Subway Operational Risk: Managing Food Safety Hazards
This paper examines operational risk management in the context of Subway restaurants, with a particular focus on foodborne illness as a recurring and preventable threat. Drawing on Horcher's (2005) framework of operational risk and CDC data on food safety, the paper identifies employee training failures and supply chain weaknesses as the primary drivers of repeated salmonella and food poisoning incidents across Subway's global franchise network. The paper then outlines a multi-layered mitigation strategy encompassing standardized training, empowered employees, layered supervisory enforcement, video monitoring, and supplier relationship management — all tailored to Subway's decentralized franchise ownership model.
- Introduction to Operational Risk: Defines operational risk and its employee-related dimensions
- Foodborne Illness as an Operational Risk at Subway: Documents Subway's recurring food poisoning incidents globally
- Root Causes: Training, Handling, and Supply Chain: CDC data links illness to training failures and sanitation lapses
- Mitigation Strategies for Franchisees and Head Office: Standards, job design, and training as primary mitigation tools
- Supervisory Controls and Infrastructure Solutions: Layered audits, enforcement roles, and camera monitoring
- Supply Chain Management and Conclusion: Supplier diversity and vendor relationships reduce deeper risk
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What makes this paper effective
- The paper grounds its analysis in a real-world case — Subway's repeated foodborne illness incidents across multiple countries — making the argument concrete and credible rather than purely theoretical.
- It integrates an established academic framework (Horcher, 2005) with authoritative public health data (CDC) to support its recommendations, balancing theoretical grounding with practical evidence.
- The mitigation section is systematic and graduated, moving logically from organizational structure through standards, job design, training, supervision, and infrastructure, demonstrating structured analytical thinking.
Key academic technique demonstrated
The paper demonstrates applied risk analysis — taking a theoretical concept (operational risk) and mapping it onto a specific organizational context. The author correctly identifies the franchise ownership structure as a key variable that shapes both the nature of the risk and the appropriate mitigation levers, showing that effective risk management must account for organizational form, not just generic best practices.
Structure breakdown
The paper opens by defining operational risk in general terms before narrowing to Subway's food safety record. It then diagnoses root causes using CDC data, followed by a stepwise mitigation framework organized around standards, empowerment, training, supervision, audits, technology, and supplier management. A brief conclusion ties the recommendations back to the brand-level stakes. The argument flows deductively from problem identification to actionable solution.
Introduction to Operational Risk
Operational risks tend to focus on employees and on finding ways to ensure that employees are not a source of reduction in a company's wealth. Among the operational risks identified by Horcher (2005) are those related to training, fraud, theft, and managing exposures to risks that arise in the ordinary course of operations. There have been many examples of operational failures over the years. While most fraud occurs at the highest levels of an organization — Enron being a prominent example — in other companies it is day-to-day operating issues that have proven to be the problem.
Foodborne Illness as an Operational Risk at Subway
One notable instance involves Subway, which faced a salmonella outbreak in the United Kingdom (Poulter, 2008) in addition to similar situations in Canada (Mickleburgh, 2011) and the United States (Blau, 2012; Falkenstein, 2010). Food poisoning incidents increase the risk of legal action that could devastate individual franchisees and can have a strongly negative impact on the brand as a whole. Yet such incidents appear to occur with troubling frequency at Subway locations worldwide.
Food poisoning is usually a training and handling issue. Occasionally it can be traced to a supplier, but even then it typically points back to training and handling failures somewhere within the supply chain. The CDC estimates that each year 1 in 6 Americans gets sick from eating food. In that sense, given the sheer number of meals Subway serves, its track record may not be statistically catastrophic — but this is clearly something that can and should improve, because the brand depends on it. An estimated 3,000 Americans die each year from foodborne diseases.
Root Causes: Training, Handling, and Supply Chain
The CDC notes that foodborne illness arises when bacteria are allowed to grow — inside food (especially meat and leafy vegetables), on cutting surfaces, or on the hands of food workers (CDC, 2014). Where Subway's supply chain risk represents a separate category of concern, the operational risk associated with workers failing to adhere to basic sanitation standards is an entirely preventable one. Understanding this distinction is essential for designing effective mitigation measures.
References
Blau, R. (2012). Subway restaurants have been closed for health violations more than any other chain in the city. New York Daily News. Retrieved December 12, 2014 from
CDC. (2014). Overview of attribution of foodborne illness. Centers for Disease Control and Prevention. Retrieved December 12, 2014 from http://www.cdc.gov/foodborneburden/attribution/overview.html
Falkenstein, D. (2010). Subway lawsuits and food poisoning claims. Food Poison Journal. Retrieved December 12, 2014 from http://www.foodpoisonjournal.com/foodborne-illness-outbreaks/subway-lawsuits-and-food-poisoning-claims/
Horcher, K. (2005). Essentials of Financial Risk Management. John Wiley & Sons: Hoboken, NJ.
Mickleburgh, B. (2011). Bad tuna sends seven Subway customers to the hospital in Richmond, BC. Globe & Mail. Retrieved December 12, 2014 from http://www.theglobeandmail.com/news/british-columbia/bad-tuna-sends-seven-subway-customers-to-the-hospital-in-richmond-bc/article554590/
Poulter, S. (2008). Sandwich chain Subway linked to deadly salmonella outbreak. Daily Mail. Retrieved December 12, 2014 from http://www.dailymail.co.uk/news/article-1043031/Sandwich-chain-Subway-linked-deadly-salmonella-outbreak.html
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