Subway shed more U.S. sandwich shops in 2022 -document

Subway Struggles as Franchisees Close Stores

By Hilary Russ

Subway, the popular sandwich chain, is facing a potential billion sale, but its struggles continue as franchisees closed 2.7% of its stores in the United States last year. This has led to a decline in royalties and fees for the brand.

The chain has been closing thousands of U.S. locations in recent years due to over-expansion, outdated operations and decor, stale menus, and $5 footlong deals that eroded franchisees’ profits. Despite a turnaround plan under Chief Executive John Chidsey, which included a refreshed menu and splashy advertising campaign with A-list celebrities, it can take several years for such plans to succeed, according to restaurant consultant John Gordon.

Continued closings can also hurt public perception, said franchisee advisor Robert Edwards. “That’s baggage that they’ll be hard pressed to step away from,” Edwards said.

However, Subway has been optimizing its footprint by using a strategic, data-driven approach to ensure restaurants are in the right location, image, and format. This includes opening new locations, with quality remaining a top priority, relocating restaurants to maximize guest traffic, and closing locations when needed.

The Numbers

• Subway closed a net 571 locations in 2022 in the United States.
• At the end of 2022, Subway had 20,576 shops in the United States, a sharp decline from 2016 when it had 26,772.
• Subway franchisees closed more than 1,000 net U.S. locations in 2021 and 1,609 in 2020.
• Subway has roughly 37,000 total locations globally.

Despite the decline, Subway has stated that the pace of closings slowed last year, and its goal for 2023 is to increase new openings across North America by approximately 35 percent compared to 2022.

(Reporting by Hilary Russ; Editing by David Gregorio)

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