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Subway plans to remodel 10,500 locations

The company and its vendors are providing more than $100 million in grants to operators to spur remodels by the end of 2020.
Photograph courtesy of Subway

Subway and its vendors are expected to provide franchisees with more than $100 million in grants to help fund remodels to about 40% of the chain’s units over the next year and a half, the company said Thursday.

The Milford, Conn.-based sandwich giant, along with its vendors, is providing operators with $10,000 grants to help spur remodels. The grants fund about 25% of the cost of the remodel, the company said.

Subway said that 10,500 of its nearly 25,000 U.S. locations expect to take advantage of the program and get a new look by the end of 2020.

The company has remodeled 1,400 locations worldwide, with another 900 underway, the company said.

Add it all up, and Subway, its vendors and its franchisees are investing a total of $400 million into remodels over the next 18 months.

“By signing up for the remodel program, the franchise owners are making an investment, and showing their trust in the brand,” Chief Development Officer Don Fertman said in a statement.

Subway is undertaking a significant effort to transform its image and its stores as the company looks to recover from a six-year sales slump.

System sales declined 3.6% in the U.S. last year to $10.4 billion, according to data from Technomic’s Top 500 Chain Restaurant Report. Unit count declined by 4.3%. The chain has shed more than 2,300 locations domestically since it hit a peak of 27,103 locations in 2015.

The company is also fending off controversies inside its franchise operations. The New York Post detailed how Subway will put operators out of business over small violations of the franchise agreement, and the New York Times revealed that development agents will terminate operators and take over their stores themselves.

Subway is investing heavily behind its improvement efforts, however. In addition to the grant program, the company spent $80 million last year to enable operators to add new beverage stations and sauce options.

The company has also made numerous innovations on its menu, adding new wrap sandwiches and Cheesy Garlic Bread. It is also testing sandwiches made with King’s Hawaiian bread and milkshakes made with Halo Top ice cream.

The company is also aggressively adding delivery at its U.S. restaurants as it works to compete with smaller sandwich shops Jimmy John’s, Jersey Mike’s and Firehouse Subs, all of which have taken market share in recent years.

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