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S U B W AY Can Subway Find Fresh Once Again? Overexpansion, marketing blunders and the death of its founder have crippled Subway. But it can recover — maybe By Liese Klein A corporate giant hides in plain sight among us. It is one of the largest advertisers in the world — spending more than half a billion dollars a year to lure hungry consumers — yet few people outside the fast-food franchise industry know anything about the company. It has its own exit (35) off of I-95 (the most-traveled road in North America), yet few non-employees have ever seen its corporate headquarters. Its unparalleled growth — from one tiny Bridgeport storefront to 44,000 stores in 100 countries — was largely the life's work of one im- probable entrepreneur. Yet few even in Connecti- cut know anything about him, and he is far from a household name. It's the largest chain in the United States (by number of outlets), and although you likely have been in its stores dozens or hundreds of times, you probably don't even know the company's name. e name of the company is Doctors Associ- ates Inc. Doing business as Subway. And it's in trouble. It's in trouble with consumers, who for years have been defecting to healthier competitors such as Panera in the "fast-casual" dining cat- egory. For 2017 U.S. customer traffic to Sub- way stores plunged by as much as 25 percent, according to a corporate memo obtained by the New York Post. And last year marked the fourth consecutive year of declining sales. More ominously, Subway is in trouble with its very lifeblood — its franchisees, who collec- tively own 100 percent of Subway stores (unlike McDonald's, where about one-sixth of stores are corporate-owned). In 2017 Subway's U.S. store count declined by 909 (more than 3 percent of the total) to 25,835, almost three times as many closings as year before (there were 359 U.S. Subway founder and CEO DeLuca: From 'pizza marines' to global domination. 20 n e w h a v e n B I Z | O c t o b e r 2 0 1 8 n e w h a v e n b i z . c o m

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