Subway’s closures accelerated in 2019, sending the chain to its smallest size in a decade even as the company’s executives started pushing operators to sell their locations rather than close them.
The Milford, Conn.-based chain closed a net 1,106 U.S. locations, or 4.5% of its restaurants, finishing 2019 with an estimated 23,692 units, according to Restaurant Business sister company Technomic. That’s the fewest since 2009, when the chain operated 23,034 restaurants.
Meanwhile, two more C-level executives have left the company as it continues to overhaul its executive team with the addition of CEO John Chidsey.
Len Van Popering, the company’s chief brand and innovation officer, is leaving Subway as part of a corporate reorganization that eliminated the position. Bethany Appleby, the company’s chief legal officer, is also leaving this month, sources said. Ilene Kolbert has been tabbed to take over the position.
The departures come as part of a massive wave of changes among senior-level executives at Subway, as new hires arrive and existing leaders opt to depart. The company has hired at least a half-dozen new senior executives since October, while others have retired and announced departures.
“We are committed to maximizing business performance and streamlining the business model [to] help us realize greater efficiencies across the organization,” Chidsey said in a statement. “We are thankful for the significant contributions each of them made to the Subway brand and our franchise owners.”
Much of the work the company is doing is intended to stem its unit count decline.
Subway’s U.S. unit count has shrunk annually since peaking at 27,103 locations in 2015. Since then, its size has shrunk by nearly 13%—though at just less than 24,000 restaurants, it remains considerably larger in terms of unit count than both McDonald’s and Starbucks, the next two largest restaurant chains.
But Subway’s international unit count has also started to shrink in more recent years. The number of Subway locations outside the U.S. declined by 1.6% in 2019, according to Technomic, the second-straight year of declines. Since peaking at 18,004 international restaurants in 2017, Subway’s international presence has declined by 3.3%.
The company’s reorganization is designed in part to simplify its international business and focus its talent closer to those international markets.
Back in the U.S., Subway has grown more aggressive recently in trying to prevent its unit closures.
Late last year, Subway started requiring operators to fill out a questionnaire and go before a committee before closing a location. That effort was designed to find franchisees willing to buy locations before closing them.
Such an effort will likely stem closures in the coming years as more of its restaurants are transferred rather than shut down altogether.
Subway’s unit count decline has come amid a host of challenges, including growing competition from chains such as Jersey Mike’s, Jimmy John’s and Firehouse Subs as well as internal issues such as the imprisonment of former longtime spokesman Jared Fogle.
The chain has struggled to break out of a multiyear sales rut that has helped to cause much of the unit count decline. Technomic projects the sandwich giant to have fallen out of the top five largest restaurant chains in the U.S. last year, which would be the first time Subway wasn't among them since 2001.