THE BOTTOM LINE
HERE ARE 4 IDEAS FOR SUBWAY'S NEXT CEO
O n Tuesday, Subway announced the retirement of John Chidsey, who will be replaced by Carrie Walsh on an in- terim basis as the fast-food sandwich giant searches for a permanent replacement. Chidsey’s departure is unsurprising and, in fact, was probably inevitable from the moment the fast-food sandwich giant signed ink to paper on its sale to Roark Capital. Chidsey has long been believed to be in the job largely to fix the chain and get it ready for sale. But the task of “fixing” Subway is not done. While the closure rate of the chain’s U.S. stores has slowed, operators are still closing locations. And this year has been a particular challenge as consumers have shifted away from dining at fast-food restaurants. Whoever ultimately takes over for Chidsey, be they Walsh or some to-be-named chief executive, will have some further work to do to get the brand on proper footing. Fortunately, or perhaps unfortunately depending on your perspective, I have some thoughts on what that new CEO should do. REPAIR RELATIONS WITH FRANCHISEES Initial comments from Subway operators on Chidsey’s departure were not, shall we say, positive on his accomplish- ments. “He ruined the value of our businesses,” one operator said. “Our stores are worth a fifth of what they were in 2019.” It’s not necessarily Chidsey’s, or even Subway’s, fault for at least some of that decline. Inflation and higher interest rates have lowered restaurant industry valuations almost across the board. But the company does have some of the industry’s lowest franchisee valuations, according to data presented at the THE BOTTOM LINE: THE RETIREMENT OF JOHN CHIDSEY WAS NOT SURPRISING GIVEN THE SANDWICH GIANT’S SALE TO ROARK CAPITAL. WHOEVER TAKES OVER WILL HAVE A LOT TO DO. SO HERE ARE A FEW IDEAS, STARTING WITH FIXING RELATIONS WITH OPERATORS. BY JONATHAN MAZE
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RESTAURANT BUSINESS JANUARY 2025
PHOTO COURTESY: SUBWAY
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