The most franchised company in the world isn’t McDonald’s or Starbucks

Despite the seeming ubiquity of McDonald’s Golden Arches and the Starbucks’ twin-tailed mermaid, sandwich chain Subway actually has the most locations of any restaurant worldwide. In 2017, Subway had 43,912 stores around the world, beating second-place McDonald’s at 37,241 and third-place Starbucks at 27,339 locations.

This number, however, belies the economic reality: while McDonald’s and Starbucks have mostly grown their sales every year for the last five years, Subway sales have been slipping since 2014, and foot traffic is down 7.6 percent over the last 12 months, according to food industry market research firm Technomic. Shortly after this slump began, Subway started closing stores. More than 350 were shuttered in 2016; more than 800 in 2017; and another 500 in 2018.

Industry analysts point to a few reasons for this, but especially a lack of innovation. While McDonald’s and Starbucks continually create new products and store designs to evolve along with changing consumer preferences, Subway lags behind. Last summer, the sandwich shop announced its first major redesign, Fresh Forward, in nearly 20 years.

Recently, CEO Suzanne Greco, younger sister of Subway founder Fred DeLuca, retired. As the company searches for its first non-DeLuca family member CEO since its founding in 1965, many are wondering whether this change can turn the tide for the world’s most prolific restaurant chain. Trevor Haynes, who headed up the chain’s business development, is serving as chief executive on an interim basis.

Despite the seeming ubiquity of McDonald’s Golden Arches and the Starbucks’ twin-tailed mermaid, sandwich chain Subway actually has the most locations of any restaurant worldwide. In 2017, Subway had 43,912 stores around the world, beating second-place McDonald’s at 37,241 and third-place Starbucks at 27,339 locations.

This number, however, belies the economic reality: while McDonald’s and Starbucks have mostly grown their sales every year for the last five years, Subway sales have been slipping since 2014, and foot traffic is down 7.6 percent over the last 12 months, according to food industry market research firm Technomic. Shortly after this slump began, Subway started closing stores. More than 350 were shuttered in 2016; more than 800 in 2017; and another 500 in 2018.

Industry analysts point to a few reasons for this, but especially a lack of innovation. While McDonald’s and Starbucks continually create new products and store designs to evolve along with changing consumer preferences, Subway lags behind. Last summer, the sandwich shop announced its first major redesign, Fresh Forward, in nearly 20 years.

Recently, CEO Suzanne Greco, younger sister of Subway founder Fred DeLuca, retired. As the company searches for its first non-DeLuca family member CEO since its founding in 1965, many are wondering whether this change can turn the tide for the world’s most prolific restaurant chain. Trevor Haynes, who headed up the chain’s business development, is serving as chief executive on an interim basis.

Francisco Araújo

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Francisco Araújo

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