A Subway Hero: The Creator of the $5 Footlong

By Features FOXBusiness

Subway’s $5 footlong alone has raked in $3.8 billion in sales for the private company.

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This hero discount was the brainchild of small-business owner Stuart Frankel, a subway franchisee. Frankel opened his first Subway in 1988 in Fort Lauderdale, Florida, but said he didn’t come up with the $5 deal until 2004, when weekend business started to slump.

“It is a giant leap of faith by thousands of people,” said Frankel. “It could have just as easily not have worked. It is one idea but thousands make it successful. It is important to note that this doesn’t happen in a vacuum. ”

Frankel’s homegrown idea has become a popular campaign for the entire Subway company.

Q: How did you come up with the idea of the $5 footlong?

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Frankel: In 2004, we had a very high-volume store but it … slowed on the weekends. We always tried things differently. We made a nice price point of $5, and within two weeks, we saw everything going up. The price before that was a dollar and a half more. [We made the price] $4.67 so it came out to $5 even with tax.

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Q: How long did it take for this to become a national campaign?

Frankel: It languished for three years. We provided information to other Subways. It got to corporate in 2007 when I was asked to take over another store in Fort Lauderdale.
I didn’t end up taking over the store, but the store owner used my $5 footlong idea and his sales doubled. Another franchisee saw the signs and within 2 weeks, he put it in his stores and his sales went up 25%. The founder of subway lives in the area and he saw it, and he took the idea nationally.

Q: After your idea was discovered by the founder, did it instantly become part of all Subway’s?

Frankel: No, it didn’t. It just so happens that in that time, I was elected to the national advertising board … I went to some meetings and the concept was voted down. After being voted down, they reversed their decision. They said, “Lets go with it.” They ran the first campaign in March of ’07, and it was a success from day one.

Q: Are you happy being a subway franchise owner in this economy?

Frankel: I have been with subway for 23 years. Business is good compared to the rest of the industry. We are far superior.

Q: What advice do you have for other small business owners, especially franchise owners?

Frankel: Be committed to (your idea). It has to be something that you as a consumer would think is a good idea. I always felt that 89 and 60 cent price points were artificial.

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