Here's the statement Subway Australia posted on Facebook:
The post has since been taken down.
The most important part:
"With regards to the size of the bread and calling it a footlong, "SUBWAY FOOTLONG" is a registered trademark as a descriptive name for the sub sold in Subway Restaurants and not intended to be a measurement of length."
But Buzzfeed's Copyranter offers up these examples from a 2008 commercial from Subway. The ad is quite explicit about the length of a footlong – one foot:
And the photo that started all of this:
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