Launching your own restaurant can be a risky venture if you lack the expertise to operate an eatery. For those entrepreneurs who have always appreciated a good meal and have aspired to own a restaurant, a franchise might seem like a secure choice. After all, with a large corporation providing support, supplies, location, and a roadmap for operations, how unstable could it really be?
Unfortunately, if you’re a Subway franchisee, the reality is quite unstable. Even as America’s largest fast-food chain, Subway couldn’t avoid shutting down numerous locations starting in 2024. In 2025, the situation worsened for Subway when The Street reported that a California-based Subway franchisee filed for Chapter 11 bankruptcy. The reasons remain unclear, but it’s evident that Subway is in trouble and its franchisees are experiencing the impact.
What happened to the Subway franchisee who filed for bankruptcy?
Many chain restaurants struggled in 2024, and in 2025, the restaurant industry as a whole might face another challenging year, including fast food. According to The Street, a Subway franchise owner in Montebello, California, filed a petition on June 25, 2025, in the U.S. Bankruptcy Court for the Central District of California. The Subchapter V petition aimed to restructure the business to keep it operational and protect the franchise, listing assets between $50,000 to $100,000 and liabilities between $100,000 to $500,000, without specifying a reason in the bankruptcy filing.
Unfortunately, this isn’t the first instance of a Subway franchise owner filing for bankruptcy. As reported by Restaurant Business, a Subway franchisee in Texas filed for Chapter 11 bankruptcy for River Subs LLC, which operated 48 Subways in the San Antonio area and incurred a $3 million loss in a 2023 wrongful death lawsuit. Although court documents indicated assets and liabilities ranging from $1 million to $10 million, no official cause was cited for the bankruptcy.
How much money does a typical Subway franchise make?
Subway is a recognized name in fast food, and compared to Quiznos, Jersey Mike’s, and Jimmy John’s, it offers considerable value for customers craving a sandwich. As a franchise owner, Subway can be a lucrative business, with the average outlet generating approximately $400,000 in annual revenue, as noted by Dr. Franchise. The franchise fee to start a Subway is $15,000.
Subsequently, owners contribute 12% of weekly gross sales in royalties and advertising fees. After accounting for wages, fees, and franchise expenses, a typical Subway outlet averages $40,000 to $50,000 annually. Although Subway is often regarded as one of the most affordable franchises to establish, Business Insider reported that in 2021, Subway’s franchise disclosure agreement increased significantly, from approximately $139,550 to $342,400 in 2020 to between $207,050 to $476,900 in 2021. Despite the higher costs, Subway franchises remained relatively inexpensive to start compared to McDonald’s, which required an initial investment of $1.3 million to $2.3 million.
