Industry News | December 19, 2017 | By Danny Klein | QSR Exclusive Brief

Subway's Marketing Exec Resigns Amid Franchisee Concern

Subway's head of marketing for North America has resigned.
flickr: Subway
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Former McDonald’s veteran Karlin Linhardt has resigned from his role as Subway’s North America marketing leader. This comes days after a story surfaced regarding the chain’s decision to revive its $4.99 footlong promotion, a deal that resulted in serious kickback from franchisees across the 40,000-unit system.

The New York Post originally reported the story, which said dozens of franchisees were adding their names to an existing petition asking for the promotion, scheduled for January, to be dropped. Subway has been hosting town hall meetings with regional franchisees to explain how the deal will, in fact, boost profits.

Franchisees have dealt with declining traffic and discount-based hits in recent months. The company closed 359 stores in 2016, which is more than it opened for the first time in its history. Bloomberg said that Subway’s sales fell 1.7 percent in 2016 from $11.5 billion in 2015 to $11.3 billion. The New York Post reported that traffic fell 25 percent over the past five years.

Linhardt worked at McDonald’s from 1995–2005, and also spent a decade with Anheuser-Busch, as well as serving on the board of directors for Perkins & Marie Callender’s Restaurants. Before Subway, Linhardt clocked time as a senior consultant for Accenture, working on Subway’s brand evolution in conjunction with Accenture’s design and construction of the Subway Digital platform.

Linhardt was named Senior Vice President of Marketing for North America at Subway in April, and was tasked “with overseeing North American marketing teams and core disciplines, including advertising, media planning and execution, menu innovation and development, research and analytics, corporate social responsibility, and tactical events and sponsorships,” the company said at the time.

The New York Post said Linhardt was believed to be the driving force behind the $4.99 promotion.

On December 11, Subway announced what it called “a major shift in its marketing strategy.” For the first time in more than 25 years, Subway said it would be consolidating its U.S. and Canadian media and creative business with Dentsu Aegis Network. The plan is set for early 2018 and will include talent across the Dentsu Aegis Network, including Carat NY and mcgarrybowen NY, as well as Carat Canada and DentsuBos.

As Subway said in a press release: “An integrated Dentsu Aegis team of [quick-service restaurant] experts will lead a customer centric, people based marketing approach to help Subway drive its business transformation across the region. The team will grow Subway’s brand vitality with consumers, with talent based in New York, Toronto, and Montreal.”