Spending More on Ads To Overcome a Slump

Project Infomation

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.
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.
  • Client : Insight Studio
  • Date : 20 Feb, 2018
  • Skills : Project Planning

Challenge & Solution

THE CHALLENGE Facing declining sales throughout its system, the chain sought a new marketing strategy in the depths of the recession. 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.
Advertising through chain stores
At first, Mr. Sorensen balked. But when the ad agency laid out data showing that some competing chains were spending more on advertising per store, he began to change his mind.
Alternative subway franchisees
Subway franchisees, for example, pay an 8 percent royalty and a 4.5 percent advertising fee; Quiznos franchisees pay a 7 percent royalty and a 4 percent advertising fee, according to those companies.
Creative campaign and radio ads
Zimmerman developed a creative campaign and radio ads that emphasized the food and the portion sizes, but offered no discounts. The agency used the Sorensen brothers as spokesmen.

Our Process

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.”
Improve sales & operations & production planning
Determine the right inventory level
Optimize the supply chain for perfect order planning
Improve sales & operations & production planning

Result Driven

The ad program ran only in markets where all franchisees agreed. Those who did not agree paid the 2 percent fee. With a new marketing war chest, Firehouse Subs and Zimmerman started an $8 million advertising campaign in September 2009. (Credit: nytimes.com)
Reduced lead time by 43%
Decreased variability by 50%
Lowered the risk of back-order by 95%
Increased stock for finished goods by 10%