Subway (restaurant)
Subway IP LLC,[8] doing business as Subway, is an American multinational fast food restaurant franchise that specializes in submarine sandwiches (subs) and wraps. It was founded by Fred DeLuca and financed by Peter Buck in 1965 as Pete's Super Submarines[9] in Bridgeport, Connecticut. After several name changes, it was renamed Subway in 1972, and a franchise operation began in 1974 with a second restaurant in Wallingford, Connecticut.[10] It has expanded to become a global franchise.
Subway
- Pete's Super Submarines (1965–1968)
- Pete's Subs (1968–1970)
- Pete's Subway (1970–1972)
August 28, 1965 in Bridgeport, Connecticut, U.S.
- Fred DeLuca
- Peter Buck
- Carmela DeLuca[1]
37,000 approx (September 2023)[3]
Worldwide (100+ countries)
- Submarine sandwiches
- Cookies
- Pizzas (some locations)
- Salads
410,000, including franchises (2022)[7]
Subway offers an array of topping choices. The longtime Subway slogan, "Eat Fresh", is intended to indicate the fresh ingredients. It was the fastest-growing franchise in the world in 2015[11] and, as of September 2023, had over 37,000 locations in more than 100 countries and territories. More than half its locations (21,796 or 58.1%) are in the United States.[3][12][13] It also is the largest single-brand restaurant chain, and the largest restaurant operator in the world.[14][15][16][17] Its international headquarters is in Shelton, Connecticut, with a second headquarters in Miami, Florida.
Sponsorships[edit]
Subway has sponsored a number of sports events, particularly NASCAR races, including the Subway 400 (2002–2004), Subway 500 (2003–2007), Subway Fresh 500 (2005–2013) and the Subway Firecracker 250 (2009–2016). Subway sponsored the Subway Super Series ice hockey tournament from 2009 to 2014. In September 2022, Subway secured a three-year partnership deal with Football Australia for the naming rights of the men's national football teams as the Subway Socceroos, Subway Olyroos, Subway Young Socceroos, and Subway Joeys. The deal also includes Subway becoming the official partner of the Matildas and the Australia Cup.[101]
Animal welfare[edit]
In December 2015, Subway released a commitment to move to a 100% cage-free egg supply chain in North America by 2025.[102]
In April 2017, Subway released a chicken welfare policy[103] that states that by 2024 or sooner, 100% of its U.S. chicken products will be produced in alignment with Global Animal Partnership (GAP) standards for higher welfare breeds, enhanced living environments (including lighting, litter, and enrichment), increased activity levels and optimized stocking density, and improved slaughter methods. To ensure compliance, Subway's chicken suppliers will be third-party audited with updates communicated annually.[104]
The policy announcement followed a nationwide campaign led by high school animal activist Lia Hyman in coordination with the animal protection NGO The Humane League.[105] On April 20, 2017, Hyman and a group of activists traveled to Subway's global headquarters in Connecticut to deliver more than 53,000 signatures from campaign supporters and held a demonstration outside the building after they were denied entry.[106]
Controversies[edit]
Hepatitis A contamination[edit]
In September 1999, at least 32 customers in Seattle contracted hepatitis A after eating food contaminated with the virus at two Subway outlets.[107] The virus, which is spread by eating or drinking food or water contaminated with infected feces, infects the liver causing nausea, vomiting, diarrhea, fatigue, and fever.[108] Subsequent investigations found that staff failed to adhere to thorough hand washing and the use of plastic gloves during food preparation.[109] A class-action lawsuit on behalf of 31 victims was resolved for $1.6 million.[110][111] The most seriously affected victim—a 6-year-old boy—suffered acute liver failure and required a liver transplant. He was awarded $10 million in an out-of-court settlement in 2001.[109] A previous outbreak of hepatitis A in 1996 had also involved a Subway outlet in Seattle, although no legal action had resulted.[107]
In April 2015, the Arkansas Department of Health issued a warning to the public that customers who had eaten at the Subway outlet in Morrilton, Arkansas, may have been exposed to infection after an employee tested positive for the virus.[112][113]
Sandwich size[edit]
On February 2, 2007, KNXV-TV (with the help of the Arizona Department of Weights and Measures) reported that three of Subway's "Giant Sub" sandwiches, normally each 3 feet (91 cm) long, were actually only 2 ft 8 in, 2 ft 8+1⁄4 in, and 2 ft 8+1⁄2 in (81, 81.9, and 82.6 cm) long. Under Arizona regulations, objects cannot be more than 3% shorter than their advertised length; a "three-foot" sub must be at least 2 feet 10.92 inches (88.70 cm) long. The report also showed the boxes designed to store these sandwiches were 2 feet 10+3⁄4 inches (88.3 cm) in length; shorter than the maximum allowable variance. In response to the report, Subway said it was reevaluating its advertising, training, and packaging materials with regard to the specific or implied length of Giant Subs and was advising its franchisees to only discuss with customers the approximate number of expected servings and not a specific length of measurement.[114]
In January 2013, an Australian teen, Matt Corby, complained on Facebook that Subway's "footlong" sandwich was only 11 inches (28 cm) long, rather than 1 foot (30 cm). Subway responded by saying, "With regards to the size of the bread and calling it a footlong, 'Subway Footlong' is a registered trademark as a descriptive name for the sub sold in Subway Restaurants and not intended to be a measurement of length." Discovery during a subsequent class-action lawsuit revealed that most Subway sandwiches were the advertised length. A $530,000 settlement was thrown out of court in 2017 for being "utterly worthless" to consumers.[115][116]
Franchise relations[edit]
In 1995, Subway Sandwich Shops, Fred DeLuca, Peter Buck, and Doctor's Associates Inc. were held liable for breach of contract. An Illinois jury awarded more than $10 million in damages to Nicholas and Victoria Jannotta after finding lease and contract violations. The plaintiffs claimed the defendants had misrepresented the asset value of Subway Sandwich Shops (a leasing company used by Doctor's Associates for franchising purposes) while negotiating a 1985 lease agreement.[117]
The U.S. House of Representatives' small business committee studied the franchise industry from 1992 to 1998. Dean Sagar noted, "Subway is the biggest problem in franchising and emerges as one of the key examples of every abuse you can think of."[118] In 1989, the U.S. Small Business Administration refused small business loans to Subway franchise owners until Subway removed a contract clause which gave it the power to seize and purchase any franchise without cause. The Dallas Morning News reported Subway had seized American soldier Leon Batie Jr.'s Subway stores in 2006 while he was serving in Afghanistan.[119] He had been deployed to support Operation Enduring Freedom in March 2005, three years after buying his first restaurant.[119] Batie alleged Subway had violated the U.S. Servicemembers Civil Relief Act. He filed a federal lawsuit against Subway, which was dismissed. He then filed suit in state court in Dallas County, Texas. Both parties settled on "mutually agreeable" and confidential terms in January 2010.[120]
United Kingdom VAT treatment[edit]
In October 2010, Subway franchisees in the United Kingdom lost a high court appeal against paying standard VAT on all toasted subs, as required by HM Revenue and Customs. Thus, in the United Kingdom, a toasted sub attracts VAT, whereas a cold sub, eaten off the premises, does not. Competitors such as Quiznos and McDonald's do not pay VAT on similar food.[121][122][123]
In March 2012, Chancellor of the Exchequer, George Osborne announced plans to close the loophole that allows Subway competitors to offer hot food without paying VAT. This legislation was expected to come into force from October 2012 onward,[124] but on May 28, 2012, the government withdrew plans to charge VAT on originally hot food being allowed to cool naturally.[125] In June 2012, Subway launched the "Toast the Tax" campaign to put pressure on the government to drop VAT on toasted sandwiches, as it has done for hot savouries.[126]
Footlong trademark disputes[edit]
On January 31, 2011, Subway lawyer Valerie Pochron wrote to Casey's General Stores, a chain of Iowa-based convenience stores, demanding that the small chain cease using the term "footlong" in advertisements for its 12-inch sandwiches. Subway threatened to sue. Consequently, in February 2011, Casey's General Stores Inc. filed a petition in a U.S. District Court in Des Moines, seeking a legal declaration that the word "footlong" does not violate Subway's rights.[127] Casey's further sought a declaration that the word "footlong" is a generic description of a sandwich measuring one foot.[128][129] Before serving its complaint on Subway, Casey's voluntarily dismissed its action, ending the litigation.[130]
Subway's trademark application for "footlong" has yet to be approved by the federal government. Subway has attempted to register it with the United States Patent and Trademark Office twice. It filed on November 8, 2007,[131] and June 4, 2009.[132] Both filings have been abandoned, on November 20, 2013, and August 21, 2014, respectively. Yum Brands (KFC, Pizza Hut, Taco Bell, and non-Canadian A&W locations), Long John Silver's, and other competitors opposed the applications.[127]
Ingredients[edit]
Subway removed azodicarbonamide from its bread after food blogger and activist Vani Hari gathered more than 50,000 signatures in a petition drive.[133] Before Vani Hari's petition, Subway had used azodicarbonamide as a bread conditioner, to whiten the dough and allow sandwich bread to bake more quickly. As of 2016, the ingredient was still used by other fast food restaurants.[134]
In August 2015, Vani Hari again petitioned Subway in conjunction with Natural Resources Defense Council, Friends of the Earth, the Center for Food Safety, U.S. Public Interest Research Group to commit to buying meat produced without the routine use of antibiotics and to provide a timeline for doing so.[135] In October 2015, Subway announced it would transition to chicken raised without antibiotics in 2016 and turkey within the following 2–3 years, and would also transition beef and pork raised without antibiotics by 2025.[136][137]
In 2020, the Supreme Court of Ireland ruled that Subway bread had too high a sugar content to be classed as bread for VAT reasons, with its recipe including sugar equal to 10% of the weight of the flour.[138]
In 2021, a lawsuit was filed against the company alleging that the ingredient Subway bills as "tuna" was a mixture of "various concoctions that do not constitute tuna, yet have been blended together by defendants to imitate the appearance of tuna". The company's senior director for global food safety and quality said in a statement that "Our restaurants receive pure tuna, mix it with mayonnaise and serve on a freshly made sandwich to our guests."[139] The investigative TV show Inside Edition sent samples of Subway's tuna salad to Applied Food Technologies, a Florida company that carries out DNA testing of seafood. According to that company, "Yes, we confirmed that tuna was definitely in all three samples we received."[140] Subway established a website, SubwayTunaFacts.com, to refute the claims that they did not use real tuna, which they have denied unambiguously.[141]
Soy protein in chicken products[edit]
In an investigation by the Canadian Broadcasting Corporation (CBC)'s consumer affairs television series Marketplace aired in February 2017, chicken from five fast-food restaurants was lab-tested to determine constituents. While DNA testing found between 84.9% and 89.4% of the DNA from other restaurants' chicken products to be chicken DNA, with the remaining being unidentifiable plant DNA, on the two Subway chicken items tested, 53.6% and 42.8% of the DNA was found to be chicken, with the remainder being mostly soy. Although ingredients listings did show soy protein to be a constituent of both of the chicken products, Subway states that the proportion is less than or equal to 1% and that the finding of about 50% soy DNA is not representative of the actual amount of soy in the product. Subway has called CBC's report "absolutely false and misleading" and demanded that it be retracted. Meanwhile, however, Subway Canada stated that it was investigating with its supplier to ensure that the proportion of soy protein was as per expectations.[142][143][144][145][146]
According to Subway's website, U.S. stores' ingredients may differ from those in Canadian stores. Both countries include soy protein in chicken strips, but only the U.S. version states that it is present in quantities of 2% or less. The Canadian version includes soy as an ingredient in its chicken patty, but the United States version does not.[147]
In April 2017, Subway sued the CBC, as well as the reporter and two producers, for $210 million, alleging the CBC acted "recklessly and maliciously" and that "these false statements... were published and republished, maliciously and without just cause or excuse, to a global audience, which has resulted in pecuniary loss to the plaintiffs." The CBC stood by its reports, stating that the DNA tests were done by independent and credible experts.[148] The CBC's Emma Bédard stated that Subway had not provided an alternative explanation for the DNA test results obtained by the CBC.[149]
In November 2019, Subway's lawsuit against the CBC was dismissed through anti-SLAPP legislation, as CBC's reporting was deemed to be a matter of public interest.[150][151] In January 2021 the Ontario Court of Appeal overturned the decision dismissing the lawsuit. The Supreme Court of Canada denied leave for appeal, so the matter has been returned to the Superior Court of Justice for trial.[152]
Underpaying workers[edit]
In 2019, the Fair Work Ombudsman found that 17 Australian-based Subway franchises had underpaid workers.[153] The lengthy investigation by the Ombudsman specifically found that franchises failed to pay the employees minimum wages, casual loadings, holiday and overtime rates, and did not issue proper pay slips or keep proper employment records.[153] The investigation resulted in over $81,000 being recovered in unpaid wages for over 160 employees.[153] Subway responded by introducing a rolling audit of franchisee employment records and commented that franchise agreements could be terminated if franchisees failed to meet Australian workplace laws and Subway's internal standards of operation.[153]
Calls for boycott over the Russian invasion of Ukraine[edit]
Following the 2022 Russian invasion of Ukraine, Subway was criticized for not divesting or scaling back its operations in Russia, unlike most of its competitors.[154][155][156] Subway issued a statement saying its corporate office does not own any of the 446 Subway stores in Russia, and issued a statement saying, "In addition to working with our franchisees across Europe to provide meals to refugees, we will redirect any profits from operations in Russia to humanitarian efforts supporting Ukrainians who have been affected by the war. Our restaurants in Russia are all independently owned and operated by local franchisees and managed by an independent master franchisee."[157] Nevertheless, Ukraine's National Agency on Corruption Prevention stated that Subway continues advertising in Russia and collecting payments from its Russian franchisees, and listed Subway among International Sponsors of War in January 2024.[158]
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