A Subway customer gained internet attention when she alleged that her gratuity, intended for a helpful employee, was redirected to the store’s manager instead.
This claim sparked online discussions, raising issues related to fair compensation and the proper distribution of tips in the service industry, which often relies heavily on customer gratuities to supplement workers’ incomes. It’s worth examining.
The Tipping Issue
A TikToker, Jess, while enjoying her Subway sandwich, Jess shared with viewers,
“Maybe I’m the only person who didn’t know but if you tip at Subway it doesn’t go to the person who made your sandwich. It goes to the manager.”
She expressed her frustration, asking, “Like why did my tip that I just thought I was giving to the girl who made my sandwich go to the manager who’s not working?”
Public Outcry
The video, viewed over 667,617 times, has sparked varied responses from viewers, with some sharing similar experiences and others, including claimed Subway workers, disputing the claim and explaining that tips are split among the staff on shift.
One person who watched the video commented, saying something similar happened to them: “Omg no wonder she told me to ‘just skip and pay.’
The video started a discussion among viewers about the truth of where tips at Subway go.
A viewer who said they worked at Subway shared, “I work at Subway and all tips that we get, get split between everyone that’s on shift.”
Another person backed up the video creator, saying, “Yes!! I went to Subway about a month ago and the employee told me not to tip for this reason.”
But, a user argued against these claims, stating, “That is untrue. The tips are redistributed to those that worked that shift, just like any other POS system that takes tips. Verify info b4 you post.”
Jess, the video creator, responded with, “The girl that worked there told me specifically it goes to her manager.”
Some viewers also shared their thoughts on tipping, generally.
“Hmm. That’s not fair,” said one commenter, while another asked, “Why would you tip at Subway?”
To that, Jess responded,
“The girl was so nice to me, she deserved it.”
Struggling Subway’s Strategic Shift Amidst Sale Efforts
Subway, the largest fast-food chain in the nation, is navigating through a challenging period, attempting to enhance its appeal to potential buyers by showcasing revenue and earnings that suggest a valuation exceeding $8 billion.
The company claims its EBITDA (earnings before interest, taxes, depreciation, and amortization) for the previous year was between $650 million and $750 million, which could translate to a selling price between $7 billion and $8.4 billion.
However, to achieve these figures, Subway has reportedly been compelling franchise owners to bear the costs for significant store upgrades and has been stringent with those wanting to shut down non-profitable locations.
Nevertheless, rumors about Subway’s decline and various issues, such as forcing employees to buy their uniforms or using subpar ingredients, have circulated for years.
Subway’s practices have been scrutinized with changing consumer demands for higher quality and fresher ingredients.
Franchisees Bearing the Brunt of Subway’s Financial Strategies
Subway’s approach to bolstering its financials involves enforcing franchise owners to fund expensive store upgrades and being strict with those attempting to close unprofitable locations. The company has altered its policy on expiring leases, imposing stringent conditions on franchisees who wish to shut down outlets.
Additionally, to attract new location buyers, Subway has waived the $12,500 franchise fee, and existing stores are being sold at notably low prices.
Current owners must invest thousands in upgrades or face penalties, even risking losing their stores without compensation.
Despite these efforts, sales remain suboptimal, with some franchisees reporting that while there is a slight increase, it is primarily due to raised prices and still significantly below peak levels. The company, which owns none of the chain’s approximately 20,000 US restaurants and relies on franchisees to pay an 8% gross royalty fee, reported a 7.8% sales rise last year compared to 2021, surpassing its projections by over $700 million.
Despite its strategic and financial reshuffling, Subway’s future trajectory remains to be seen as it navigates through its operational and market challenges.
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Sources
- nypost.com/2023/02/26/subway-clamps-down-on-franchisees-as-chain-eyes-8b-sale-sources/
- businessinsider.com/rise-and-fall-of-subway-restaurants-2019-9/
- reuters.com/business/retail-consumer/subway-struggles-get-big-new-franchisees-buy-its-us-sandwich-shops-2023-06-06/
This article was produced and syndicated by Viral Chatter. It was inspired by this video:
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Martha A. Lavallie
Martha is a journalist with close to a decade of experience in uncovering and reporting on the most compelling stories of our time. Passionate about staying ahead of the curve, she specializes in shedding light on trending topics and captivating global narratives. Her insightful articles have garnered acclaim, making her a trusted voice in today's dynamic media landscape.
