During the big story on Sunday’s “Last Week Tonight,” host John Oliver focused on the damage caused by Subway’s constant expansion over the past 50 years.
The sandwich chain restaurant is currently the biggest of its kind in the U.S. and, for a time, was the biggest in the world. However, despite the various chains in the country, thousands of locations have closed.
Furthermore, the restaurant’s franchisees, people, or businesses who own and manage specific locations are suffering. The HBO host stated that unlike McDonalds, which tends to owned by investment firms, Subway franchisees are often individuals or families instead due to their location costs a fraction of what it costs to open a McDonald’s.
Oliver illustrated that opening a Subway location costs a fraction of what it costs to open a McDonald’s. As a result, Subway franchisees are often individuals or families instead of investment firms, which tend to own McDonald’s locations.
“Your instinct might be to now never go to your local Subway,” Oliver said. “It might have been your instinct before this segment began, and honestly, it remains a good one.”
“But it’s worth remembering that some have spent their life savings on these stores, believing the promise that they could be their own boss, and are now stuck in a business model that was stacked against them from the start.”
Furthermore, the comedian pointed out that Subways bring in far less money than other chain restaurants. The sandwich chain, on average, brings in about half as much as a Jimmy John’s location and about 14 percent of what a McDonald’s makes in a year.
Oliver also stated that franchisees must pay corporate 12.5 percent of their gross sales instead of the eight percent McDonald’s requires.
“Come on, Subway,” Oliver said. “You are the one who made your new logo two arrows 69ing each other. The call is coming from inside the house here.”
Eduardo Razo is the Assistant Content Editor for BNM, which includes writing daily news stories on the news media industry. He can be found on Twitter @eddierazo_ or you can reach him by email at eddie1991razo@gmail.com.
