Why Subway and other restaurant chains are giving out free cookies today

By Charles Passy

Inflation is fueling free offers at chains like McDonald's, Wendy's and Domino's - but these companies still make money off you in other ways

Free cookies, anyone?

In celebration of National Cookie Day today, several chains are giving out cookies at no cost. Leading the charge is Subway, which is offering a free foot-long cookie (yes, 12 inches of the sweet treat) at select locations in Chicago, Dallas, Miami Beach and New York City.

This is just one of many freebies being served up by restaurant chains these days, although some of the deals come with strings attached. The Subway offer requires customers to purchase a foot-long sandwich.

Wendy's (WEN) recently went viral for offering a free six-piece order of chicken nuggets every Wednesday from now through the end of the year - with the purchase of any other item. "Free Fries Friday" is also back at McDonald's (MCD), where you can get a free medium order of french fries with any $1 purchase on the restaurant's app.

And Domino's (DPZ) recently announced a free "emergency" pizza offer to use "whenever you need it most," although it also requires a qualifying online order.

Add it up, and we're likely talking free grub worth millions of dollars. That's on top of many regular discounts and deals that restaurants, especially fast-food chains, are currently offering.

Deals are often about getting customers to use the restaurant chain's apps. Digital-based customers tend to place bigger orders - sometimes as much as 20% bigger.

What's fueling the freebie wave? Not surprisingly, industry experts say that inflation has played a significant role. People are literally hungry for a bargain - and there's no better bargain than free.

"Consumers are seeking out value today more than they were a year ago or two years ago," veteran fast-food analyst Mark Kalinowski told MarketWatch.

That's on top of the fact that the deals are often about getting customers to use the restaurant chain's apps, Kalinowkski and others said. Companies are eager to bring business onto their digital platforms, a valuable marketing tool that lets companies more easily engage with customers on a regular basis once they have downloaded the app.

Plus, Kalinowski said, digital-based customers tend to place bigger orders - sometimes as much as 20% bigger than those ordering in person.

'We're making the bet that our generosity will be valued and rewarded.' Dave Skena, Krispy Kreme's chief global brand officer

Krispy Kreme is perhaps the biggest provider of freebies. In honor of World Kindness Day last month, the doughnut chain dished out a free dozen to the first 500 customers at each location - with no purchase requirement.

And during the height of the pandemic, Krispy Kreme gave away a doughnut to any customer who showed a COVID-19 vaccination card. That pandemic promotion saw 125,000 sugary treats handed out during the promotion's first 96 hours, the company said.

Krispy Kreme often gives away doughnuts even if there's no promotion in place. But the bottom line is that there's still a bottom line to the freebie train: Dave Skena, the company's chief global brand officer, told MarketWatch that the hope is that the happy feelings generated will result in future - and yes, paying - visits.

"We're making the bet that our generosity will be valued and rewarded," Skena said.

But freebies can sometimes backfire on a company, warned Craig Agranoff, a marketing professional based in Boca Raton, Fla.

He cited one famous example: In 1984, McDonald's offered its customers free food every time the U.S. earned a medal at the Summer Olympics. When the Soviet bloc countries boycotted the games that year, the U.S. had an even bigger medals haul, which resulted in many more freebies than McDonald's likely anticipated.

"It took a significant financial hit," Agranoff said of the company.

McDonald's didn't immediately reply to a MarketWatch request for comment.

Agranoff added that companies generally know what they're doing - and noted that the freebies often require a purchase of some kind.

"You always have to read the fine print," he said.

-Charles Passy

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12-04-23 1058ET

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