Dive Brief:
- Subway is undergoing a major overhaul of company leadership as two executives are set to retire and one is leaving due to a restructuring of the company's organization, reports Restaurant Business.
- Chief Development Officer Don Fertman is retiring after 39 years at the company and will remain as a consultant through the end of next year. Vice President of Global Development Bill McCane will take his place. Chief Financial Officer Dave Worroll is set to retire after 30 years with the company and will be replaced by Ben Wells.
- Senior Vice President for International Ian Martin is leaving at the end of the year due to reorganization.
Dive Insight:
Subway has been undergoing a major shakeup with its executive leadership, including naming a new CEO after a year-long wait. The brand also hired a new chief marketing officer, Carrie Walsh, to spearhead a turnaround for the sandwich chain. With these three leadership exits, CEO John Chidsey appears to be wasting no time when it comes to making changes at the brand. Whether the reshuffling of executive leadership will be too disruptive for the brand or the exact dose of fresh talent it needs remains to be seen.
Chidsey may benefit from having new leadership in supporting executive positions as the brand embarks on a turnaround. He took the helm of a chain that's struggling to compete after overexpansion required it to close over 1,000 locations last year. Disputes with franchisees about matters like contract terms and the $5 footlong promotion added extra tension for the brand, and some have suggested that former SVP of marketing Karlin Lindhardt left the company in 2017 after eight short months as a result of some of the spats.
A few other brands are under new executive leadership this year, including McDonald's, which appointed Chirs Kempczinski following Steve Easterbrook's firing around the same time that Subway installed Chidsey. Like Subway, McDonald's is dealing with franchisee frustration and other challenges like sexual harassment and minimum wage disputes. The new CEO also faces skepticism from shareholders, who enjoyed 150% increase in returns. Red Robin also hired a new CEO, Paul Murphy, to help the chain fight sluggish sales. Murphy previously helped ailing Noodles rebound from a slump with four consecutive quarters of same-store growth.
Despite the rough waters, Subway has been attempting to take a new course towards more digital offerings. It launched its Fresh Forward initiative two years ago to add digital components like self-service kiosks, mobile payment options and pickup areas. It's also engaging in an aggressive remodel of 40% of its stores and has rolled out a grant program to assist franchise operators with the high costs of renovation. It's also planning to cut prices in January, which has some franchisees dismayed over the impact it will have on their existing profits.
