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Firehouse Subs is a 16-year-old restaurant chain based in Jacksonville, Fla. It emphasizes a firefighter theme and has more than 390 restaurants that serve specialty submarine sandwiches.
THE CHALLENGE Facing declining sales throughout its system, the chain sought a new marketing strategy in the depths of the recession.
THE BACKGROUND Robin and Chris Sorensen, brothers and former firefighters, opened their first Firehouse Subs restaurant in 1994. They emphasized their firefighter heritage by featuring red furnishings, colorful murals of firefighters in action and sandwiches like the hook-and-ladder sub.
By 2001, the chain had grown to 30 company-owned restaurants in Florida and switched to a franchise model to expand into new markets. By early 2008, the company had expanded to 300 locations in 17 states, mostly in the South and Southeast. But then growth fizzled.
That March, comparative sales for the entire system declined from the previous March. “In our entire history, we had never had a period like that when our entire system was running negative sales,” said Don Fox, the chief executive. “It was something completely foreign to us.”
At the time, in addition to a 6 percent royalty, Firehouse Subs was collecting a 3 percent advertising fee from franchisees, including 2 percent for local advertising. As sales fell, the company’s executives grew dissatisfied with their advertising agency and started groping for a new strategy. But with no answers on hand, Robin Sorensen, the chairman, floated an unconventional suggestion: Why not give the local marketing dollars back to the stores?
Read more at: 20Fifteen.tv
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