NEW YORK CITY, New York: Amid a potential $10 billion sale, in 2022 Subway’s US franchisees closed 2.7 percent of the brand’s sandwich shops, closing 571 locations while decreasing its royalties and fees.
According to the latest disclosure document it provides to interested franchisees, the chain’s decline follows even steeper closings in previous years in the US, its largest global market, where its closed thousands of branches due to over-expansion, outdated operations and decor, old menus and $5 footlong deals that decreased franchisees’ profits.
In 2021, the company launched a turnaround plan under Chief Executive John Chidsey, which included a new menu and advertising campaign.
However, continued closings can hurt public perceptions, said franchisee advisor Robert Edwards, stating, “That is baggage that they will be hard pressed to step away from,” as quoted by Reuters.
In a statement, Subway said, “We have spent the past two years optimizing our 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.”
However, the company added, “The slowdown in closures is a result of the progress we have made to get back to smart growth, which will boost franchisee profitability and protect our position in the market. In 2023, our goal is to increase new openings across North America by approximately 35 percent, compared to 2022.”
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