Subway’s plan to have all of its US restaurants serve Pepsi instead of Coca-Cola is backfiring.
He A multi-billion dollar deal would not just mean moving from the No. 1 queue to the No. 2 queue.
Customers would see Sprite, Fanta, Vitamin Water, Powerade and Dasani disappear and be replaced by Mountain Dew, Starry, Tropicana, Lipton, Gatorade and Aquafina.
But some restaurant managers are resisting the change.
The sandwich chain announced in March that it had signed a 10-year deal with rival Pepsi to supply its nearly 20,000 U.S. locations.
Subway announced it would switch from Coca Cola to Pepsi in March
It has since been pressuring its franchisees to make the change, even threatening to terminate the contracts of those who do not comply. The restaurant business was reported.
Now a group of executives has hired a lawyer and formally requested to review the contract between Subway and Pepsi before making the change.
The managers’ attorney, Robert Zarco, claims Subway has been “harassing” the operators and threatening them with termination if they do not sign, the publication reported.
“Subway’s conduct in this regard is reprehensible and borderline unlawful, as it seeks to force franchisees to execute an agreement that is incomplete,” Zarco said in a letter to Subway and viewed by Restaurant Business.
Franchisees are expected to sign a participation agreement that includes new Pepsi equipment and prices negotiated by Subway.
About 95 percent of franchisees are known to have already signed the agreement, according to Restaurant Insider.
Those who have not yet signed will face being unable to offer drinks to customers once the contract expires on January 1.
The Coca-Cola Company has been The main beverage supplier for Subway since 2005.
Prior to Coca-Cola, PepsiCo was the primary beverage supplier for all Subway locations and had been since 1988.
Subway announced in March that the company had signed a 10-year deal with Pepsi to be its primary beverage supplier instead of Coca-Cola.
Under the deal, Subway’s 20,000 U.S. branches will offer beverages including Pepsi, Mountain Dew and Lipton starting in January 2025.
Subway North America President Doug Fry was excited about the new deal when it was announced.
“Partnering with PepsiCo is an exciting milestone in our journey to become America’s favorite place to eat, drink and work,” he said in the press release.
“It’s a win-win as it offers a delicious variety of beverages and snacks to our guests, increasing consideration for these menu items while providing cost-effective and streamlined solutions to our franchisees.”
While this new deal is angering Reddit users, it’s old news for some other regions.
Subway said PepsiCo is already its current beverage supplier in places like Canada, Germany, Norway and the Netherlands.
