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Subway makes another big international deal

The sandwich giant has an agreement to expand more rapidly in Saudi Arabia. It’s the chain’s third major international deal in recent months.
Subway international development
Photograph: Shutterstock

Subway’s global tour continued this week with its third major deal this year, a 145-unit agreement with an operator in Saudi Arabia.

The sandwich giant said on Tuesday that Fawaz Abdulaziz Alhokair Co., a leading franchise retailer in Saudi Arabia, has agreed to develop the locations over the next six years. The agreement will ultimately give the operator 210 locations in the kingdom.

It will also speed the growth of the chain’s “Fresh Forward” restaurant design in the country.

“Through partnering with companies that have deep regional knowledge and proven success in the industry, such as Alhokair, we are strategically expanding our global footprint around the world,” Subway CEO John Chidsey said in a statement.

The deal follows a larger development agreement in South Asia and an earlier one in Indonesia.

It comes as Subway is looking to reverse its decline in international markets. While many of its large chain contemporaries have thrived outside the U.S., Subway has been in decline. The number of international locations has declined 14% since 2017, to 15,472 from a peak of more than 18,000, according to Restaurant Business sister company Technomic.

Subway has been using big deals with large local operators to reverse the trend. Alhokair has been around since 1990 and operates some 1,700 stores in Saudi Arabia. It also has more than 10,500 employees.

The operator’s “extensive knowledge of the food and beverage industry and experience in the Saudi market advantageously positions us to lead the integration and growth of unique restaurant concepts, particularly QSRs, to deliver a high-quality experience for our guests,” Faisal Younes, head of food and beverages with the retailer, said in a statement.

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