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Subway lost more than 1,000 U.S. locations in the past year, filings show

Subway is still the country’s largest fast-food chain — but its lead is shrinking.

The struggling sandwich giant – which has recently fallen out with franchisees over controversial advertising campaigns and allegations of corrupt regional managers – this week closed 1,043 more stores across the US than it opened in 2021, according to public filings.

The drop — which shrank Subway’s overall presence by nearly five percent to 21,147 locations — wasn’t as severe as the net loss of 1,609 U.S. restaurants Subway suffered in 2020. But it was worse than the 999 it lost in 2019 before the coronavirus outbreak, according to state disclosures filed by the company.

In February, Subway said U.S. sales have steadily improved throughout 2021, although industry experts said gains were mostly due to price inflation and that the chain continued to lag behind its competitors.

Subway has been promoting new sandwiches like Turkey Cali Fresh and All-American Club in a major ad campaign starring sports stars Tom Brady and Steph Curry. However, the campaign also drew complaints from franchisees last year about the hiring of soccer star Megan Rapinoe, whose perceived anti-American views have allegedly rubbed some customers the wrong way.

Behind the scenes, Subway CEO John Chidsey is also cracking down on franchisees, demanding they stay open seven days a week, 13 hours a day to track sales of breakfast, lunch and dinner, sources said. That adds up to 91 hours a week compared to the 80-hour weeks averaged by many, according to sources.

Subway sandwich
In February, Subway said U.S. sales have been steadily improving throughout 2021, although industry experts said gains were mostly due to price inflation.
AP
Subway restaurant
Subway has closed 1,043 more stores in the US than it opened in 2021.
Getty Images

Subway does not own any US restaurants and depends solely on franchisees. Insiders point out that Subway charges an 8% royalty on gross sales even if restaurants lose money by operating during off-peak hours.

“Keeping stores open will increase gross sales where Subway makes its money from royalties,” said a consultant to Subway franchisees. “But since the deals can’t last because of margin, it will reduce Subway’s long-term revenue.”

“Go ahead and take my keys,” one franchisee, who asked not to be identified, told The Post, saying it was only open 78 hours a week.

A company spokeswoman confirmed the goal of 91 hours a week for 2022 and said the average before the pandemic was 88.

Subway “makes strategic improvements to our large footprint, ensuring our restaurants have the best format and locations, including drive-thrus and non-traditional, to provide the convenience, accessibility and value our guests demand.” wish.

“We are already seeing our efforts paying off as profitability per restaurant increases as our restaurants begin to operate at a higher level and with greater efficiency,” the spokeswoman added.

Former Subway spokesman Jared Fogle was convicted of possession of child pornography in 2015, a public relations disaster that followed Subway’s years of decline.

Ad starring Jared Fogle
Former Subway announcer Jared Fogle was convicted of possession of child pronography in 2015.
Subway

After peaking at 27,129 US locations on Jan. 1, 2016, the chain has since shrunk by a whopping 22 percent. In New York, there has been a 22 percent drop in the last three years alone, federal records say.

For comparison, McDonald’s reported this month that it lost 247 net US locations in 2021, 2% of its US total, bringing its total to 12,775. McDonald’s net lost 454 U.S. restaurants, or 3.4% of its total, from 2019 to 2021, compared to Subway’s 15% decline over the same period.

Starbucks — the No. 2 U.S. fast-food chain ahead of third-place McDonald’s — had 15,444 U.S. restaurants as of Oct. 3, up 116 from a year earlier, according to the company’s annual report.

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https://nypost.com/2022/04/28/subway-lost-more-than-1000-us-locations-last-year-filings-reveal/ Subway lost more than 1,000 U.S. locations in the past year, filings show

DUSTIN JONES

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