Subway IP LLC is an American multinational fast-food restaurant franchise and the world's largest single-brand restaurant chain by location count, co-headquartered in Shelton, Connecticut, and Miami, Florida. Founded on August 28, 1965, by 17-year-old Fred DeLuca and Dr. Peter Buck in Bridgeport, Connecticut, Subway transformed fast food by offering fresh, made-to-order submarine sandwiches on freshly baked bread. Owned by private equity leader Roark Capital Group following a landmark $9.55 billion acquisition, Subway reported $925 million of revenue and $689 million of net income in 2025, according to its 2026 franchise disclosure document, and ended that year with 18,773 U.S. restaurants. Jonathan Fitzpatrick has been CEO since July 28, 2025.
What Does Subway Do?
Subway franchises, markets, and operates the world's largest submarine sandwich restaurant network:
- The Subway Series Chef-Curated Menu: Premium pre-crafted specialty subs (The Titan, The Monster, MexiCali, The Grand Slam) ordered by name or number with optimized meat-to-cheese formulas.
- Classic Custom Submarines: Made-to-order 6-inch and Footlong sandwiches (Italian B.M.T., Cold Cut Combo, Tuna, Meatball Marinara, Turkey Breast) prepared on freshly baked daily bread.
- Footlong Sidekicks (Cinnabon & Auntie Anne's): Warm 12-inch snacks including Footlong Cinnabon Churros, Auntie Anne's Pretzels, and Footlong Chocolate Chip Cookies.
- No Bready Bowls & Protein Salads: Low-carb, keto-friendly salad bowls featuring custom meats and cheeses served over crisp greens.
- Automated 24/7 Smart Kiosks: AI-powered unattended grab-and-go refrigerated deli units in airports and college campuses.
How Does Subway Make Money?
Subway operates a pure 100% asset-light franchised royalty and intellectual property licensing model:
- Franchise Royalty Fees (~62% of Corporate Revenue): Collecting an 8.0% weekly royalty on gross sales across 37,000+ franchised restaurants.
- Advertising Fund Contributions (~24% of Corporate Revenue): Collecting a mandatory 4.5% marketing fee on gross sales to fund global TV, digital, and sports sponsorships.
- Master Franchise & Country Rights (~9% of Corporate Revenue): Licensing multi-thousand-unit international development rights to large institutional operators.
- Digital Ecosystem & Sidekicks Merchandising (~5% of Corporate Revenue): Mobile loyalty app fees, delivery surcharges, and co-branded snack licensing revenues.
The Ventless Kitchen Moat: Why Subway Conquered Global Real Estate
While burger and fried chicken giants like McDonald's, Burger King, and KFC require large $2 million building investments with complex underground grease traps and expensive rooftop exhaust ventilation, Subway pioneered The Ventless Kitchen Architecture.
Because Subway sandwiches are assembled with pre-cooked proteins, fresh sliced vegetables, and baked bread using small countertop convection ovens, Subway produces zero commercial grease exhaust. A Subway restaurant can operate in a tiny 500-square-foot footprint with a basic electrical connection and running water. This allowed Subway franchisees to open profitable locations inside gas station convenience stores, military bases, subway stations, zoo kiosks, and university student unions, achieving a physical footprint density that no other fast-food brand on Earth can match.
The Subway Series & Footlong Sidekicks: The Transformation Playbook
For decades, Subway relied entirely on the 'Build-Your-Own' model, forcing every customer to choose every single ingredient (bread, cheese, meat, vegetables, sauces). While popular, this model slowed down drive-thru lane speed, created ordering fatigue, and capped average transaction ticket sizes.
then-CEO John Chidsey disrupted this with The Subway Series. By creating pre-curated, chef-crafted recipes ordered simply by name or number (e.g., '#1 The Philly'), Subway cut customer ordering time in half and accelerated drive-thru throughput. In 2024, Subway introduced Footlong Sidekicks, partnering with Cinnabon and Auntie Anne's to offer 12-inch churros, pretzels, and cookies for $2 to $5.
The On-Site Slicer Revolution: Elevating Ingredient Quality
In 2023, Subway invested over $80 million alongside its franchisees to install state-of-the-art automatic deli meat slicers in all 20,000+ US locations. For years, Subway used pre-sliced meats shipped in plastic bags from centralized commissaries.
By slicing whole ham, turkey, provolone cheese, and roast beef fresh on-site every morning, Subway closed the quality gap with boutique fast-casual sub competitors (Jersey Mike's, Jimmy John's). The freshly sliced meats retain more natural moisture, improve flavor perception, and allow franchisees to save millions in centralized meat-processing packaging costs, elevating brand reputation while expanding unit profitability.
Table of Contents
Subway Key Facts
| Company | Subway |
|---|---|
| Financials | $925M (FY2025, last reviewed October 2026) |
| Valuation | $9.6B (private company, last reported) |
| FY2025 net income | $689.0M |
| Last reviewed | By Swet Parvadiya, Founder & Editor - October 2026 |
| Founded | 1965 |
| Founder(s) | Fred DeLuca, Dr. Peter Buck |
| CEO | Jonathan Fitzpatrick |
| Headquarters | Shelton, Connecticut & Miami, Florida, United States |
| Industry | Fast Food |
| Employees | 2,000+ |
Subway Company Profile: Revenue, Business Model & Strategy
"Subway closed a net 729 U.S. stores in 2025, yet its corporate net income rose to $689 million on $925 million of revenue, according to its 2026 franchise disclosure document."
Why Subway Wins
Subway's strengths are brand recognition in more than 100 countries, the largest U.S. sandwich footprint, cheap fryer-free store builds that fit small sites, and an all-franchise model that turned $925 million of 2025 revenue into $689 million of net income.
Subway operates in a competitive market alongside McDonald's Corporation, KFC, Starbucks Corporation. Analysts frequently compare Subway and McDonald's Corporation due to their overlapping products, target markets, and strategic positioning. See full comparison →
Subway is a 100% franchised sandwich chain founded in 1965 and owned by Roark Capital since April 2024. It reported $925 million of revenue and $689 million of net income in 2025. Jonathan Fitzpatrick has been CEO since July 2025.
Revenue
$925.0M
Founded
1965
Employees
2K+
Key Facts
- Founded: Subway was established in 1965 and is headquartered in Shelton, Connecticut & Miami, Florida, United States.
- Revenue: Subway had $925.0M in annual revenue (FY2025).
- Scale: Subway employs 2,000 people globally.
- Business Model: Subway owns no restaurants.
- Competitive Edge: Subway's main advantage is reach and low build cost.
How Subway Makes Money
Capital Allocation & Scaling Mechanics
Franchisees pay an upfront franchise fee plus a royalty of 8% or 10% of sales depending on their agreement, along with an advertising fund contribution. Subway also collects vendor rebates through its supply chain, which reached $136.5 million in 2025, or 14.8% of revenue, up from $44.7 million (5.4%) in 2021. The old development agent system, in which regional agents sold and monitored stores for a cut of royalties, was largely brought in-house under John Chidsey. Because stores need no fryers or hoods, they fit into small sites such as gas stations, airports and campuses.
What Is Subway's Growth Strategy?
Under CEO Jonathan Fitzpatrick, Subway is focused on franchisee profitability and value. Steps since mid-2025 include a one-time cash rebate to franchisees based on first-half 2025 sales, three new regional presidents, a regional marketing structure that replaced the global CMO role in 2026, a relaunched Sub Club loyalty program, and an April 2026 value menu. Abroad, it relies on large master franchisees, such as the 2023 agreement to open about 4,000 stores in mainland China over 20 years.
How Much Revenue Does Subway Generate?
Subway is privately owned, and its restaurants are operated by franchisees. Restaurant Business, citing Subway's 2026 franchise disclosure document, reported about $925 million of franchisor revenue and $689 million of franchisor net income for 2025, versus $972 million and $15.4 million in 2023. Restaurant Dive separately reported about $397 million of franchisor net income for 2024. These are not global restaurant sales or an individual franchisee's earnings. The linked news reports describe the filing, but the filed FDD itself was not available for direct verification in this review. Subway's franchise FAQ lists an 8% royalty and a 4.5% advertising contribution on gross sales, subject to its disclosure document. Restaurant Business reports that royalty revenue fell over 2023-2025 while vendor rebates rose, and that the acquired business had about $5.7 billion of debt at year-end 2025. Those franchisor-level figures cannot be used to calculate the sales or profit of a typical restaurant.
| Financial Metric | Estimated Value (2026) |
|---|---|
| Employee Count | 2,000 + |
| Latest Annual Revenue | $925.0M (FY2025) |
Historical Revenue Chart
Subway Annual Revenue History
All figures in USD.
| Fiscal Year | Revenue Figure | YoY Change |
|---|---|---|
| FY2022unaudited | $881.1M | N/A |
| FY2023 | $972M | N/A |
| FY2025 | $925M | N/A |
The source for each year is listed on the Subway financials page.
Core Strength
Over 37,000 restaurants across 100+ countries providing leading physical consumer accessibility.
Key Weakness
Dense domestic store clustering historically caused franchisee cannibalization and store closures.
Who Are Subway's Main Competitors?
Subway's closest rivals are other sandwich chains: Jersey Mike's (bought by Blackstone in 2025), Jimmy John's (owned by Roark's Inspire Brands), Firehouse Subs and Potbelly. It also fights McDonald's, Taco Bell and other quick-service chains for value-minded lunch traffic. Subway still has more U.S. sandwich units than any rival, but Jersey Mike's has gained share with higher per-store sales, and Subway answered in April 2026 with its first permanent value menu of 15 entrees under $5. Subway's stores are cheap to build. They need no fryers or exhaust hoods, so they fit in spaces too small for a burger chain. The cost of that reach is density: many US stores sit close together and average about $500,000 in annual sales, well below Jersey Mike's. Subway publishes no annual report; its 2026 franchise disclosure document shows $925 million of revenue and $689 million of net income in 2025. Under CEO Jonathan Fitzpatrick it has paid franchisees a one-time cash rebate and appointed three regional presidents.
| Top Competitors | Head-to-Head Analysis |
|---|---|
| McDonald's Corporation | Compare vs McDonald's Corporation→ |
What Is Subway's Full Historical Timeline?
Historical Timeline & Strategic Pivots
Key Milestones
1965 - Pete's Super Submarines Opens in Bridgeport, CT
Peter Buck opened their first sub shop with a $1,000 seed loan.
1968 - Rebranded as 'Subway' with Arrow Logo
Adopted the well-known Subway name and yellow-and-green arrow branding.
1974 - Launch of the Franchise Expansion Model
Began franchising in Connecticut, igniting decades of exponential physical expansion.
1984 - First International Store Opens in Bahrain
Expanded outside North America, beginning global international franchising.
2008 - Launch of the Iconic '$5 Footlong' Campaign
Introduced the viral $5 Footlong promotion, driving record sales during the Great Recession.
2011 - Largest Restaurant Chain by Locations
Subway passed McDonald's in 2011 to become the largest restaurant chain in the world by number of locations.
2015 - Suzanne Greco becomes CEO
Suzanne Greco became CEO of Subway in 2015. Chief executive of Subway from 2015 to 2019.
2021 - Launch of the 'Eat Fresh, Refresh' Overhaul
Initiated the largest menu and ingredient modernization in company history under then-CEO John Chidsey.
2024 - Roark Capital Completes Subway Purchase
Roark Capital closed its purchase of Subway in April 2024 in a deal valued at about $9.55 billion, including an earn-out.
2025 - Jonathan Fitzpatrick Becomes CEO
Former Driven Brands CEO Jonathan Fitzpatrick took over as Subway CEO on July 28, 2025.
2026 - First-Ever Value Menu
Subway launched a value menu of 15 entrees under $5 in April 2026.
Risks & Weaknesses
Analytical AssessmentPrimary Risk Factor
The biggest risk is a shrinking royalty base. Subway has closed U.S. stores for 10 straight years, royalty revenue fell about 10% from 2023 to 2025, and the business carries about $5.7 billion of securitized debt from the Roark buyout. Franchisee tension over loyalty discounts and value pricing adds pressure.
Risk assessment based on public filings, SWOT analysis, and verified industry data. Not financial advice.
How Did Subway Start and Grow?
Established
1965
Fiscal Revenue (FY2025)
$925.0M
Workforce
2K+
HQ Location
Shelton, Connecticut & Miami, Florida, United States
: The Strategic Shift That Created a Behemoth
Pivoted from owning local Connecticut sub shops to franchising intellectual property to independent operators.
Explore Subway In Depth
Detailed research across every dimension of Subway — history, financials, leadership, and strategy.
Company History
Subway is the largest sandwich chain in the U.S. by unit count and one of the largest restaurant brands in the world. It is entirely franchised, owned by Roark Capital since April 2024, and run from Miami. The U.S.
Full Subway history →Revenue & Financials
Subway had $925M in revenue for fiscal year 2025. Data covers 3 fiscal years.
Subway financials →Founders
Subway was founded by Fred DeLuca, Dr. Peter Buck in 1965 in Bridgeport, Connecticut, United States. Explore each founder's background, motivations, and their role in building the company.
Subway founders →CEO & Leadership
Subway is currently led by Jonathan Fitzpatrick. Explore the full CEO history — leadership transitions, tenures, and the strategic decisions of each chief executive.
Subway CEO history →Business Model
Subway owns no restaurants. Franchisees pay an upfront franchise fee plus a royalty of 8% or 10% of sales depending on their agreement, along with an advertising fund contribution.
How Subway makes money →Acquisitions
Subway has completed 3 documented acquisitions. Explore the full acquisition history and strategic rationale behind each deal.
Subway acquisitions →Competitive Strategy
Under CEO Jonathan Fitzpatrick, Subway is focused on franchisee profitability and value. Steps since mid-2025 include a one-time cash rebate to franchisees based on first-half 2025 sales, three new regional presidents,…
Subway strategy →Related Company Comparisons
Our analysts compile business strategy profiles from public financial filings, press releases, and analyst reports. Each profile is reviewed for accuracy before publication by our editorial desk and updated on a rolling basis.
Frequently Asked Questions About Subway
What is Subway and what quick-service restaurant (QSR) operations does it run?
Subway (Subway IP LLC) is an American multinational fast-food restaurant franchise and the world's largest single-brand restaurant chain by total location count. Operating approximately 37,000 restaurants across more than 100 countries, Subway specializes in made-to-order submarine sandwiches (Footlongs and 6-inch subs), wraps, salads, and fresh-baked cookies.
Where is Subway headquartered and who owns the company today?
Subway operates dual corporate headquarters in Shelton, Connecticut, and Miami, Florida. In April 2024, private equity firm Roark Capital Group completed the acquisition of Subway for approximately $9.55 billion, transitioning the chain from its founding families to institutional private ownership.
Who is the Chief Executive Officer leading Subway?
Jonathan Fitzpatrick has been CEO of Subway since July 28, 2025. He previously led Driven Brands for more than 12 years and was a senior Burger King executive. He succeeded John Chidsey, CEO from November 2019, who retired at the end of 2024 after overseeing the sale to Roark Capital.
How does Subway make money?
Subway owns no restaurants. It earns royalties of 8% or 10% of franchisee sales, upfront franchise fees, and vendor rebates from its supply chain. Its 2026 FDD shows $925 million of revenue and $689 million of net income in 2025; vendor rebates alone were $136.5 million. Technomic put U.S. system sales at about $9.5 billion in 2024.
Who are Subway's main competitors?
Subway's direct rivals are sandwich chains Jersey Mike's, Jimmy John's, Firehouse Subs and Potbelly. It also competes for lunch traffic with McDonald's, Taco Bell, Wendy's and other quick-service chains.
What was Subway's famous 'Eat Fresh, Refresh' brand transformation?
Launched in July 2021, 'Eat Fresh, Refresh' was the largest menu overhaul in Subway history. It introduced upgraded deli meats, artisan breads, new sauces, digital mobile ordering upgrades, the chef-curated 'Subway Series' menu, and automated on-site deli slicers across 20,000+ North American stores.
How many Subway stores are there and why are they closing?
Subway ended 2025 with 18,773 U.S. restaurants after a net loss of 729, its 10th straight year of U.S. decline. It opened 499 U.S. units that year. Most closures happen when franchisees walk away as leases and agreements expire; the company calls it rightsizing an over-built network.
What are Subway's signature menu items and promotions?
Signature items include the Italian B.M.T., Tuna Sub, Meatball Marinara, Turkey Breast, the Subway Club, Footlong Cookies, Churros, and Soft Pretzels (the 'Sidekicks' snack menu), and the culturally well-known '$5 Footlong' promotion of the 2000s.
Is Subway profitable under Roark Capital?
Yes, on FDD figures. Net income rose from $15.4 million in 2023 to $397 million in 2024 and $689 million in 2025, helped by cost cuts, ending the development agent system and higher vendor rebates. The company also carries about $5.7 billion of buyout-related securitized debt.
Who owns Subway now?
In late 2023, after being family-owned for nearly 60 years, Subway was fully acquired by Roark Capital Group, a massive private equity firm that also owns Inspire Brands (Dunkin', Arby's).
Analysis: How Subway Makes Money
Deep dive into the Subway business model, revenue streams, and strategic moats in 2026.
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Financial data on this page is sourced from SEC EDGAR filings, official earnings releases, and verified press statements. Revenue figures are reviewed and updated periodically. Read our full data methodology ->
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