MIAMI — Already one of the largest restaurant brands in the world, Subway is seeking to expand its footprint even further with plans for a significant expansion in China. The quick-service restaurant chain said it has signed the largest master franchise agreement in its history and one of the largest in the entire QSR industry with Shanghai Fu-Rui-Shi Corporate Development Co., Ltd. (FRS).
Under terms of the agreement, FRS will open approximately 4,000 Subway restaurants in China over the next 20 years, a move that will expand Subway’s current footprint in the market by more than seven times. Additionally, FRS will acquire the exclusive rights to manage and develop all Subway locations in China.
The agreement is being funded by a consortium of private investors, including Asia Investment Capital (AIC). Subway said the group will name a chief executive officer with significant QSR experience in the Chinese market to lead the expansion effort.
“This agreement is a significant milestone in Subway’s international growth strategy as we continue to focus on strategically expanding our footprint and maintaining our position as one of the world’s largest restaurant brands,” said John Chidsey, global CEO of Subway. “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 said it has seen positive sales momentum across China since emerging from the COVID-19 pandemic. That momentum has been driven by a strong digital strategy and the introduction of new menu items. The QSR chain is seeking to double its current network of restaurants in the Asia Pacific region from approximately 3,500 restaurants to more than 6,000 restaurants over the next five years.
The announcement comes less than two months after Subway reached five new multi-unit owner agreements to accelerate its growth strategy in North America. As part of the agreements, Subway has consolidated and transferred more than 230 existing restaurants in 2023 across Texas, Florida, Arizona and the mid-Atlantic. The initiative also includes commitments to remodel restaurants and strategically open new restaurants in the future.
The multi-owner agreements come as Doctor’s Associates, Inc., the owner of the Milford, Conn.-based QSR chain, is conducting a “sales exploration process” for Subway.
Globally, Subway operates approximately 37,000 restaurants in over 100 countries. In North America, its largest market, the company has approximately 20,000 restaurants.