Modern Marketing Brand Strategy Subway

Firehouse Subs gears up to scorch Subway


By Kendra Clark | Senior Reporter

November 17, 2021 | 10 min read

As Subway suffers shutdowns and struggles to modernize, other quick-service and fast-casual sandwich chains – including Firehouse Subs and Jersey Mike’s – lifted sales and opened new locations during the pandemic. So which one is poised to secure the meat of the market?

Sandwich floating against yellow background

The sandwich wars are getting toasty

This week, Restaurant Brands International (RBI) – owner of Burger King and Popeyes – announced it has inked a deal worth $1bn to acquire sandwich chain Firehouse Subs. Stock prices for RBI surged in response.

Expanding its portfolio of brands could help RBI compete with the likes of Yum Brands, which owns Taco Bell, Pizza Hut and KFC. Research published last month by, a consumer data insights firm, indicates that Yum Brands outpaced RBI in terms of both revenue and total transactions throughout the pandemic – from January 2020 to September 2021.

The move could also help RBI secure a larger portion of the valuable and fast-growing sandwich category. But gearing up to face category heavyweights such as Subway and Jimmy John’s is no easy task. Still, Firehouse is showing promising growth – while other category players are riddled by pandemic predicaments.

Firehouse is on fire

In particular, RBI has been stung by the chicken sandwich wars. Though Popeyes was a pioneer of the memeable battle – which began in earnest in the late summer of 2019 – McDonald’s, KFC and other big chains have gotten in on the hype and stolen large chunks of market share from RBI. Meanwhile, RBI’s crown jewel, Burger King, has been faltering; Wendy’s knocked Burger King down to the No. 3 spot in the category last year and the company struggled to maintain its revenue growth pattern during the pandemic.

With Firehouse, RBI hopes to regain some steam. In comparison with RBI brands’ lukewarm performance, Firehouse Subs has seen same-store sales jump 20% from pre-pandemic levels between January and October of this year, per a statement by RBI.

It’s also worth noting that Firehouse has done an exceptional job at adapting its operations model and tech stack to the demands of off-premises sales, which include drive-thru, takeout and delivery orders. “Off-premises was a smaller portion of their sales ahead of the pandemic, and then of course with the pandemic [it’s become] the majority of their business,” says Sam Oches, group editorial director at The Restaurant & Food Group, a media company that owns a handful of food and beverage industry publications including Nation’s Restaurant News, Food Management and Restaurant Hospitality. “That’s just an example of how Firehouse Subs was able to go through this transition. They were able to adapt through this season of the pandemic [and enter] the world of, ‘We can serve our product to any customer conveniently from anywhere we want; we have direct access to our customers through our online platform, our app or loyalty program. We know a lot about them, and we don’t need them to come and put their butt in a seat in order to make money off of them.’”

In a statement put out about the deal, RBI’s chief executive Joce Cil said: “We see tremendous potential to accelerate US and international growth at Firehouse Subs with RBI’s development expertise, global franchisee network and digital capabilities.”

Experts agree that Firehouse could help RBI deliver on these goals. Danny Klein, editorial director at Food News Media and publisher of QSR and FSR magazines, two restaurant industry publications, says: “There are really two parts of this deal that flash for Firehouse.” For one, Firehouse could help RBI bring specialty menu items such as sandwiches into new markets. “Firehouse has 47 stores in Canada producing average-unit volumes above system averages. RBI has more than 4,500 units in that market, home to Tim Hortons. In China, there’s zero Firehouses, [but] RBI operates 1,620 units. So that runway is something Firehouse is definitely going to chase.”

The second point, Klein says, is that with acquisitions comes resource-sharing. “One of the reasons brands are consolidating of late is a rush to share resources and white-label options. RBI has an in-house tech stack, including loyalty programs and a CRM engine, plus in-house delivery, a broad third-party footprint [and] digital menu boards. All of these things can prove incremental for Firehouse and its franchisees in time as they look to expand.”

It seems things could be looking up for RBI soon. Still, Firehouse Subs is far from the category leader. As far as fast-casual and quick-service sandwich restaurants go, Subway remains the definitive leader. Last year, the company rang in 8,318m system-wide sales. Its nearest sandwich competitor, Panera, saw 5,500m – though with soups and salads on its menus, Panera is a far shot from reaching the sandwich domination of Subway. Jimmy John’s came in fourth place, recording 1,925m system-wide sales for 2020. Interestingly, Firehouse Subs sits at a comfortable sixth place, behind independently-owned Jersey Mike’s and just ahead of RBI’s own Tim Hortons.

Inside Subway’s subpar performance

Despite its dominance, Subway – which operates some 41,600 locations across more than 100 countries and territories – has run into trouble in recent years. The Restaurant & Food Group’s Oches says it’s unclear what caused the chain’s downturn, but that it may have been linked to the 2015 death of founder Fred DeLuca. Following his death, DeLuca’s sister Suzanne Greco briefly took over, only to retire in 2018.

“There was just a lot of turnover at the corporate level,” Oches says. “There was just a ton of volatility in that business. And when you have a lot of volatility – and have a lot of franchisees [that] maybe are not set up to succeed in this business – then you’re gonna experience the kind of closures that they did.”

Oches says that the company had been too focused on expanding its locations without investing in the resources to support such rapid expansion on either the corporate or individual franchise levels. Even before the onset of Covid, Subway had been closing its stores at a rate of thousands per year. In 2020, it shut down between 2,200 and 2,400 locations. Against the backdrop of Subway’s struggle, and with growing demand for sandwiches in general, players including Jersey Mike’s and Firehouse Subs were able to steal significant market share. In November and December of last year, Firehouse’s revenues momentarily surpassed Subway’s, per exclusive data from

After revamping its menu items and investing in rebranding, however, the category leader is looking up. Most notably, the company in July launched its ‘Eat Fresh Refresh’ initiative – a new spin on its longtime slogan ‘Eat Fresh’ – to revamp its menu, bringing in new ingredients including Black Forest ham, steak, hickory-smoked bacon, smashed avocado and a parmesan vinaigrette. Just yesterday, Subway announced it is ringing in the holiday season with a slew of additional menu additions, which include a chicken and bacon ranch sub, a Baja chicken and bacon sub, a caramel brownie cookie and more.

“[These] moves have been smart in that I think they’re really trying to modernize Subway [as a brand] and elevate it to the point that its competitors are at,” Oches says. “Still, when you think about the fact that there are some really high quality sandwiches out there, Subway is going to continue to struggle if that’s what people are looking for. It’s going to continue to be the value player in the sandwich space.”

Gauging the rest of the industry

Subway is not the only one that has faced trouble in recent times. Inspire Brands’ Jimmy John’s has seen year-on-year sales tank for two years straight. It closed around 90 of its approximately 3,000 locations in 2020.

In an attempt to bounce back, the company took a similar approach to Subway: it invested more in product development and revamped its menus. Plus, in an effort to generate excitement around the brand, it shelled out an estimated $5.5m on a coveted 30-second Super Bowl spot in February. And most notably, from a strategic point of view, the company stopped relying on executive ‘gut feelings’ to lead its decision-making process and adopted a more data-driven approach. President James North told Franchise Times in May: “I have resources today that we never had before. We didn’t know what we didn’t know. We had this incredible founder who had this great taste and this great vision, but what Inspire [Brands] helped to bring to the table was the data analytics. We were able to give our decisions more confidence.”

Meanwhile, Jersey Mike’s has fared more like Firehouse over the last year and a half. The independently-owned New Jersey-based chain – which holds the No. 5 spot in the category, just behind Jimmy John’s – invested in innovation and was able to expand by a net of 190 new locations in 2020. The company adapted to Covid challenges at speed, debuting tech upgrades and remodels that cost about $75,000 per location. Its revenue, while not publicly disclosed, is believed to have grown heftily.

While Subway scrambles to retain its stronghold in the market, smaller chains including Jersey Mike’s and Firehouse Subs have fully capitalized on growth opportunities enabled by tech adaptability and innovation. Based on current trends, the category leaderboard could be significantly shaken up in the coming year or so.

Ultimately, sandwiches are doing as well as ever. “​​The sandwich category has been incredibly lucky to skate through this pandemic more or less intact – it barely made a blip on a lot of these brands,” says Oches. “The pandemic ... forced every restaurant into doing delivery and takeout and digital ordering and all that jazz, and sandwiches were perfectly positioned to be able to capitalize on that. Sandwiches are such a universal menu item. They travel super well. From the broader standpoint of how this category is doing, it’s doing very well – remarkably well – compared to many other categories coming out of the pandemic.”

Firehouse Subs, Subway, Jimmy John’s and Jersey Mike’s did not respond to requests for comment.

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