In challenging economic times, Americans want value, but price does not always equal value.
Chains that have built their business around a price point have struggled as consumers have moved the goalpost.
“When I first started, it was all about price. Now, it’s about consumers’ willingness to pay more, but you’ve got to give them more,” Technomic managing principal Joe Pawlak told Nation’s Restaurant News (NRN).
“Consumers have shown they’re willing to pay a higher price — at fine dining or steakhouses and such — but you’ve got to prove to (them) that it’s worth it, whether through craveability, high quality, atmosphere, or environment.”
No chain has suffered from this changing perception of value as much as Subway. It lost more than 7,000 locations since its 2015 peak. Now, the sandwich chain, famous for $5 footlongs and imprisoned former spokesperson Jared Fogle, has suffered another blow, as a key franchise operator has filed for Chapter 11 bankruptcy.
Subway franchise operator files Chapter 11 bankruptcy
MTF Enterprises, a Subway operator with 43 stores in Maine, New Hampshire, Pennsylvania, and Virginia, filed for Chapter 11 bankruptcy protections in January, according to a court filing on PacerMonitor.
“The operator accessed funding through short-term Merchant Cash Advance loans, which left it on the hook for a percentage of future sales. In October, one of the franchisee’s MCA lenders sent a notice to Stripe claiming MTF had fallen into default on its loans and claiming a lien on sales; the MCA lenders sent similar notices to Block — Square’s parent company — and American Express in December, court records show,” Restaurant Dive reported.
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MTF Enterprises claims that the lien claims “improperly seized or interfered with the collection of sales revenue,” according to the court documents.
The franchisee’s stores have remained open.
Neither Subway nor MTF Enterprises has commented on this specific Chapter 11 bankruptcy situation.
MTF Enterprises Chapter 11 bankruptcy: key facts
- MTF Enterprises filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania on January 21, 2026.
- The case is officially MTF Enterprises, LLC, Case No. 26‑10237 and was assigned to Judge Patricia M. Mayer.
- MTF operates 43 Subway restaurant locations across Pennsylvania, Maine, New Hampshire, and Virginia.
- The company listed assets of $500,000 to $1 million and liabilities between about $1 million and $10 million in initial court filings.
- A primary cause of financial distress cited in the filing was Merchant Cash Advance (MCA) loans, which required frequent draws on future sales and strained cash flow.
- MTF’s owner (Michael Fay) stated in court documents that the “continued cash drain” from these cash‑advance repayments was a key factor driving the insolvency.
- The bankruptcy filing includes MTF’s business affiliates, such as a childcare operation, indicating broader corporate restructuring.
- MTF intends to continue operating its Subway restaurants “as usual” under Chapter 11 while pursuing a reorganization plan.
Source: PacerMonitor
Subway sales have dropped
Subway’s broader struggles have been driven by slowing sales growth.
“While the chain achieved its highest-ever average unit volume in 2024 at $490,000, this figure represents just a 1% increase over 2023,” according to Restaurant Business.
During that same period, menu prices rose by 4%, which suggests that the average Subway actually experienced a net loss in customer traffic, Restaurant Business added.
Owners also face rising costs.
“We are operating in an environment today of 3% unemployment, quickly increasing wages, more complicated operations, too many restaurants that have been built and ever-changing remodel demands,” Keith Miller, a Subway operator and franchisee advocate, told Restaurant Business. “It’s a perfect storm squeezing the margins of franchise owners.”
Subway also suffers from a lack of enforced standards. Having visited dozens of locations over the past few years, I’ve seen cleanliness and operations vary widely, reflecting the chain’s struggles with traffic and average unit volume.
Related: 70-year-old furniture retailer files Chapter 7 after sudden shutdown
Subway’s performance by store (2024)
- Average unit volume: $490,000
- Year-over-year growth: 1% (against 4% menu price increases)
- U.S. system sales: $9.5 billion system sales
- Change: -3.8% from 2023
Source: Deep Research Global
U.S. Subway closures & footprint shrinkage
- Subway closed hundreds of U.S. locations in 2024, with roughly 600-631 closures reported in franchise disclosure data, bringing total domestic restaurants below 20,000 for the first time in about two decades, according to Business Insider.
- According to reporting based on public filings, the chain finished 2024 with about 19,502 U.S. stores, after shedding hundreds in 2024 alone, FOX 29 reported.
- The 2024 closures continued an eight‑year streak of net U.S. location declines, reported NRN.
- Over the longer term, Subway has shed thousands of U.S. units since its peak (27,100) in 2015, representing a net loss of about 7,600 locations over less than a decade, added NRN.
“Subway remains the largest U.S. restaurant chain by unit count. It still operates 2,600 more locations than the next biggest, Starbucks, which finished 2024 with just under 17,000 coffee shops,” Restaurant Business reported.
Related: Classic 83-year-old pizza chain shutters restaurants without notice
