Who Really Owns Subway? An In-Depth Look at the World‘s Largest Restaurant Chain
With over 40,000 locations spanning 100+ countries, Subway has staked its claim as the world‘s largest restaurant chain. Subway‘s global empire serving fresh, customizable submarine sandwiches traces back to humble beginnings in 1965. So who owns and controls this mega brand today?
Unlike publicly traded fast food giants such as McDonald‘s and Restaurant Brands International, Subway is fully owned by the private company Doctor‘s Associates Inc. (DAI). This low-profile company holds the keys to Subway‘s future, for better or worse.
Doctor‘s Associates: The Tight-Knit Company Behind the Scenes
DAI was founded in 1965 by Fred DeLuca and Dr. Peter Buck, who together opened the first Subway restaurant in Connecticut the following year. While each Subway location is independently owned and operated by franchisees, DAI owns the intellectual property and collects 8% of sales as a royalty fee from each franchise.
The heirs of DeLuca and Buck have equal 50/50 ownership stakes in DAI following DeLuca‘s death in 2015. DAI is extremely private about its finances and management. According to Forbes, the company generated $18.2 billion in sales in 2019 across its network of franchisees.
As a private company, DAI faces less pressure from shareholders to boost short-term performance. This allows the owners to focus on long-term brand building. However, being private also means less accountability and oversight on company leadership.
By The Numbers: How Subway Stacks Up to the Competition
| Company | Global Locations | 2021 Sales | Recent Growth Trajectory |
|---|---|---|---|
| Subway | 40,000+ | $7.8 billion (U.S.) | Declining sales since 2015 peak |
| McDonald‘s | 40,000+ | $23 billion (U.S.) | Steady growth past 5 years |
| Starbucks | 34,000+ | $29 billion (U.S.) | Consistent growth engine |
Despite having the most global stores, Subway lags behind the sales of chains like McDonald‘s and Starbucks. And while competitors are growing, Subway has seen falling sales and negative media attention in recent years.
The Pros and Cons of Subway‘s Private Ownership
Pros
- Owners can focus long-term without shareholder pressure
- With no advertising costs, profit margins are likely higher
- Consumers may perceive a more authentic brand story
Cons
- Lacks oversight and accountability of public company
- Less transparency around company direction and stability
- Harder for brand to pivot quickly to address challenges
Subway‘s private ownership structure certainly has tradeoffs. The benefits of public ownership – accountability, access to capital, adaptability – could help address Subway‘s recent stagnation.
Subway‘s Roadblocks – And Potential Paths Forward
Subway faces a perfect storm of challenges:
- Rising competition in the sandwich/fast-casual category
- Negative PR from former spokesperson Jared Fogle scandal
- Perception that menu is stale compared to innovating rivals
- Consumers shifting away from inexpensive carbo-heavy meals
But with strong leadership from Doctor‘s Associates, Subway could reenergize through:
- Menu innovation – more premium and healthy options
- Store redesigns – create modern, inviting atmosphere
- Targeted marketing – spotlight fresh ingredients/customization
- International expansion – grow in developing markets
- Delivery partnerships – adapt to off-premise dining boom
The owners of DAI hold immense responsibility overseeing and steering the Subway brand going forward. While Subway defined fast-casual decades ago, it must keep evolving to maintain relevance with consumers and franchisees alike.
Conclusion: The Family-Owned Company Plotting Subway‘s Course
Subway sits at a crossroads in 2024. With sales declining over the past decade, Subway needs a new roadmap to get back on a growth trajectory. The choices made by Doctor‘s Associates Inc. – fully owned by the heirs of founders Fred DeLuca and Peter Buck – will determine whether Subway returns to expansion or continues stagnating.
While Subway‘s privacy has benefits, greater transparency could help amid recent challenges. Regardless, DAI has the operational and financial data needed to course correct if desired. Though with power comes responsibility. For Subway to maintain its standing as the world‘s largest restaurant chain, Doctor‘s Associates must take decisive action to show franchisees and customers there‘s reason to continue believing in the Subway brand.
