Subway Closing Stores
The Great Subway Shake-Up: Investigating the Complexities Behind the Mass Store Closures Background: The Rise and Stumble of a Fast-Food Giant Subway, once the undisputed king of submarine sandwiches, grew from a single Connecticut shop in 1965 to over 44,000 locations worldwide at its peak more than McDonald’s.
Its franchise model, low startup costs, and eat fresh branding fueled explosive growth.
Yet, in recent years, the company has faced an unprecedented wave of store closures, shuttering thousands of locations globally.
What went wrong? Thesis Statement Subway’s mass closures stem from a perfect storm of corporate mismanagement, franchisee dissatisfaction, shifting consumer preferences, and fierce competition exposing deeper flaws in its business model.
While some blame external market forces, internal decisions, including aggressive expansion, inconsistent quality, and a failure to innovate, have been equally damaging.
Evidence and Analysis 1.
Franchisee Revolt and Unsustainable Growth Subway’s rapid expansion came at a cost.
Unlike McDonald’s, which tightly controls franchisee selection and location planning, Subway allowed oversaturation sometimes placing multiple stores within blocks of each other.
A 2015 investigation revealed that top Subway executives pressured franchisees to open new locations even when existing stores struggled (Kowitt, 2015).
Franchisees, burdened by high royalty fees (up to 12.
5% of sales) and rigid supply-chain contracts, saw profits dwindle.
A 2020 report found that many operators earned less than minimum wage after expenses (Taylor, 2020).
This discontent led to lawsuits and a mass exodus, with over 3,000 U.
S.
stores closing between 2016 and 2021 (NRN, 2021).
2.
Changing Consumer Tastes and Health Concerns Subway’s healthy image took a hit after lawsuits revealed its bread contained high sugar levels more than some countries legally classify as bread (BBC, 2020).
Meanwhile, fast-casual competitors like Chipotle and Panera capitalized on genuine fresh ingredients and customization, leaving Subway’s processed meats and declining quality in the dust.
Millennial and Gen Z consumers, increasingly prioritizing sustainability and transparency, found Subway’s offerings outdated.
A 2019 study showed sandwich chains lagging behind in consumer preference rankings, with only 12% of diners considering Subway a top choice (Technomic, 2019).
3.
Leadership Missteps and Brand Erosion Subway’s leadership has been widely criticized for slow adaptation.
While rivals embraced digital ordering and delivery, Subway lagged, only revamping its app in 2019 years after Domino’s tech-driven resurgence.
Its revolving door of CEOs (five since 2015) further destabilized operations (WSJ, 2021).
The 2021 sale to Roark Capital, a private equity firm, brought hope but also fears of cost-cutting over innovation.
Historically, private equity takeovers in the restaurant industry (e.
g., Burger King, Popeyes) have prioritized short-term profits over long-term brand health (Harvard Business Review, 2020).
Counterarguments: Is Subway’s Decline Overstated? Some analysts argue Subway’s closures reflect natural market correction, not collapse.
The company still operates ~37,000 stores globally and claims improved franchisee relations under new ownership (QSR Magazine, 2023).
Others note that pandemic pressures hit all fast food, and Subway’s recent remodeled stores and plant-based options signal a turnaround.
Yet, critics counter that remodels and limited menu tweaks are too little, too late.
Without systemic changes fairer franchise terms, genuine ingredient upgrades, and digital-first strategies Subway risks becoming the next Blockbuster in an era of evolving fast food.
Conclusion: A Cautionary Tale for Franchise Models Subway’s decline is more than a corporate stumble it’s a warning about unchecked expansion, franchisee exploitation, and failure to adapt.
While external pressures played a role, internal complacency and poor leadership accelerated its fall.
The broader implications are stark: in an era where consumers demand authenticity and agility, even giants can crumble.
Whether Subway survives depends on whether it can reconcile its past mistakes with a future that demands transparency, innovation, and fairness not just nostalgia for $5 footlongs.
- Kowitt, B.
(2015).
Subway’s Problems Go Way Beyond Jared.
- Taylor, K.
(2020).
Subway Franchisees Say They’re Earning Less Than Minimum Wage.
- National Restaurant News (NRN, 2021).
Subway Closures Continue Amid Franchisee Struggles.
- BBC (2020).
Subway’s Bread Isn’t Bread, Irish Court Rules.
- Technomic (2019).
- Wall Street Journal (WSJ, 2021).
Subway’s Ownership Change: What’s Next? - Harvard Business Review (2020).
The Private Equity Playbook in Fast Food.
- QSR Magazine (2023).
Is Subway’s Comeback Real?.