Domino's Doesn't Back Down in Sandwich Skirmish

CEO Tosses Subway Cease-and-Desist Letter in Pizza Oven in Ad on 'American Idol'

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CHICAGO ( -- The desire to burn harshly worded letters is nothing new, but Domino's decided to do it on national TV on Wednesday in prime time during Fox's "American Idol."

The pizza chain, which is fighting to gain a foothold in the sandwich business, launched a taste-test campaign in December claiming that consumers preferred its subs over Subway's by a two-to-one margin.

"We felt like the best way to tell people that we have this fantastic sandwich was to compare us to the folks known for making subs," said Domino's Chief Marketing Officer Russell Weiner. Domino's conducted the taste test before the launch. The results were so staggering that "we had to read them three times," he said.

In contrast to Subway -- well-known for its variety of ingredients and ability to make sandwiches before customers' eyes -- Domino's launched with four sandwiches, all of them oven-baked and available for delivery in 30 minutes or less. A critical point: The pizza giant is matching Subway on its $5 price.

Concern from franchisees
Subway responded to the Domino's campaign quickly, with a cease-and-desist letter from the Subway Franchisee Advertising Fund Trust, the franchisee organization that controls the brand's ad spending. Franchisees cited concern about Domino's methodology and the ability to make fair comparisons between the products.

But Domino's made it clear it wasn't going to quit running the taste-test ads. In its response to Subway's letter, CEO David Brandon declares, "Everything's better when it's oven-baked," and tosses the letter into a pizza oven. "Let's roll the commercial," he says.

Domino's also added a "bake the letter" feature on its company site. Consumers can click a button and watch an image of the letter -- with a visible Subway logo -- burn. It had been "baked" nearly 62,000 times by press time.

Mr. Weiner said the aggressive response from Domino's shows confidence in its consumer research and commitment to the sandwich business. In a statement, Mr. Brandon referred to the company's ads, from agency Crispin Porter & Bogusky, as a "good, old-fashioned, school-cafeteria food fight," adding that Domino's is "flattered that Subway would consider us a threat."

'Nothing new'
Mack Bridenbaker, public-relations manager for the Subway ad trust, declined to comment on the legal issues surrounding the campaign. "But I can tell you that attacks like this are nothing new for category leaders," he said. "We're No. 1 in the sandwich game, so competitors are going to take the occasional swipe at us."

But Subway has a history of getting litigious about advertising claims made against its sandwiches. The chain has long been embroiled with competitor Quiznos regarding a long-defunct claim about whose sandwiches have the most meat.

One Subway franchisee, who said Domino's isn't affecting business, admitted that Domino's subs are "pretty good," but that the taste didn't meet the advertising promise. The sandwich didn't arrive warm in the center, for instance. "If someone's making claims that aren't true, that's something that shouldn't happen. It's inappropriate," the franchisee said.

Another franchisee, who was angered by the ads, said, "The problem was with people comparing something they make in a back room, and you don't have the choice of them making the sandwiches in front of you. The way they did the test, why would somebody do that?"

Lawsuit likelier
Jeff Edelstein, an advertising lawyer with Manatt, Phelps & Phillips, New York, said Domino's response may increase the likelihood of Subway filing a lawsuit, "because it shows the letter was not treated very seriously." If a court were to find the Domino's ads false and misleading, he said, the ad could also increase damages awarded.

Subway recently capped a very strong year, with double-digit U.S. same-store-sales growth, compared with 1% growth in the fast-food industry as a whole. Domino's is coming off a difficult year. Third-quarter same-store sales fell 6%, and the Ann Arbor, Mich.-based company recently announced that a number of its franchisees had filed for bankruptcy. The company won't release fourth-quarter results until February.

However, Mr. Weiner said, the aggressive ads are helping. The chain has actually pulled back on some of its sandwich advertising while it adds online servers. The chain's website has been crippled by overwhelming demand. He added that the taste-test ads have had a "halo effect" on the brand's quality perception, and that pizza sales are up as well.

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