Subway is pressuring some franchisees to spend up to $100,000 on remodeling their stores and is threatening to terminate their contracts if they fail to do so, according to sources. The move comes as the struggling fast-food giant attempts to sell itself, facing difficulties in attracting larger franchisees and buyers who are wary of bearing the costs of a revamp of the chain’s increasingly outdated store fleet. The smaller franchisees facing the demands for renovation have voiced their frustration, with one accusing Subway of pushing its own financing plans at an interest rate as high as 14%. The company has confirmed its requirement for renovations every seven years, having extended the deadlines during the pandemic. However, the pressure is likely to hit smaller franchisees who may not have the required funds, and sources suggest that up to half of Subway’s US locations make little or no profit. The company, which owns none of its locations, is dependent on its franchisees to operate its restaurants.
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