Subway’s reconfigured Sub Club is getting another reconfiguration.
The fast-food sandwich giant is ending its fourth-footlong-free program on April 1 and will convert into a solely points-based system.
According to a document from Subway North American President Damien Harmon, and seen by Restaurant Business, the new program is “an interim solution” as the company works with its franchise advisory council “on the next evolution of Sub Club.”
In the meantime, the company starting on Feb. 23 will not allow customers to earn stamps on discounted subs. Customers will not be able to earn stamps if they buy discounted sandwiches or the company’s Fresh Value Meals.
Customers who earned free subs before Feb. 23 will have 12 months from the date earned to redeem their free sandwiches.
Customers who earn free subs from Feb. 23 to March 31 will have 60 days to redeem their free subs.
Customers were notified of the changes on Wednesday.
Subway launched its Sub Club in December with one of the restaurant industry’s most aggressive sets of customer rewards. Members of the program can earn a free footlong sub once they buy three. The company reimbursed franchisees for part of the cost of the free subs.
Franchisees complained almost immediately, noting that the program was more than twice as generous as the previous iteration of the club, which ended in 2005. That program, which included paper stamps, gave customers a free 6-inch with the purchase of four footlong subs or eight 6-inch sandwiches.
One franchisee called it “financial suicide.” Several other franchisees in internal company forums and to Restaurant Business have complained about the program.
A group of Subway franchisees, the North American Association of Subway Franchisees, collected signatures from franchisees representing more than 5,000 locations calling for changes to the program. The company told Restaurant Business at the time that the program was off to “a strong start.” The association had also asked for changes to the program.
Subway has not responded to requests for comment on Wednesday.
Franchisees were concerned about the potential that the program would drain profits at a time when many operators are walking away from their restaurants once leases are up. More than a quarter of the chain’s restaurants have closed since 2015, taking the company from more than 27,000 locations to about 19,000 today.
According to the internal message, the program was “a bold, breakthrough offer” that ultimately brought more than 1 million new members to the company’s loyalty program. But, “we have clearer visibility into what’s working, and where we need to adjust to ensure the program is sustainable for you while remaining valuable for guests.”
Subway will still call its loyalty program the “Sub Club,” but it will simply be a more traditional program in which customers collect points and get rewards. Customers will no longer earn new stamps starting on April 1 and no more free footlong rewards will be issued after that date.
UPDATE: This story has been updated with additional detail.
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