Subway designates dual HQ in Florida
Subway has designated Miami as its dual headquarters, in confirming the move of its existing headquarters office to Shelton from Milford where it was long based under its late cofounder Fred DeLuca.
After hiring John Chidsey as CEO in 2019, Subway subsequently announced it would move 10 percent of Milford’s corporate jobs to Miami where Chidsey lives. Subway described the new location at the time as a corporate office, rather than a headquarters address.
But in confirming plans on Monday to move the Milford office to Shelton as reported last week by Hearst Connecticut Media, Subway is now designating Miami as a second headquarters.
Under Chidsey, Subway has overhauled its menu and marketing, and continues to spend for celebrity endorsements including by Stephen Curry, who led the Golden State Warriors to this year’s NBA title.
With a canal-side home in Coral Gables, Fla., Chidsey chose an office near Miami International Airport as a new corporate office for Subway. The New York Post reported the lease in June 2020, eight months after Subway hired Chidsey.
“Connecticut has been home to Subway since the company was founded in 1965,” Chidsey stated in a Monday news release announcing the Shelton move. “From what began in Milford and continues in Shelton, we are pleased to strengthen our commitment to the region as we look to the future of the brand.”
In the news release, Subway indicated “consumer-facing functions” are now based in Miami and that the office will provide better integration with its Independent Purchasing Cooperative that sells food and supplies to franchisees.
In 2018, a similar split for the corporate offices of Edible Arrangements resulted in a headquarters move to
Atlanta from Wallingford. At its peak, Edible Arrangements was the second largest franchiser based in Connecticut after Subway.
Since it began franchising in 1974, Subway has become perhaps Connecticut’s best-known export, with more than 20,750 locations in the United States alone. DeLuca stepped down as CEO in advance of his 2015 death after a battle with leukemia, with co-founder Peter Buck of Danbury dying in November 2021 at age 90.
Long a fixture under DeLuca on top of Entrepreneur magazine’s Franchise 500, Subway has lost momentum in recent years on the influential list for would-be franchisees. Rival Jersey Mike’s ranked fourth on this year’s list, with Subway missing the cut entirely.
In a May interview with CNBC, Chidsey discussed initiatives he described as intended to change Subway’s corporate culture for the better, including recruiting senior executives and managers from other quick-service restaurant chains. Today, only 30 percent of Subway’s senior corporate staff are holdovers from before his tenure as CEO, Chidsey told CNBC.
“I wanted experience from outside Subway, whether it was from within QSR or just franchising in general — no matter what the industry is,” Chidsey told CNBC. “So yes, it was very much an intentional ‘bring-inas-many-new-people-as-possible.’ It was a bit of a bloated organization so we slimmed it down dramatically.”
Subway’s corporate profits totaled $43 million last year on revenue of $823 million, according to a filing with the state of Minnesota, with revenue off 15 percent from 2019 prior to the COVID-19 pandemic.
Those totals do not include revenue attributed to the owner-operators of its franchised restaurants. Technomic estimates total receipts at $9.4 billion last year, ranking Subway in the top 10 chains by U.S. revenue that year according to the trade publication Restaurant Business, one slot behind Burger King where Chidsey was previously CEO.
In the first quarter of 2022, Subway tacked on another $7.3 million in earnings on $196 million in corporate revenue. For the pandemic year of 2020, revenue dipped to $689 million according to the Minnesota filing, but the company stayed in the black that year with $7.5 million in profits.
While Subway has made gains in corporate profits, it has nettled some franchisees who say those earnings are coming at their expense. Chidsey acknowledged what is at stake for Subway franchisees in the context of his decision to push ahead aggressively for new ideas and operating policies, during the CNBC interview last month.
“Franchisees are out there ... their livelihoods depending on what we do, so you have to be accountable,” Chidsey said. “Sometimes I think maybe I went faster than the system was able to absorb it, and if I had been a little bit slower it might have gone down a little bit better. But I still stand behind the decisions we made.”