$5 Footlongs Turbocharge Subway.

Posted by truecreek on November 6, 2009 under More Dam News | Be the First to Comment

Franchisee’s obscure idea turns sandwich maker into national phenomenon

By Matthew Boyle

Stuart Frankel isn’t what you’d call a power player in the world of franchising. Five years ago he owned two small Subway sandwich shops at either end of Miami’s Jackson Memorial Hospital.

After noticing that sales sagged on weekends, he came up with an idea: He would offer every footlong sandwich (the chain also sells 6-inch versions) on Saturday and Sunday for $5, about a buck less than the usual price. “I like round numbers,” says Frankel, a brusque New Yorker who moved to Miami in 1972 and owned a drugstore before opening his first Subway outlet in 1988.

Turkey breast, ham & swiss and salami sandwiches
Customers liked his round number, too. Instead of dealing with idle employees and weak sales, Frankel suddenly had lines out the door. Sales rose by double digits. Nobody, least of all Frankel, knew it at the time, but he had stumbled on a concept that has unexpectedly morphed from a short-term gimmick into a national phenomenon that has turbocharged Subway’s performance. “There are only a few times when a chain has been able to scramble up the whole industry, and this is one of them,” says Jeffrey T. Davis, president of restaurant consultancy Sandelman & Associates. “It’s huge.”

In fact, the $3.8 billion in sales generated nationwide by the $5 footlong alone placed it among the top 10 fast-food brands in the U.S. for the year ended in August, according to NPD Group. That puts the $5 menu’s success just a notch behind KFC and ahead of Arby’s and Domino’s Pizza. It helped privately held Subway, of Milford, Conn., lift U.S. sales 17 percent last year at a time when most restaurant chains, save for industry leader McDonald’s, struggled.

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