally (most were in the U.S. though), and ~$360M+ in systemwide revenue.

> Those were the days when we’d open a Subway and there’s literally lines around the block.

That quote is from Bill Mathis, a longtime Subway franchisee who joined the brand in 1992 (more about him below).

Subway was truly the dominant sandwich chain for decades, and Bill backed that up with tangible examples.

Meanwhile, the remaining 3 franchises that make up the “Big 4” of the sandwich world today, were barely underway:

• Jersey Mike’s: didn’t begin franchising until 1987

• Jimmy John’s: only began franchising in 1993

• Firehouse Subs: was FOUNDED in 1994, and franchised a year later

There were of course others along the way in different regions (Clarks, Blimpies, etc.) and Quiznos had their own infamous rise & fall.

But despite Subway’s growth as a brand on a location basis, and major head start compared to the other brands with longevity….they have the weakest unit level economics today.

A good reminder that the leadership at the franchisor level, over a long enough timeline, can massively dictate the ceiling of your success.

Bill Mathis joined Subway in 1992 as an employee and, by 2001, was a franchise owner himself.

At his peak, he owned four stores, but today he still has 3 locations, while he’s also a franchisee in Caribou Coffee.

Bill gives us an insider perspective on so many moments that are famous within the QSR landscape:

• The $5 footlong launch (and how it almost never happened)

• The sandwich wars with Quiznos (Coca-Cola helped Subway)

• The early days when their organic traffic was off the charts

• The Jared Fogle debacle and the decade of hardship that’s followed

• Why he’s still a franchisee and wants to remain with the brand

Checking in on 7 Brew The drive-thru coffee chain has reached 777 units so far and has more than 250 stores in its pipeline

Zaxbys hires Waffle House Vet as CDO Russell Holland, who has served as interim CDO since February, will support the chain’s aggressive growth as it expands past 1,000 units

Marriott acquires Italian Brand Through a joint venture with the founders of Lefay, Marriott has brought the luxury wellness brand into its system