Dive Brief:
- Subway has signed five new multi-unit owner agreements across Texas, Florida, Arizona and the Mid-Atlantic, the company announced Monday.
- The agreements resulted in the consolidation and transfer of over 230 existing restaurants so far this year. The units were transferred from single- and multi-unit operators, the company wrote in an email.
- In 2022, Subway shifted its franchising strategy, which originally focused on single-unit owners, to one that targets well-resourced, multi-unit franchisees.
Dive Insight:
Subway continues to focus on growth and improved operations even while in the midst of pursuing a sale. The five multi-unit owners agreed to remodel restaurants and open new restaurants in the future, the company said. One existing multi-unit operator acquired 100 existing restaurants and now has a portfolio of over 140 locations. Two new multi-unit operators joined the Subway system and boast experience in running other QSR brands.
Subway said it’s spent the past two years working on optimizing its footprint “using a strategic, data-driven approach to ensure restaurants across the system are in the right location, image and format.” The company said it uses a combination of art and science to better understand a particular market. It also leverages first-hand knowledge from local teams and franchisees to find these ideal locations, the company wrote in an email.
The company is planning to increase its new openings within North America by about 35% in 2023 compared to last year. Last year, Subway opened almost 750 new units globally and another 145 in Q1 2023.
In addition to new openings, the company is targeting 3,600 remodels in North America this year, which would bring its total Subway remodels to over 10,000 by summer. These remodels, which follow the Subway “Fresh Forward” design the company began ramping up in 2019, have impacted profitability. In April, Subway reached its highest weekly average unit volume since 2010. Outside of remodels, the company is also experimenting with adding EV charging stations, as well as Subway Oasis charging parks, at new or newly remodeled restaurants.
