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Subway closed 23 locations in Oregon and Washington after the brand terminated a struggling local operator out of Portland.
The stores were owned by Cap Ten Enterprises and feature locations in Oregon and Southwest Washington. KOIN in Portland quoted the operator saying the company’s problem started when the store’s bank account was hacked and drained of “hundreds of thousands of dollars.”
Photos of one of the locations, provided to Restaurant Business, indicate the restaurants are “temporarily” closed. Bottles of beverages are still inside coolers.
“Our priority is to ensure guests can continue enjoying freshly made, high-quality delicious food by identifying experienced operators within our system who can quickly take ownership and reopen the restaurants,” a Subway spokesperson said in an email.
Subway has more locations than any other U.S. restaurant chain, with some 20,000 locations. Units close all the time for a variety of reasons.
But Subway operators have been closing units for years, largely due to low unit volumes exacerbated by rising costs for food and labor.
Subway has some of the lowest average unit volumes in the restaurant industry. They averaged $490,000 per location 2023, even after increases in the past three years, according to Restaurant Business sister company Technomic.
Subway has closed some 7,000 restaurants since 2015, including more than 400 locations last year. Those closures, and the condition of the chain’s base of franchisees were a primary concern last year as Subway was being marketed to potential buyers. It was ultimately sold to the private-equity firm Roark Capital.
Subway has put some hope behind a push for larger operators, both from within and outside the system.
Sales this year are not helping matters. The Miami-based franchise has lost sales and traffic this year as consumers shift spending and dine out less often at fast-food restaurants.
The company is pushing more value in a bid to get more customers in the door. Subway plans a $6.99 digital-only Footlong subs offer starting next week and plans buy-one, get-one-free offers for the balance of the year to match other fast-food chains pushing more discounts.
But franchisees argue that such discounts cut their profitability and make it more difficult for them to keep restaurants open.
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