Subway To Expand To China By Opening 4,000 Stores

Subway announced on Tuesday that it has secured an agreement with a master franchisee to open roughly 4,000 new sandwich stores in mainland China over the next 20 years.

International expansion is a crucial development strategy for the privately held US-based brand, which is currently undergoing a turnaround plan that includes remodelled restaurants, revised menus, and a splashy marketing campaign.

While it aims to expand internationally, the corporation has been closing thousands of U.S. stores due to a variety of issues such as over-expansion and discounts that have undermined franchisee revenues.

Nonetheless, Subway's global comparable sales increased 12.1% in the first quarter.

Other corporations, such as Starbucks, are expanding their presence in China, with plans to open 3,000 new outlets by 2025.

The arrangement between Subway and master franchisee Shanghai Fu-Rui-Shi Corporate Development Co Ltd (FRS) is the largest in Subway's history. FRS is backed by a group of private investors led by Asia Investment Capital.

FRS will have the management and development rights to all Subway locations in China. The 4,000 new locations would represent a seven-fold increase in Subway's current footprint in the area.

"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," said Subway CEO John Chidsey in a statement.