Breaking down Freshii’s not-so-modest proposal to Subway

Just how effective might the brand's open letter ad be?

Freshii Subway Open Letter Digital Ad (2)

Pictured: Freshii’s Subway conversion proposal.

If last year’s “McWhopper” campaign by Burger King is any indication, a full-page open letter can lead to some real success in the competitive QSR space. But beyond the publicity, can it work for kicking off real business growth?

Canadian QSR Freshii picked up some media traction Tuesday with a full-page print ad in The Globe and Mail seeking a “partnership” with Subway.

In “Dear Subway, Love Freshii,” the brand’s founder and CEO Matthew Corrin lays out Freshii’s growth while arguing that struggling Subway franchises could be reinvented as Freshii locations to the benefit of both corporations (see full text below). Freshii, which recently went public, reportedly has a goal of growing to about 840 locations worldwide by the end 2019.

Along with declining sales, Subway is currently in the midst of a PR crisis in Canada following a CBC Marketplace report questioning the makeup of its chicken (the QSR now plans to to sue the public broadcaster over the piece).

Subway declined to comment to strategy about Freshii’s ad.

The idea for the letter was conceived internally, according to Corrin, and was meant to be a conversation starter with Subway’s senior management.

Though he says he didn’t reach out prior to debuting the print ad and publishing the letter online, Corrin did send Subway CEO Suzanne Greco an email Tuesday morning laying out what was in the letter and saying he hoped to begin a dialogue.

However, the open forum was also meant to be a way to speak to Subway’s franchisees broadly, he says.

From Corrin’s perspective, the interest in Subway store conversions already exists. He says that over the years, Freshii has received “dozens and dozens” of applications from Subway franchisees interested in working with Freshii (either adding it to their existing locations or eschewing Subway for the newer chain).

An effective strategy?

The open letter strategy isn’t new for Freshii. In May 2015, Corrin wrote a public proposal to McDonald’s, arguing for co-branded Freshiis within some of the QSR’s locations. Then last May, he also penned an open letter to “Frozen Yogurt Shop Owners and Juice Bar Operators Struggling to Stay Relevant.”

The Subway proposal itself has some merit and partnerships between QSRs aren’t unheard of, says Terry Flynn, an assistant professor of communications with McMaster University. He points to the corporate marriage between Tim Hortons and Wendy’s as just one example.

But in this case, he says Freshii’s letter mainly serves a signal to the market that Freshii is both creative and interested in growing.

However, “given the fact that Subway seems to be struggling a bit, in many respects, [the letter] could be marketing opportunism,” Flynn says.

Freshii is openly positioning itself as having a brand with more longevity than Subway, primarily because it doesn’t represent a single product the way the latter chain does, Corrin says. “Subway is so synonymous with subs and forever will be,” he says.

“Freshii represents healthy fast food, it’s not tied to one category,” he goes on to say. “Ten years from now, 20 years from now, when salads or bowls or wraps are no longer desired, we will be relevant because we represent healthy eating, not necessarily a specific product mix.”

Indeed, Queen’s University marketing professor Ken Wong sees the move as Freshii looking to position Subway – the much bigger brand – as old school. “I think this is part of a concerted effort by Freshii to position Subway as your father’s healthy food place,” he says.

From a publicity perspective, Wong says it’s unlikely Canadians would generally pay attention to Freshii’s move long-term or that the open letter might convert existing Subway customers. “I don’t think there’s going to be a dramatic impact on the consumer here.”

And despite Corrin’s argument that the letter wasn’t meant to be antagonistic, Wong says he doesn’t see how it’s not meant to be a takedown. “[Corrin] may be talking friendship but if you’re Subway, don’t turn around and close your eyes because you may find a knife in your back.”

Full text of Freshii’s open letter to Subway

Dear Subway,

“As a business owner, you’re in a constant race against an ever-improving marketplace.”

These are the words of Fred DeLuca, the late great Founder and CEO of Subway Restaurants and the pioneer of healthier fast food in the 1980s and ‘90s.

At Freshii, we share Fred’s mission to make healthy food convenient and affordable for all citizens of the world. As Freshii’s Founder & CEO, I am grateful to have met Fred and call him an inspiration.

So, we at Freshii want to see both of our brands thrive as we continue to work toward this common goal.

Fred’s trailblazing spirit taught us a lot. Freshii is now the fastest-growing restaurant brand in the world; we opened our first 200 restaurants faster than McDonald’s, Dominos and even Subway.

Our 15 consecutive quarters of strong same store sales growth are a testament to this and have helped our franchise partners grow their sales and profits. In fact, almost 30% of our new restaurant openings each year come from our current partners deploying their profits back into building more Freshii locations in their respective markets. We operate in 15 countries today and growing.

We know you are no stranger to growth. You have nearly 44,000 restaurants globally. That’s more than either McDonald’s or Starbucks. But too much of anything can be unhealthy. Respected restaurant industry analysts agree that Subway has overdeveloped its retail base, with too many restaurants chasing fewer customers. Industry analysts have said they believe Subway would be better off with 30,000 restaurants—still enough to dominate your niche, but with larger territories that would enable all your franchise partners to grow and prosper.

So, we have an idea. A sincere proposal to help Subway and fresh-food lovers everywhere.

Let’s explore a partnership in which we together convert select Subway stores to Freshii restaurants in a quick, low-cost way. Let’s continue to change the way the world eats, together.

Over time, we too will open thousands of Freshii restaurants around the world as we execute on our mission and Fred’s. But we could get there faster together. We believe we’ll be creating a better future centered around affordable entrepreneurship to reignite the entrepreneurial spirit across your entire system. We estimate average conversion costs, including equipment, will total around $75,000 and believe we can work together to help partners make this a reality.

Will this work? We know it will. We’ve already helped dozens of franchise partners from many iconic restaurant brands become successful Freshii partners by either converting their stores or bringing the Freshii brand into their portfolio. They’re seeing increased sales and profits and feeling re-energized in growing a new healthy restaurant concept built for today’s consumers. If you share Fred’s dream, you’ll be excited to share ours.

If you share Fred’s passion, we’ll get along like kale and quinoa. We hope SUBWAY (Doctor’s Associates Inc.) will support this proposal. Your franchise partners and your customers will thank you.

Visit www.freshii.com/dearsubway for our proposed conversion designs, costs to convert and additional information on the transition.

I hope to hear from you soon. As Fred liked to say, “Opportunity waits for no one.”

Love, Freshii
Matthew Corrin
Founder & CEO
Freshii Inc.