The launch required effort from several groups, including franchisees who assisted with testing, the chain’s independent purchasing co-op, and vendors.
“It was all around the fresh-sliced product in restaurants. We’ve had a history of doing things from a fresh perspective—fresh bread, baked bread, fresh sliced veg, and now freshly sliced meat,” Haynes says. “ … The implementation of it was certainly like an orchestra. There were many minds and many hands working on that for many, many months to source the slicers, test everything out, actually bring the slicers into the system.”
The plan was initially met with skepticism as franchisees thought this meant sliced to order. But the corporate team was quick to correct this and let operators know it would be batch slicing throughout the day. Sliced to order was tested, but it was too slow and labor intensive, Haynes says. Once franchisees understood how the slicer would be used and the fact that they wouldn’t have to pay for the equipment, they were sold. All employees have to do is press a button and the slicing begins. Other than that, it’s changing the dial for various proteins.
Prior to the official unveiling of Deli Heroes, Subway held a training session in Dallas. Attendees took what they learned back to their respective markets and held training rallies. One in Los Angeles brought in 500 people.
“The franchisees understood how this was going to work,” Haynes says. “They understood the supply chain, how that was going to be delivered, and how the proteins were coming to life in the testing. There’s no additional labor needed. We’re already fresh, sliced vegetables every day. There are times throughout the day when staff are not as productive. They’re around to complete this task. So it didn’t add that level of complexity or expense to their business.”
Haynes recalls visiting Ohio where he met with a franchisee that had around 19 restaurants. He placed the slicer in about eight or nine of his stores to see how managers would react. One week went by and nobody commented. When he finally asked how they felt, the response was “Yeah, it’s great. It’s fine. We like it, it’s really easy.” The managers in the other locations began to ask when they were going to get their hands on the equipment.
Among all three menu launches in the past three years, Fabre says the first introduction was the most difficult, just because of the time it took to sort through all the ingredients and moving parts. Once that was established, the Subway Series was a matter of putting together the right pieces. The Deli Heroes are a continuation of that exploratory process.
“I think this one, we already had a lot of the components, like the meat,” Fabre says. “It was really about finding the right combinations and then really about implementation of the slicers and diversification of the supply chain.”
Development Takes a New Turn
Subway’s comeback plan also hinges on renewed growth, which hasn’t been the chain’s strong suit in the past half-decade.
Between the start of 2020 and 2023, the sandwich chain lost a net of 3,200 U.S. restaurants. Although the damage does seem to be softening. Subway closed a net of 1,609 stores in 2020, and that improved to a loss of 1,043 in 2021 and then 571 in 2022.
Haynes attributes the downsizing to shifts in trade areas, like nonviable strip centers or malls. The strategy now is to remove Subway from those situations and relocate them with the right format. Endcap drive-thru and freestanding drive-thru were prototypes that came to Haynes’ mind.
“We’re very much looking at that type of real estate and [drive-thru] format for the future,” Haynes says. “Because it just allows a franchisee to trade 24/7. You can close the lobby and just keep the drive-thru going. In some areas, you find it’s dangerous to keep the restaurants open, whereas, drive-thru, you can trade 24/7.”
Another significant difference is a focus on multi-unit operators as opposed to ones with one or two stores. In February, Subway held a multi-store development seminar in Hollywood, Florida, where it recalibrated how franchisees should think about growing in terms of timing, human capital, and financing. The company is finding that a majority of restaurants that sell internally are moving from retirees to new owners. In April, the brand announced five multi-store agreements across Texas, Florida, Arizona, and the Mid-Atlantic that led to the transfer of more than 230 stores. The transactions included two new operators and one existing franchisee that acquired 100-plus locations to expand their footprint to over 140 outlets.
