America's Largest Fast-Food Chain Is on a Downward Spiral, Reports Say
Subway is America's largest fast-food chain by the number of locations, so it's hard to imagine we'll ever see a world without it. But the chain closed more locations than any other rival last year and rumors of a troubled operation and an impending sale are swirling.
Subway has shuttered nearly 1,800 domestic locations since the beginning of 2020, with its total number of restaurants decreasing from 23,800 in 2019 to slightly more than 22,000. During that same time period, sales plummeted from $10.2 billion to $8.3 billion. (Related: 7 New Fast-Food Chicken Sandwiches Everyone's Talking About)
The chain has also reduced its staff, with some estimating that about 500 employees at the company's headquarters have lost their jobs since early last year. CEO John Chidsey's cost-cutting measures reportedly included moving HQ from Connecticut to Florida, a rumor which Subway has denied. However, the company did relocate a number of its C suite executives, as well as its culinary and marketing teams to Miami last month, according to Business Insider.
Chidsey is also rumored to have put a strain on Subway's relationship with its franchisees by ceasing two-way communication and instituting controversial menu changes that hurt profits. As we've previously reported, many were shocked when Subway announced that it was cutting roast beef and rotisserie chicken from its menu last June, a move which some operators strongly disagreed with because the two proteins were popular among customers. At the same time, the company rolled out a "$5 Footlongs When You Buy Two" deal, which saw a major pushback from operators who said it would lose too much money. (The former decision was recently reversed.)
The company's moves may be indicative of an intent to sell to a private equity firm, according to experts. And there are already two likely buyers, according to Business Insider. Both Restaurant Brands International (the parent company of Burger King, Popeyes, and Tim Hortons) and Inspire (which owns Arby's and Sonic, among others) have looked into purchasing Subway over the past year. Eat This, Not That! has reached out to Subway for comment, but the chain hasn't responded so far.
For more drama at Subway, check out New Lawsuit Alleges Subway's Tuna Contains "Absolutely No Tuna." And don't forget to sign up for our newsletter to get all of the latest restaurant news delivered straight to your inbox.