Subway on Tuesday said that it has reached commitments from franchisees for 10,000 international restaurants, a symbolic milestone that highlights one of the sandwich giant’s biggest victories in recent years.
The commitments could increase the chain’s international unit count by 63%, assuming operators fulfill them.
That’s a major turnaround in just three years. Subway’s international unit count had been shrinking going into the pandemic and worsened coming out of it, a bad sign at a time when major chains have made international a major part of their growth.
The company says it has signed more than 20 master franchise agreements over the past three years, representing more than 10,000 commitments. Seven of those agreements have been signed this year, including deals that will put Subway shops in Paraguay and Mongolia for the first time.
The company also has deals to expand its presence in France, the Czech Republic, Luxembourg, Belgium, Switzerland, Liechtenstein, Brazil, El Salvador and Guatemala.
Forty percent of the chain’s new openings this year will come from those 20 master franchise agreements. The company says it is on track to more than double the number of new restaurant openings this year, compared with 2019.
“By working with the right partners, we are making significant strides in modernizing our brand image with both new and remodeled restaurants, improving our overall guest experience and growing digital sales,” Mike Kehoe, global chief development officer for the Miami-based Subway, said in a statement.
Subway’s international unit count grew rapidly in the early 2000s. The chain added more than 3,000 restaurants outside the U.S. from 2013 to 2015, for instance. But its rate of growth slowed quickly after that, just as its domestic unit count began to shrink.
From 2017 to 2021, according to Restaurant Business sister company Technomic, Subway shed 2,000 international restaurants.
Nearly 45% of Subway’s global locations are outside the U.S., more than most other Top 20 restaurant chains. But the international closures, on top of its domestic closures, mean Subway is no longer the world’s largest restaurant chain by unit count. It is No. 3, after McDonald’s and Starbucks, both of which operate more locations outside the U.S. than inside.
Subway’s international restaurant count, however, has increased slightly each of the past two years, according to Technomic. The company added 40 locations in 2022 and another 185 last year.
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