Subway's CEO is stepping down as the chain closes hundreds of stores amid franchisee backlash

Subway has struggled in recent years, losing more than 900 locations in the US last year and recently announcing plans to close roughly 500 more in 2018.
Many franchisees had
One franchisee told Business Insider on Wednesday that there is a prevailing feeling of "guarded optimism" about Greco's retirement.

Subway's CEO is leaving the struggling sandwich chain.

Suzanne Greco, who is the sister of the chain's late co-founder, Fred DeLuca, announced on Wednesday that she is retiring as CEO.

Greco's retirement comes at a tumultuous time for the chain.

Subway's US store count fell by 909 last year. It lost almost three times as many locations as it did the year before. The sandwich chain told Bloomberg last week that it planned to close about 500 of its US locations this year, based on projections.

Franchisees and other internal Subway sources told Business Insider in recent months that up to one-third of the chain's more than 25,800 US locations may not be profitable and that franchisees were bracing for more closures.

Greco featured heavily in a number of franchisees' complaints about the chain.

"Many franchisees have felt that there has been a lack of strong leadership at headquarters and that the management team was incapable of making the right decisions to turn the ship around," one franchisee told Business Insider in an email on Wednesday.

The franchisee continued: "I have communicated with around a dozen other franchisees since the news broke and each one has expressed what I would characterize as guarded optimism."

CEO versus franchisees

Greco started working in Subway locations in her teens and joined the chain's corporate staff immediately after college. She has worked at Subway ever since, primarily in research and development — an area where some franchisees feel Subway has fallen short over the years.

In January, Business Insider reported that many franchisees were turning against the CEO.

"She surrounds herself with people who won't necessarily challenge her," one franchisee said at the time. According to him, based on discussion among other franchisees and franchisee groups, the "vast majority" of franchisees believed Greco needed to be replaced.

"A lot of people in the industry feels that Suzanne is not qualified to be the CEO of the company," another franchisee said. "She tells us like she is doing us a favor while franchisees are losing everything they own."

Trevor Haynes, Subway's chief business development officer, will take Greco's place as interim CEO, effective Wednesday. Greco will officially retire on June 30, after which point she will serve as a senior advisor to Subway.

"Subway has been part of my life since I was 7 years old," Greco said in a statement. "I love the brand and the company, and I always will, but it's time for me to have more balance in my life. I feel very good about the strategic moves we've made in the last three years, and I have confidence in the future of the company."

Subway's CEO is stepping down as the chain closes hundreds of stores amid franchisee backlash

CEO versus franchisees

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