- Subway has hired John Chidsey, formerly the chairman and CEO of Burger King Holdings, as CEO effective Nov. 18, the company announced in a press release Wednesday.
- Chidsey also previously served as president and CFO of Burger King.
- Chidsey fills the sandwich chain's top position, which hasn't had a permanent leader since Suzanne Greco retired last summer.
Greco's three-year tenure was marked by sliding sales and franchisee frustration, and the outlook for the beleaguered chain isn't much sunnier as Chidsey takes the helm.
The QSR has closed more than 2,300 stores over the past three years, including more than 1,000 in 2018, double the closures it forecast for the year. Its U.S. unit count also fell below 25,000 last year for the first time since 2011, according to the New York Post.
The chain's relationship with franchisees, which was already fractured, continues to decline. Just this week, Subway operators told the Post that the chain is now enforcing 20-year franchise agreements for the first time in an attempt to stem store closures. The company now also requires franchisees who choose not to renew their five-year leases to complete a corporate questionnaire to find a replacement to run the location, the Post reported. In May, operators claimed that Subway was targeting stores for minor infractions to shutter stores and restructure its system.
The new lease enforcement, however, suggests that Subway is backing off mass closures in its bid to return to growth. It will be interesting to see if Chidsey continues to lead the chain down this path. A Wall Street Journal headline from 2008 hails him as the "Man Behind Burger King Turnaround," detailing the chain's "barbell" menu strategy that promoted both premium and budget menu items to help turn the brand around.
But the restaurant market has changed significantly in the past decade, with market saturation and labor inflation wounding much healthier brands than Subway. The sandwich brand's issues are serious enough that they could prove financially dire if mishandled, so Chidsey faces an uphill battle.
Subway has also weathered a slew of other executive changes of late, with new VPs of North American operations, global development and marketing strategy and a permanent CMO. Collectively, Chidsey's hire and these additions suggest that the chain is preparing for a turnaround. The question now is how long these new leaders will stay.
Karlin Lindhardt left Subway as SVP of marketing in 2017 after less than a year on the job, a move that analysts connected to franchisee frustration over $5 footlong promotions. With the chain planning to remodel about 40% of its stores by 2020, operator ire could come to a head once again. The chain launched a grant program this summer to relieve some of the financial constraints on operators, but it may be too little to late. Between internal tension and a cut-throat QSR market, Chidsey will have his hands full trying to get the chain back on track.