Dive Brief:
- Subway lost 729 net units across its U.S. franchise system in 2025, according to its 2026 franchise disclosure document released April 30.
- This is the steepest decline since 2021, when its net unit count fell by over 1,000 stores.
- The chain’s footprint has shrunk by 3,417 restaurants since the start of 2021, when it had 22,190 locations, according to FDD data. It currently has 18,773 units.
Dive Insight:
This loss continues Subway’s long unit count decline, which began over a decade ago in 2014, as franchisees faced oversaturated markets and low average unit volume, which, Circana estimates, is currently about $500,000. Subway does not report its AUV in its franchise disclosure document.
Subway’s franchise system has historically consisted of operators that typically own a handful of units. Low unit volumes and a fragmented system may make it more difficult for operators to weather economic uncertainty.
Subway has faced significant pushback from its operators over the past few years, particularly over steep discounts. Earlier this year, Subway revised its Sub Club loyalty program after franchisees criticized a reward that let consumers get a free footlong after buying just three other footlongs. The company now offers a $2 discount for every 400 points earned.
In 2022, Subway shifted its focus toward attracting multi-unit operators that are well-resourced. While it has made headway internationally with big deals, like an agreement to develop 4,000 stores in China, it initially struggled attracting large franchisees because of its low margins, according to Reuters.
A handful of franchisees have also declared bankruptcy, including 43-unit operator MTF Enterprises, which filed for Chapter 11 earlier this year after it faced financial difficulties arising from Merchant Cash Advance loans. In 2024, River Sub, a 48-unit operator, also declared bankruptcy following a wrongful death case.
Despite the ongoing decline in its unit count, Subway raised its net income to $688 million in 2025, up from $397 million in 2024, per its FDD. Even the 2024 figure is a huge increase over the $15 million it reported for 2023. Total franchise revenue, however, fell by over 6% to $767 million last year, compared to $818 million in 2024, as franchisee royalties declined. The increase in net income is attributable to falling operating expenses.
Subway's store count has declined by over 3,000 units
The company also noted that 792 locations were temporarily closed as of Dec. 31, 2025, many of which it expects to reopen this year. Over half of the 499 units that it opened last year had been temporarily closed in previous fiscal years, for example.
Subway projects franchisees to open 100 units this year and reported 93 franchise agreements signed, but not opened.
Subway is facing stiff competition as other sandwich chains continue to grow their store systems and their unit economics. Jersey Mike’s, which is planning to go public, reported an average unit volume of about $1.4 million for its traditional franchised restaurants, according to its FDD. It also grew its outlets to 3,227 for 2025, for a net increase of 238 units. It has added 840 units since the start of 2023.
Jimmy John’s, which has an average unit volume of about $1 million, grew to 2,777 units last year and has added 140 units since the start of 2023, per its FDD.
