![]() Within the first 2 weeks, Frankel saw his sales jump from $14k to $23k per week - more than 4x what the average Subway shop brought in.įrankel gradually grew his local empire to 10 Subway shops and implemented his $5 promo at other locations with similar success. He slapped up a few crude signs in the window, not expecting much. “Every Saturday and Sunday, we’re going to sell all our footlongs for $5 each instead of $6.” “I sat down with my manager and said we’re going to try something different,” he told The Hustle in a recent interview. Over the next decade, he built several Subway shops in South Florida, including two near a bustling hospital.īusiness was good, but he felt he needed some kind of differentiator - a gimmick to take things up a notch. And like many franchisees, Frankel saw an opportunity to claim a stake in the fast-growing chain. Launched in 1965 by 17-year-old Fred DeLuca, Subway settled on a franchising model in 1974, leasing out the right to use its branding to individual shop owners across the US.īy 1988, the business had expanded to 2.2k shops and $360m in annual sales. Unsubscribe whenever.Īt the time, Subway was a relative newcomer to the scene. ![]() Please try again!ĭelivered weekdays plus a bonus Sunday feature. Stuart Frankel in the early 2000s (Screenshot via Fox Business) After stints running a drug store and a video outlet, he decided to try his hand at slinging sandwiches. Twenty years earlier, in 1988, an enterprising fellow named Stuart Frankel bought his first Subway franchise in Miami.Ī tell-it-like-it-is New Yorker, Frankel had migrated to Florida with his wife in the ‘70s. But it’s also a parable about the oft-conflicting goals of small business owners and large corporations. This is the story of a promotion gone very right, and then very wrong. As inflation drove up the cost of doing business, the $5 footlong became financially unsustainable for many of the independent entrepreneurs who owned the company’s eateries. It was, according to many industry analysts, one of the most successful promotions in the history of American cuisine.īut the deal wasn’t so hot for Subway’s franchisees.Įager to grow at all costs, Subway refused to let the promotion die. Revenue from $5 footlongs alone topped $3.8B. Within a year, foot traffic skyrocketed across the franchise’s thousands of locations. The promotion was a smash hit with cash-strapped customers during the recession - and its jingle (“ five-, five-, five-dollar footlong…”) became the company’s calling card. In 2008, Subway introduced a tantalizing deal: For just $5, one could purchase any “footlong” (12-inch) sandwich.
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