Subway's Top North American Marketing Exec Leaves Amid Franchisee Rift

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Karlin Linhardt.
Karlin Linhardt. Credit: Subway

Karlin Linhardt, Subway's North American senior marketing VP, is out after just eight months on the job amid a report about friction between the sandwich chain and its franchises over pricing strategy. The departure of Linhardt, who joined Subway from Accenture in April, comes eight days after the chain tapped a customized Dentsu Aegis Network team of agencies to handle its media and creative work across North America.

"Karlin has tendered his resignation and Subway accepted it," a spokeswoman said in an email.

The company remains focused on "Subway's brand transformation," the spokeswoman said. It is looking for a successor to Linhardt.

His exit was first reported by the New York Post, which cited a "nationwide revolt" by franchisee owners over the chain's plans to revive a $4.99 footlong promotion next month. The Post earlier reported that the footlong deal was aimed at McDonald's dollar menu but that the discounting wasn't going over well with franchises worried about losing profits.

Subway's U.S. sales fell 1.7 percent to $11.3 billion last year, making it the only restaurant among the top 10 chains to post a decline, according to Technomic.

The sales struggles come as Subway has cycled through agencies and strategies in recent years. In 2016, Subway gave most of its creative business back to former incumbent MMB after working with BBDO for about a year. The chain put the creative and media accounts up for review in late July after Linhardt's arrival. The dedicated Dentsu Aegis team includes people from Carat New York, Mcgarrybowen New York, Carat Canada and DentsuBos. The Subway spokeswoman stated that Linhardt's exit "will not impact our partnership with Dentsu."

But the pricing strategy will surely come under the microscope amid the reported franchisee disgruntlement.

It was only two years ago that Subway pledged to move away from discounting in favor of a food-centric message that included the tagline "Founded on Fresh." But the chain quickly reversed course in February of 2016, with an ad that declared "Submageddon" and touted footlong sandwiches for "just $6 each."

Subway is currently running a TV spot touting a limited-time Reuben.

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