Industry News
From a 2015 peak of 27,000 US restaurants, Subway has shed roughly 8,345 net units over a decade — including 729 in 2025 — as the world's largest sandwich chain rightsizes its footprint.
Subway closed a net 729 US restaurants in 2025 — gross closures minus new openings — bringing the system to 18,773 US units, down from approximately 27,000 at the 2015 peak.
Sources
Ready to explore?
Yes. At 18,773 US units in 2025, Subway remains larger than Starbucks (approximately 16,860 US units) and McDonald's (approximately 13,706 US units) by US unit count, despite a decade of net declines.
Same-store sales at Subway have been declining since 2012. The franchisor's stated rationale for the 2025 closures is rightsizing — closing locations that cannot sustain four-wall operating profit and concentrating remaining capital in higher-volume sites.
Conservatively. Request the most current FDD, model AUVs against franchisee-validation calls rather than the system average, evaluate trade-area density carefully, and treat any historic Item 19 representations with caution given a decade of declining same-store sales.
Subway closed a net 729 US restaurants in 2025, ending the year at approximately 18,773 units — a tenth consecutive year in which gross closures exceeded new openings.[1] The figure was disclosed as part of the company's ongoing rightsizing program, which the franchisor has framed as a deliberate effort to concentrate the system in higher-volume locations rather than chase total unit count.[2]
The decline is part of a longer trend. Subway peaked at approximately 27,000 US restaurants in 2015. Over the decade since, the chain has shed roughly 8,345 net units — a contraction that, taken alone, would rank among the five largest restaurant chains in the country.[1] Same-store sales at Subway have been declining since 2012; the unit count has tracked that trajectory with a multi-year lag.[3]
Despite the contraction, Subway remains the largest US restaurant chain measured by unit count. At 18,773 stores it sits ahead of Starbucks (approximately 16,860 US units) and McDonald's (approximately 13,706 US units).[1] That distinction, however, reflects the magnitude of the historical buildout rather than current operating health.
The 2025 closures included franchisee terminations, non-renewals, and operator-initiated exits across most US markets. Subway operates as an almost entirely franchised system; the franchisor itself does not own and operate the closing locations, which means the contraction is being absorbed by individual franchisees and the secondary brokerage market.
For prospective Subway franchisees and for buyers evaluating any large legacy QSR system, a tenth consecutive year of net decline carries direct implications.
Item 19 reliability over time: Subway does not currently provide an Item 19 financial performance representation in its US Franchise Disclosure Document, which already places the burden of unit-level diligence on the buyer. A decade of declining same-store sales means historical AUV references that buyers may encounter from third parties or current franchisees are likely to overstate what a new operator can expect from a comparable trade area in 2026.
Item 20 verification is essential: With 729 net closures in a single year, Item 20 of the current FDD will list a substantial number of terminated, non-renewed, and ceased franchisees. Buyers should request the most current FDD, count the terminations and closures by state, and call a representative sample of those operators directly. The reasons exiting franchisees give for leaving — sales pressure, royalty load, lease costs, market saturation — are the most reliable forward indicator available to a prospective buyer.
Trade-area saturation: The Subway closure pattern has historically clustered in markets with high unit density. Buyers evaluating a specific territory should map all current Subway locations in the trade area, identify which have closed in the last 24 months, and evaluate whether the remaining locations have absorbed the lost transactions or whether the demand simply migrated to competing brands.
Royalty structure and break-even math: Subway charges an 8% royalty plus an advertising contribution, giving the brand one of the higher total ongoing fee loads in the QSR sandwich segment. At AUVs that have been compressing for more than a decade, that fee structure leaves franchisees less margin to absorb labor and food cost increases than competing concepts with lower royalty rates.
System contraction as buyer leverage: A franchisor managing a sustained net decline has incentives that can favor a motivated, well-qualified buyer. Buyers entering negotiations should ask explicitly about transfer-fee discounts, remodel deferrals, and territory accommodations — the franchisor has reasons to retain quality operators that may not be visible in the standard FDD terms.
Subway's stated path forward is operational: a remodel program, a streamlined menu, and a focus on concentrating the system in higher-volume locations. Whether those initiatives stabilize same-store sales is the single most important variable for current and prospective franchisees over the next 24 months.
For any new buyer in 2026, the prudent approach is to model the trade area conservatively. Treat current franchisee revenue references as the upper bound rather than the base case, model royalty and ad-fund contributions at full rate without promotional discounts, and budget for cost inflation at industry averages rather than relying on franchisor-projected efficiency gains.
The broader QSR sandwich category is also experiencing its own competitive shift. Jersey Mike's, which separately filed a confidential IPO at a $12 billion target valuation in April 2026, is expanding into the void Subway has been creating — particularly in higher-income suburban markets where Subway's value-positioning has not held. Buyers underwriting any Subway location should evaluate competitive density from Jersey Mike's, Jimmy John's, Firehouse Subs, and regional chains within a defined trade area before committing capital.
Subway's closure trajectory does not by itself disqualify the brand for every buyer — a well-located, high-AUV Subway with a long lease at favorable rent and an experienced operator can still produce acceptable returns. But the system-level signal is clear, and the burden of proof on any new investment rests squarely on the buyer's diligence rather than on franchisor-supplied projections.