Subway, which positions itself as the healthy alternative to fast food, awarded the business to Fallon in July last year as the restaurant chain parted company with Euro RSCG MVBMS Partners. Fallon won the business after a pitch against Wieden & Kennedy, Deutsch New York and Goodby Silverstein & Partners.
Subway said that it decided to part company with Fallon sooner rather than later and get on with the task of finding a new agency.
Chris Carroll, marketing director at the Subway Franchisee Advertising Fund Trust, said: "It just wasn't the right relationship. It just didn't seem to click. We're in a very competitive industry and we decided we weren't going to wait."
Carroll said that Subway would begin a search for a new agency in the summer, with Goldstein, now in at Lowe to revive its new-business fortunes, bound to come knocking at the restaurant chain's door.
Lowe has a track record in the fast food business having previously handled Burger King in the UK and the US before losing the account in 2001.
Goldstein has a reputation for being adept at winning new business and was credited by Fallon for leading efforts that snared accounts including Sony Europe, Virgin Mobile, United Airlines and Subway.
Subway does not have a UK agency and it said last year, when it appointed Fallon, that it would not appoint a UK agency until it has at least 250 outlets in here.
That appointment might come sooner than later. Subway has major expansion for the UK, with a target of 2,000 stores by 2011. It currently has less than 125 UK outlets, up from 30 three years ago.
The chain, like a lot of US companies, views the UK as its stepping stone into Europe.
The first UK advertising is likely to come towards the end of this year as the chain reaches critical mass with around 250 stores.
The loss for Fallon follows hard on the heels of the Umbro and Timberland accounts, which have also left the agency in recent months.
It is another blow for French parent Publicis, which has seen a string of business move out of its agencies in recent weeks. This has included loss of parts of HSBC and Toys R Us.
It also follows criticism of the group, which has been accused of talking up its results and glossing over the fact that it has achieved no growth in post-tax profit over the past two years.
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