Subway’s second-biggest executive leaves as auction stalls: sources
Subway said its second-biggest manager will leave the fast-food giant even as a lengthy auction by the company continues to stall.
The Miami-based sandwich chain said Tuesday in a memo to franchisees that North American President Trevor Haynes will be leaving the company by the end of the year, Subway said in a press release Wednesday.
Haynes will be succeeded September 5 by Douglas Fry, a McDonald’s and Kraft Heinz veteran who joined the company two years ago and currently oversees Subway’s operations in Canada.
“For the remainder of the year, Fry and Haynes will work closely to ensure a smooth transition, with Haynes taking on a strategic advisory role,” the company said in a statement.
According to Subway’s website, Haynes, who is responsible for the growth, expansion and profitability of the Subway brand in the US, “was the inspiration for Subway,” said a major franchisee who asked not to be identified.
Haynes — who ranks as Subway’s second-highest executive — was also the first non-founding family member to lead Subway as acting CEO, from May 2018 to November 2019.
The chain replaced Haynes with current CEO John Chidsey, a former Burger King exec who has recently been pressuring franchisees to remodel stores on their own, though sources say he’s pushing for a sale.
“Trevor has played a critical role in shaping the brand’s vision, strengthening our position in the marketplace and enriching the lives of our guests, franchisees and employees,” Chidsey said in a statement.
Subway announced Wednesday that its sales have risen for the 10th straight month as the chain revamped its menu, remodeled stores and added sports stars like Tom Brady, Steph Curry and Megan Rapinoe – the latter falling miserably for the chain two years ago backfired.
“The results of the Subway Series launch and the positive response from guests and franchisees demonstrate that our transformation strategy is working,” Haynes said in an October press release.
Still, Subway put itself up for sale in February and has yet to find a buyer willing to come close to matching its original asking price of $10 billion, sources said.
Subway has been trying to convince admirers that the chain has turned the tide and is gaining momentum. However, applicants have expressed concerns that the chain does not own any of its approximately 37,000 restaurants and about half of them are losing money, sources said.
Subway generates almost all of its revenue from collecting 8% of its revenue from royalties.
Last month, Subway named Katie Pesce director of field operations for the Northeast, including the New York City area. In an email to the more than 1,000 restaurants she oversees this month, Pesce admitted she had little experience with Subway before recently joining the chain.
“To be perfectly honest, I wasn’t a regular before I joined Subway,” Pesce wrote. “After the second or third sub and the third cookie, I learned why there is such a cult following.”
“That email was oddly condescending,” said one franchisee. “She has no idea what we’re doing.”
According to sources, Subway is primarily urging franchisees to remodel their stores and keep them open longer.
Subway’s average restaurant sales fell 24% after adjusting for inflation from 2012 to 2022, Restaurant Business Magazine reported. In comparison, McDonald’s is up 11%.
