Specialist
Former senior executive at Subway IP LLC
Agenda
- US sandwich industry competitive landscape, highlighting Subway
- Revitalisation efforts and potential near-term risks
- Franchisor-franchisee dynamics and mid-to-long term growth outlook
Questions
1.
What’s your outlook for the US limited service restaurant industry, looking at what’s upcoming over 2023?
2.
Could you discuss the potential impacts of a deep recession on the US limited service restaurant space?
3.
What are your thoughts on the sandwich category and its relevance in the US? Can you discuss the historical growth of the category? What happened to it mid-pandemic and where do you see it heading from here on out?
4.
What’s your take on some data, from a source called Technomic, that suggested that the sandwich category was in decline or was losing share from 2016 through 2021? Is there a reason to be concerned about some of this market share loss within the sandwich space?
5.
What would explain Subway’s positioning from an AUV [average unit volume] standpoint vs other sandwich concepts that are running at an average of 2x from an AUV standpoint vs Subway?
6.
Could you comment on Subway’s competitive positioning and how the Subway brand image has evolved?
7.
What are your thoughts on how healthy or relatively healthy the Subway franchisee base is or might be, given how the brand has evolved and the company’s competitive positioning?
8.
What are your thoughts on the willingness of existing franchisees to expand their footprints?
9.
What is appealing to specific owner bases that would make them want to grow bigger? Is it favourable economics, or is it just a mindset of bigger is better?
10.
What assumptions can we make about some of the raw input costs on the operating side vs the pre-operating costs for franchisees?
11.
Would you say the economics of the pre-opening investment and even the operating story itself have become more or less favourable? On the operating front, the obvious one has been inflation, so I can’t see that being more favourable. Is there anything within Subway’s control that you find has been much more favourable from a unit economics standpoint?
12.
What do you make of Subway’s menu overhaul, considering the more recent efforts? Is there anything to be extremely positive about and not as positive about?
13.
What are your thoughts on initiatives led by Subway’s recently installed CEO, John Chidsey? Is there anything you see John prioritising? How successful have those initiatives been?
14.
Subway has reportedly gone up for sale or is exploring a potential sale of a USD 10bn valuation. Why USD 10bn? Is there anything we could back into this as to why it might or might not be worth USD 10bn?
15.
Who do you think are the most likely suitors to acquire Subway?
16.
Subway used to dominate the limited service sandwich chain market, and I’m deriving this term specifically from the Technomic Top 500 index. The company peaked at about 41% market share within the limited service sandwich chain market, but then data released in 2020 pointed to this share shifting down to 28%. Assuming that’s on the back of sales challenges and restaurant closures, can you share any other insight here on the underlying factors? Who is Subway losing share to, if it’s not just chalking it up to restaurant closures? To a degree, do you find that to be self inflicted vs just external and out of its control?
17.
What assumptions can we make around who Subway might be losing share to, when we look at its competitive set? Whose offering might be more compelling than Subway’s, and still at the same price point, or with better customer service, or any other features here that we could assume?
18.
If you were to force rank Subway vs its competitors, where would Subway fall in the stack? Where does it fall relative to Jersey Mike’s, Potbelly, Firehouse, etc?
19.
Are any more Subway restaurant closures on the horizon? Looking at some numbers, it seems that an estimated 6,000 units have closed since 2015.
20.
What do you see as the right number for Subway to achieve in the long term when we think about its TAM from a unit standpoint in the US?
21.
What’s your perspective on Subway’s geographic white space in the US specifically? Where do you think it’s likely to emphasise its next leg of growth?
22.
If you owned 100% of Subway today, what would you be most excited about and what might keep you up at night?
