Subway, the foot-long sandwich chain which has been on a mission to revamp itself for many years, rolled out deli slicers to its American restaurants last year at a cost of $80 million. Some franchisees have "mixed reviews" on the devices and their effect on business.
"It’s really mixed reviews among people," North American Association of Subway Franchisees (NAASF) told FOX Business in an interview. "People are pretty neutral on it or negative on it. And the negativity isn’t that it’s a bad thing in terms of what we’re providing to customers, but we have some additional costs that are affecting our profitability."
Subway gifted the slicers to U.S. locations in 2023, aiming at moving away from pre-sliced meats.
They have been in stores in some parts of the country "for almost a year now," but NAASF and franchisees that belong to the group "haven’t seen any numbers from headquarters as to if this is a really good thing and is driving our sales and customer counts," Mathis said.
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Restaurant Business earlier reported on the slicers and franchisee sentiments about them.
Some franchisees who belong to NAASF have spent more on labor in connection to the slicers, the NAASF chairman said. He attributed it to the "additional time" required to slice the meat in-store and to maintain the cleanliness of the machines.
Despite the meats themselves going down in price, there is also costly food waste from end cuts, Mathis said, noting, "Some lower volume stores have to cut the entire log and if they don’t use it within the specified guidelines for food safety, they need to throw it away."
"As a natural next step in Subway’s transformation journey, we rolled out automatic meat slicers to restaurants across the U.S. – elevating the quality of our protein offerings even further. The slicer and installation was provided at no cost to the franchisee as it was an effort to deliver better food and a better guest experience," a Subway spokesperson told FOX Business. "Consumer research shows that slicers improve the perception and taste of the product, and franchisees have told us that they are easy to use, and streamline the labor previously needed to prepare the meat."
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Some franchisees have praised the slicers.
"The fact that our slicers are visible has already built trust and increased positive sentiment amongst our guests," Ohio franchisee Jonathan Tolliver said in a statement to FOX Business. "From a labor perspective, the slicers make preparing proteins easier on employees and I haven’t heard any complaints that they would rather go back to individually stacking proteins."
"Overall, both employee and guest reactions to the slicers have been very positive in our 28 locations. Many in our company agree that it puts us on a similar playing field as many of the competitors in the sandwich QSR space," Pennsylvania franchisee Cory St. Esprit also said, adding it "was the right move for Subway and many franchisees I interact with on a daily basis would agree."
Prior to the slicers, some measures Subway implemented as part of its revamp included a slew of updates to its ingredients in 2021 and the "Subway Series" menu in 2022.
Mathis said the 2021 menu and ingredient changes were a "good thing" that "needed to be done" and "really kind of changed the direction" of where Subway was going. Subway "did a fantastic job with that," he said.
U.S. restaurants have also had to undergo facelifts every seven years. While stores do need to be up-to-date, such renovations can be financially difficult for franchise owners depending on their sales volumes and how far into their franchise agreement they are.
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Subway has made grants available to franchisees over the years to help with the store remodels, according to reports.
The company recently said its 2023 same-store sales globally saw a year-over-year increase of 6.4%. CEO John Chidsey tied the growth to menu innovation, restaurant remodels and digital investments while appearing Monday on FOX Business.
Looking further into 2024 and in the next couple of years, Chidsey said Subway plans to keep pursuing menu innovation "around value, crave," increasing its international presence, remodeling stores and other measures.
