Beloved Sandwich Chain Rocked by Franchise Bankruptcy Filing After Closing 600 Stores

28.06.2025 05:43

Subway, once hailed as America’s most beloved sandwich chain, is reeling from another blow. A major franchisee has filed for bankruptcy, highlighting the mounting pressure facing fast food in today’s economy.

The Street reported that CGA Corporation, a Montebello, CA-based Subway operator, filed for Chapter 11 bankruptcy on June 25. It listed up to $100,000 in assets and as much as $500,000 in liabilities.

While the company didn’t explain the filing, the bigger picture tells the story: the fast-food industry is being squeezed from all sides.

Subway has shuttered over 600 locations in the past year alone, struggling to keep pace in a crowded and competitive market. Once the largest fast-food chain in the world by number of outlets, Subway is now watching rivals like Jersey Mike’s and Jimmy John’s chip away at its market share.

Rising ingredient costs and slowing foot traffic are compounding the problem. Inflation has driven many consumers to eat at home, and fast-food giants from McDonald’s to Burger King are slashing prices just to stay in the game. Even McDonald’s iconic Big Mac meal has doubled in price since 2014.

Then there’s the brand trust issue. Subway has weathered years of scrutiny from questions about the authenticity of its tuna to claims that its bread didn’t legally qualify as bread. While the chain has repeatedly defended its products, the headlines haven’t helped.

The CGA bankruptcy underscores just how fragile the current fast-food landscape is. Local operators are bearing the brunt of rising costs and shrinking margins. If one of the most recognized names in fast food is struggling to keep its franchisees afloat, the rest of the industry may not be far behind.

As Subway fights to reinvent itself, the bigger question remains: can a once-beloved sandwich empire adapt fast enough to survive this shakeup?