Over the past seven years, Subway closed 1,600 franchises across the United States — 571 of those were in 2022 alone! Despite this, the sandwich chain has plans for massive expansion overseas. Is there really a drastic difference between international and American consumers? Or are there other factors at work…
Lower Profits for “Eating Fresh” in the U.S.
In April 2023, Subway announced its initiative to incentivize owners to buy multiple franchises. This push includes remodeling existing restaurants as well as opening new locations.
However, there is a lack of enthusiasm from prospective franchisees according to Reuters…
SUBWAY FRANCHISES MAKE AN AVERAGE OF HALF A MILLION DOLLARS IN SALES PER YEAR — MAKING IT ONE OF THE LOWEST IN THE INDUSTRY.
Coupled with expensive renovation costs, this ownership model doesn’t seem to be to investors’ tastes. For these reasons, the sub-shop continues to struggle in the U.S. market.
But instead of contracting, they expanded into the international market with relative success…
Improved Performance Creates Global Interest in Subway Franchises
Not everything has been on a downward trajectory for the chain of sandwich shops.
Subway franchises saw a 9.2% increase in sales at the end of 2022. Additionally, the restaurant franchise has added wraps, salads, and more to its menu.
The Chinese company, Shanhai Fu-Rui-Shi, may have seen this as an opportunity. They have entered into negotiations with Subway to add over 4,000 store locations in China.
“THIS AGREEMENT IS A SIGNIFICANT MILESTONE IN SUBWAY’S INTERNATIONAL GROWTH STRATEGY AS WE CONTINUE TO FOCUS ON STRATEGICALLY EXPANDING OUR FOOTPRINT AND MAINTAINING OUR POSITION AS ONE OF THE WORLD’S LARGEST RESTAURANT BRANDS,” SUBWAY GLOBAL CEO JOHN CHIDSEY SAID.
If this partnership goes through, it will be the largest acquisition since Dunkin’ for $11.3 billion in 2020. But, nothing is official yet.
We just have to stay tuned and see if this deal affects the American Subway franchises as well…
— GCTV Staff
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