Subway Signs Deal To Open 4,000 Stores in China — Retail Bum

Quick service restaurant (QSR) chain Subway has entered into an agreement to open 4,000 sandwich shops in China over the next 20 years.

The planned store openings, which would mark a seven-fold increase in Subway’s footprint in the country, are part of the company’s strategy to turn around its business with store expansion, remodeling of stores, updating menus, and launching new marketing campaigns.

While Subway is focusing on boosting its presence in China, it has been rapidly shutting down thousands of stores across its home market as it is reeling from a host of previous business decisions, such as offering discounts that cut into franchisees’ profit margins and over-expansion.

Despite these challenges, the company still saw its comparable sales rise by 12.1% in Q1, according to Reuters.

Subway is far from the only company betting on growth prospects in China. For example, Starbucks plans to open 3,000 new locations in China by the end of 2025.

In Subway’s case, the QSR chain is looking to boost its presence in China through a partnership with master franchisee Shanghai Fu-Rui-Shi (FRS) Corporate Development Co Ltd, which is funded by a group of investors, including Asia Investment Capital. The deal will give FRS exclusive rights to launch and manage all Subway locations in the country.

“China is a key market with significant long-term growth opportunity, and we look forward to bringing the Subway experience to even more guests in the region,” Subway Chief Executive John Chidsey said in a statement.

Originally published at https://retailbum.com on June 7, 2023.