Subway, once the reigning behemoth of the quick-service restaurant establishment, was in trouble, its staying power severely tested. From shrinking footprint to PR disasters, the sandwich giant appeared to be fading. But with new leadership and a dramatic strategic turnaround, Subway has achieved a miraculous turnaround, posting a 9.2% sales gain in 2022 and two consecutive years of all-time performance. This article delves deep into the most significant elements of the Subway turnaround, from how menu innovation, technological innovation, and strategic partnerships have reenergized the brand as it recovers from existing setbacks.
A Brand in Crisis: Subway’s Downfall
Subway’s dominance at the top of the fast-food market was unchallenged, with 27,103 American stores at its peak. But the mid-2010s were less friendly. The 2015 death of co-founder Fred DeLuca left a leadership vacuum, driven by the legal woes of former spokesman Jared Fogle, which sullied the brand’s image. Subway’s American store count in 2021 had dwindled by 22%, falling to 21,147 locations. Competitors like Chipotle capitalized on that vulnerability, capturing market share with trendier, fresher offerings.
Consumer sentiment shifted as well. Subway’s build-a-sandwich concept, its greatest asset, began to feel old as individuals clamored for quality ingredients and streamlined experiences. Execution problems, like inconsistent store quality and an old-fashioned aesthetic, further damaged Subway’s reputation. The brand needed a drastic overhaul to get its footing again in a congested category.
A New Era Under John Chidsey
The turning point arrived in 2019, when John Chidsey became CEO, the first non-family member to take the helm. Chidsey brought a fresh strategy, utilizing his experience as a seasoned executive to guide the company in a new direction. His plan centered on three priorities: menu innovation, digital transformation, and physical renovation. These strategic shifts were designed to restore customer trust, fuel operational efficiency, and position Subway for long-term success.
Chidsey’s style was a departure from the norm, a sign that Subway would soon be changing. His approach was fact-based but pragmatic, stressing the necessity of positioning the brand with changing consumer trends. Focusing on quality, convenience, and interaction, Chidsey laid the groundwork for Subway’s turnaround.
Menu Innovation: The Eat Fresh Refresh and Subway Series
Eat Fresh Refresh: A Bold Menu Overhaul
In July 2021, Subway launched the “Eat Fresh Refresh” campaign, a watershed moment in its transformation. The campaign introduced over 20 menu updates with new ingredients like artisan breads, high-end meats, and fresh vegetables. The campaign’s goal was to increase Subway’s quality of offerings, pushing back against accusations of stale or uninspired options. Fresh subs, like the Turkey Cali Club, introduced bold flavors with high-quality ingredients, attracting health-conscious and flavor-seeking consumers alike.
The impact was almost immediate. August 2021 was the best month for Subway in 2013 financially, and same-store sales showed an incredible surge. The renovation not only brought the customers to its door once again but also made Subway a quality- and freshness-focused brand again.
Subway Series: Making the Experience Easy
Building on this momentum, Subway introduced the “Subway Series” in July 2022, the largest menu launch the company has ever done. It introduced 12 signature sandwiches into four categories: Cheesesteaks, Italianos, Chicken, and Club. There were three carefully curated sandwiches in every category, pre-curated to simplify ordering. Now customers could order by name or number, moving away from the time-consuming customization model that had been Subway’s signature for decades.
This simplified approach was groundbreaking. The Subway Series drove craveability and quality perception, internal reports indicated. Same-store sales grew 7.4% over the eight-week debut versus the Eat Fresh Refresh launch in 2021. Sales rose over 12% for the top three quartiles of restaurants—about 15,000 units. By Q3 2022, same-store sales grew 8.4%, September alone 11% year-over-year, and top quartiles close to 18% increase.
Digital Transformation: Reaching Customers Where They Are
Subway’s reversal wasn’t on its menu alone. The company also made a strong digital transformation to catch up with the evolving consumer behavior. Digital sales at Subway have increased over threefold since 2019, with double-digit year-over-year growth in sales across the globe. This is due to investing in online ordering, mobile apps, and rewards programs like Subway MVP Rewards.
Breakthrough shops like Subway Grab & Go and intelligent refrigerators have expanded access, reaching on-the-go customers in other channels like offices and convenience stores. These initiatives complement convenience without violating Subway’s value of freshly made, customizable food. The digital push has been a key driver of sales, proving that Subway can flourish in an even more technology-based business.
Strategic Partnerships: Cultural Relevance with Happy Gilmore 2
Subway’s comeback also extends beyond operations to new marketing. A such outstanding example is its partnership with Netflix for Happy Gilmore 2, out July 25, 2025. Subsequent to Subway’s memorable cameo in the original 1996 movie, the partnership includes the “Happy Gilmore Meal,” which is available from July 10, 2025, at all U.S. and Canada locations. For an additional $1, guests can purchase a meal upgrade to receive one of four limited-time collectible cups featuring Happy Gilmore and Shooter McGavin, designed by artist Mickey Duzyj.
The partnership also introduced “Subway’s Happy Place,” a digital immersive experience accessible through a code on meal packaging or on SubwayHappyPlace.com. This site provides video clips, games, and sweepstakes with more than $1 million in prizes, including a personalized golf cart, branded merchandise, and a grand prize golf resort vacation. MVP Rewards members also receive bonus entries, increasing engagement. The campaign not only taps into nostalgia but also makes Subway a culturally relevant brand, engaging fans through common pop culture experiences.
Bringing the Physical Experience into the Digital Age
Subway growth also includes significant investment in its physical presence. Through the end of 2022, nearly 8,500 North American restaurants had been remodeled, with 2,600 remodels completed in a single year. 2023 developments include another 3,600 remodels, with a new clean, inviting appearance to erase the old-fashioned image of older stores. These remodels complement Subway’s “Smart Growth” plan, which emphasizes tremendous locations, formats, and franchisee support.
The remodels enhance the in-store experience, and the stores become more functional and desirable. The move is also strategic since Subway is eyeing a potential sale valued at over $10 billion. An updated portfolio makes the brand more attractive for investors since it shows that the company is focused on long-term profitability.
Financial Performance: Turnaround Success
Subway’s financial results capture the success of the company’s turnaround. The company recorded an 8.4% same-store sales increase in Q3 and September sales of nearly 11% year-over-year during 2022. Even better growth was seen in the company’s top three quartiles of restaurants, which increased 13.8% and 18% for Q3 and September, respectively. Record highs for the decade were achieved in weekly average unit volumes (AUV), and same-store sales rose 7.8% for the year, its eighth consecutive quarter of gains.
While price raises contributed to these gains, Subway says its increases are in line with industry trends. Improved profitability and operating efficiency have left the brand in a stronger position with franchisees and potential purchasers, further entrenching its competitive position.
Ongoing Challenges and Future Outlook
Despite its success, Subway has its issues. Some stores, in Walmart centers, city centers, and universities, are struggling with post-pandemic foot traffic. The “Smart Growth” plan addresses that by closing or relocating underperforming stores and partnering with veteran franchisees. Internationally, Subway is expanding strategically with over 5,300 future restaurant commitments reserved through master franchise agreements.
Forward, Subway’s focus on menu innovation, digital interaction, and updating positions the company for long-term growth. The company’s nimbleness in keeping up with consumer trends be it premium ingredients, easy ordering, or cultural partnerships is a testament to its resiliency. As Subway continues its evolution, it offers a compelling case study in the ability of vision and bold action to rejuvenate a legacy brand.
Conclusion
Subway’s journey from collapse to rebirth is a vote of confidence in the power of reinvention. Through innovation in the menu, digitalization, and strategic partnerships, the brand has recaptured its position in the quick-service market. With a revitalized footprint, solid financials, and emphasis on guest experience, Subway is not just treading water but thriving. In seeking to conquer lingering challenges and explore new prospects, Subway’s transformation offers an example of the means by which successful brands can evolve and flourish in a changing marketplace.
