Subway

When the economy is tough, restaurants tend to get tough in their advertising. As customers tighten their wallets, chains will often claim superiority over competitors in the hopes of boosting business. Comparative advertising, as it’s called, veils an often messy marketing strategy.

Take Domino’s recent campaign-touting victory in a nationwide blind taste test that pitted the Ann Arbor, Michigan–based chain against Pizza Hut and Papa John’s. In the study, conducted by Lieberman Research Worldwide, a majority of participants preferred Domino’s pepperoni, sausage, and extra cheese pizzas to its main competitors’ offerings.

Domino’s insisted the results accurately reflected consumer taste preferences, but both Pizza Hut and Papa John’s immediately called them into question.

The corporate dust-up mirrors a similar situation early last year when Subway and Domino’s duked it out over their oven-baked sandwiches, a battle that featured a commercial of Domino’s CEO David Brandon putting a cease-and-desist letter from Subway in the oven (where else?).

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One year since the economic collapse brought restaurant growth to a standstill, some quick serves have started to see signs of recovery.

The burst of the housing bubble last September, which sent the world economy crashing, made expansion nearly impossible. Businesses stopped investing and banks stopped lending. The fallout at Sandella’s Flatbread Café was typical.

“The pipeline didn’t just stop getting filled,” says CEO Mike Stimola. “The whole thing basically flew apart.”

Sandella’s, which is based in West Redding, Connecticut, and has more than 100 locations, averaged 50 franchise applications in each of the first three quarters of 2008. In the next two quarters, the company received close to zero.

“Things just fell off the table,” Stimola says.

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