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Some SoCal Subway franchisees frustrated by $5 footlong deal

The store front of a Subway restaurant franchise.
The store front of a Subway restaurant franchise.
Flickr user Dennis Hurd (Creative Commons)

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Subway restaurants re-started a promotion on Monday for $5 sandwiches. It's a great deal for customers, but for franchise owners it may be a footlong too far.

"The price of the sandwich also includes the labor, the real estate costs, all kinds of overhead," says Nancy Luna, who covers restaurants for the OC Register

The deal, created by the chain's headquarters, is meant to drive traffic to stores because January is traditionally a slow time of year.

But franchises say the price leaves them with a thin profit margin that doesn't help cover basic operating costs.

"Ultimately Subway can't make them participate," she says, "but the problem is that there's nothing worse than a customer scorned."

Luna reports that some Southern California outlets will choose to not honor the deal, including those owned by franchisee Bob Grewal.

“There are franchisees upset about the deal. And, they have a right to be,” he said in an interview with her.

He estimates about 90 percent of his franchise stores in Orange County and the greater Los Angeles area will sell the discounted subs.