One of the largest and most recognized fast food chains in the world has just faced one of its worst crises in decades. In an unexpected turn, the company has announced the closure of 630 restaurants in the United States, leaving its customers in shock. For many years, this brand was an almost indestructible giant, but today it faces an uncertain future that could forever change its presence in the country.
With more than 37,000 locations around the world, Subway has managed to keep itself as an international benchmark. However, in its most important market, the United States, the closures of locations have set off alarms. In a decade, the brand has gone from having 27,000 restaurants to just over 20,000 in the country (27,000 and 20,000), and the reasons behind this setback are clear.
This is the reason why Subway has decided to close many of its stores
The drop in sales has been one of the main factors that has led Subway to this difficult situation. In addition, the franchise model, which was once a resounding success, now seems to be failing. In many small and medium-sized cities, where competition is fierce, Subway locations simply aren't profitable.
The most painful part of all this is how the company handled the closure of so many locations. Many employees were caught by surprise, since the stores were closed without prior notice: "We found out the same day," said Joanne Kennedy, the manager of a closed location in Oregon. Without transparency, the chain has left hundreds of workers unemployed.
Despite these hard blows, Subway doesn't plan to disappear, since the company continues to operate in all 50 states of the United States and currently has 19,502 restaurants open. In addition, the company has launched its "Fresh Forward 2.0" plan, a redesign project that aims to modernize the customer experience. Subway is betting on adapting to new consumer expectations, with more attractive and functional restaurants.
Meanwhile, the acquisition of Subway by Roark Capital for $9.6 billion in 2024 could represent a new hope for the brand. The investment could help Subway regain ground and rethink its business model, seeking to relaunch itself in such a competitive market.
Rebirth or decline?
Internationally, Subway remains a relevant fast food chain, with more than 10,000 restaurants in the rest of the world (10,000). The brand continues to expand in Europe, Asia, and Latin America, where the perception remains positive. Although the situation in the United States is uncertain, outside its borders Subway continues to be a popular option.
The future of Subway depends on the decisions it makes in the coming months. Brands that face difficulties, such as Starbucks or Burger King, also had to close locations before reorganizing, but the big difference is that Subway has taken too long to react. Now, it must act quickly or it could become a brand that many only vaguely remember.
If the chain manages to adapt in time, it could survive, but the clock is ticking against it. Will they manage to find the balance between tradition and modernization that they so desperately need?