Dive Brief:
- Subway CEO John Chidsey will retire at the end of the year after five years in the position, the company said Tuesday.
- The chain appointed Carrie Walsh, current president of Europe, Middle East and Africa and former global chief marketing officer, as interim CEO while the company conducts a search for Chidsey’s successor.
- Chidsey was the chain’s first CEO from outside the founding family. He helped lead a multi-year turnaround of the business. In the last three years Subway signed over 10,000 restaurant commitments globally. The chain also has undergone several menu refreshes and has been remodeling its stores with digital menu boards and self-order kiosks.
Dive Insight:
Prior to Chidsey joining Subway in 2019, the chain closed over 2,000 stores in the United States over a three-year span, dropping its domestic unit count to below 25,000 for the first time in nearly 10 years. Subway’s relationship with franchisees was contentious, and many operators accused the chain of targeting them for minor infractions in an attempt to put them out of business and restructure the system.
Under Chidsey’s leadership, the company has undergone significant changes. The chain sold itself to Roark for nearly $10 billion in a transaction that closed earlier this year. Subway shifted its focus from single-unit operators to well capitalized multi-unit operators and master franchisees to support growth. It signed one of its biggest deals ever for 4,000 units in China. Subway is now on track to more than double its new restaurant openings this year compared to 2019, according to the release announcing Chidsey’s departure.
Menu innovation has been a key strategy under Chidsey, who led Burger King through a turnaround using both premium and budget menu items. In 2022, the brand undertook its biggest menu update in its history with the Subway Series, a dozen sandwiches that could be ordered by name or number, which contributed to positive same-store sales in North America. This came roughly a year after its Eat Fresh Refresh, a program that included over 20 menu updates. And this year, the chain extended into the snacking category with Subway Sidekicks, helping drive sales and traffic.
But the chain is still facing struggles. Subway’s average unit volume has long languished around $500,000, making margin growth difficult to come by. According to Reuters, the chain initially struggled to attract multi-unit operators because of those low margins. Some of its franchisees have also faced legal problems recently. A 48-unit Subway franchisee declared bankruptcy earlier this year after a judge ordered the operator to pay $3 million in a wrongful death suit.
The chain also launched a $6.99 6-inch Meal Deal on Nov. 3 that promotion was expected to run through the end of the year but did not meet initial expectations. The chain will end the deal in stores on Wednesday and shift to an online only deal through Dec. 26, according to Restaurant Business.
Walsh comes into her interim position with over 20 years of experience in restaurant, retail and consumer industries, including work at Yum Brands, Pizza Hut and PepsiCo. Since joining the chain in 2019, Walsh has “played a pivotal role in elevating the brand’s U.S. and global perception and driving the company’s strategic direction,” the company said.
Walsh helped bring back many lapsed and new guests as global chief marketing officer. In 2023, she was appointed president in EMEA, the chain’s second-largest region where she oversees operations, finance, marketing and development activities across 50 countries and territories.
“Carrie is uniquely qualified to lead Subway through this transition, bringing a blend of expertise in global operations, brand innovation and digital transformation, which will bring continuity and support Subway's next chapter,” Clay Harmon, member of the Subway board of directors, said in a statement.
Chidsey will take on a consulting position to ensure a seamless transition. He will help guide the chain’s international growth strategy and master franchisee relationships.
