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The rise and very steep fall of Subway:
How the Jared Fogle paedophile scandal and controversy over 'tunagate' shattered the fortunes of the world's largest fast-food chain as it explores a $10B sale
Subway, which erupted into the world's largest fast-food chain by 2015, has been marred by controversies over its ingredients and spokesperson in recent years.
https://www.dailymail.co.uk/news/article-11628649/The-rise-steep-fall-Subway-Jared-Fogle-pedophile-scandal-controversy-tunagate.html
Subway, which erupted into the world's largest fast-food chain by 2015, has been marred by controversies over its ingredients and spokesperson in recent years.
https://www.dailymail.co.uk/news/article-11628649/The-rise-steep-fall-Subway-Jared-Fogle-pedophile-scandal-controversy-tunagate.html
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Started with 1 shop, and a $1,000 loan.
Now just got 21,000 shops/franchises, and worth a paltry $10 Billion. And, amongst their thousands of employees, they once employed a pervert.
Where did it all go wrong?
The boom carried on until 2015, but then everything started to go wrong for the sandwich-making giant.
He is due to be released in 2029, and has admitted he 'royally screwed up' when he committed the child sex crimes.
That August, Fogle pleaded guilty to a child **** charge and paying for sex with an underaged girl after traveling from Indiana to New York City.
That September, DeLuca passed away after a two-year battle with leukemia, adding to the strain on his daughter, Suzanne Greco, who took the reins in 2013 following his diagnosis.
In 2016, Subway's explosive growth finally caught up with it as it closed more chains than it actually opened, seeing a net loss of nearly 500 stores.
The decline continued into 2019, when John Chidsey, the former CEO of Burger King, was named the new head of Subway, the first person in the position not related to the founding families.
Chidsey noted that Subway appeared more interested in having the most franchises than actually running the company with profits on the mind.
Chidsey came in slashing corporate staff, renegotiating contracts, shutting down franchises, and revamping its menu, which started to garner criticisms over its ingredients.
In 2020, Ireland's Supreme Court ruled that Subway sandwiches are too sugary to be classed as 'bread' and therefore are not liable for tax exemption.
The scrutiny came after years of fighting off its 2014 'yoga mat' bread scandal, which showed Subway had been using chemical found in rubber and plastic on its bread.
That year also saw the company suffering heavy losses amid the pandemic, with nearly 1,800 franchises lost.
Then in 2021, Subway faced a class-action lawsuit claiming it was misrepresenting its tuna sandwiches, with lab analysis repeatedly showing the meals had no tuna DNA.
The tests prove that the ‘tuna’ is actually a ‘mixture of various concoctions that do not constitute tuna, yet have been blended together by [Subway] to imitate the appearance of tuna,’ according to the complaint filed against the company.
A judge rejected Subway's request to dismiss the lawsuit in July, with the case being reviewed in the US District Court for the Northern District of California before heading to trial.
The company also faces another lawsuit accusing it of exploiting immigrants and victimizing franchisees, sometimes pushing them to financial ruin.
The lawsuit alleges that the sandwich giant has focused on recruiting mainly Asian immigrants who believed they were about to experience the American Dream once they owned a potentially lucrative and popular franchise of their own.
The smaller investment in order to get started can often attract someone who might be less well-educated, particularly in English and basic math, according to the lawsuit.
It alleges that the owners of some of the larger outlets, are given information in order to prey and target on smaller, vulnerable Subway franchise operators.