Subway’s CEO, Who Stepped Up After Tragedy, to Retire
Subway’s chief executive Suzanne Greco, sister of the late founder Fred DeLuca, was replaced yesterday by interim CEO Trevor Haynes. “Like Fred, Subway is in my blood,” she told Franchise Times last fall.
Suzanne Greco’s retirement from Subway, announced yesterday, ends her tenure as chief executive of the world’s largest restaurant company, a position she took after the death of her brother and company founder Fred DeLuca in 2015 left the company reeling.
“Everybody was in a period of mourning and shock. They had lost the founder and leader they’d relied on for 50 years. That takes a long time to get over,”Joe Tripodi, Subway’s chief marketing officer, told Franchise Times in a story by Julie Bennett last October.
Trevor Haynes, chief business development officer at Subway, was named interim CEO effective May 2. Greco will officially retire June 30, and then will serve as senior adviser to the company.
Greco was scheduled to deliver the keynote address at the Franchise Finance & Growth Conference, presented by Franchise Times, May 7 at the Mirage hotel in Las Vegas. Subway's CFO David Worrell will replace her at the annual event.
Greco grew up working in her brother’s restaurants, which today number more than 43,700 worldwide, and returned to Subway after college, in 1987, at the corporate office. “No one ever forced me to be here,”Greco told Bennett. “I grew up with Subway and I wanted to be part of the team. Like Fred, Subway is in my blood.”
Her task was daunting. Subway closed more than 800 restaurants last year and this year plans to close 500. In 2016, Bennett reported, Subway closed more stores in the United States than it opened and the average unit volumes of its 26,741 U.S. stores dropped to $421,000, while rivals like Jimmy John’s, Jersey Mike’s and Firehouse Subs gained units and reached AUVs of $650,000 or more.
Hiring key executives was a major part of Greco’s turnaround plan, but her biggest mark on the company was the new Fresh Forward design. Greco put it this way: “When I took over, we decided to make the largest investment in brand history to build an infrastructure with highly experienced talent to support our franchisees.”
“It is our strategic plan to improve every consumer touch point, beginning with the look and feel of the restaurant. Our new Fresh Forward design brings to life what we have always had—healthy, fresh vegetables. We are integrating new technology to make us more accessible to the consumer and leveraging all of this into a new image.”
Rohit and Raghu Marwaha, Subway franchisees in California, said last fall sales were up 8 percent at their Chula Vista, California, Fresh Forward location. “Subway is a family enterprise from the top to the bottom. Suzanne comes from a similar story and she has a vision that will take us into the next decades,” said Rohit Marwaha.
Don Rottinghaus, who owns 392 Subways, told Bennett, ““I’ve gotten to work with Suzanne over the years on brand initiatives. When you get down to the nitty-gritty, she’s as tough as Fred was, but she has more style and is a bit more hands off.”
Smaller franchisees, however, were hurting. “You have to remember that Subway’s reported annual revenues of $420,000 a year are an average,” said Steve Sager, a franchisee with 13 stores in south Florida, in the Franchise Times article. “A couple of my stores are taking in almost twice that much, which means other franchisees may have revenues as low as $250,000 a year. Some franchisees are hurting really badly.”
An all-out revolt by franchisees last year over Subway’s $5 footlong promotion, and a public letter meant for Subway franchisees from a rival brand, Freshii, are also part of Greco’s recent tenure. “Rather than risking the closure of another 900 Subway stores in 2018, let’s explore a partnership. Let’s work together to convert select Subway stores to Freshii restaurants,”said the letter, signed by founder and CEO Matthew Corrin.
Greco appeared in February on behalf of the DeLuca family foundation at the start of the International Franchise Association’s NextGen competition, which is aimed at encouraging a younger generation in franchising. Her family foundation is a major supporter of the NextGen initiative.