A second Subway Sandwich Shop franchisee with multiple stores has filed for bankruptcy in as many months. This time, the Subway franchisee is a multi-store operator in North Dakota. Here’s what you need to know about the bankruptcy and its impact on Subway stores.
What’s happened?
According to papers submitted to the United States Bankruptcy Court for the District of North Dakota dated July 21, a Subway franchisee by the name of Cherry Butte Company has filed for Chapter 11 bankruptcy protection.
The bankruptcy filing follows just over a month after another Subway franchisee, MTF Subs, filed for bankruptcy. MTF Subs operated 43 Subway stores.
According to Cherry Butte Company’s bankruptcy filing, the company has total assets worth about $19,000 while its total debt liabilities equal around $1.8 million.
The record shows that a number of the company’s creditors have placed liens on the company’s credit card and DoorDash receipts, meaning the income Cherry Butte Company’s Subway stores take in is not distributed to the company, but instead to its creditors who hold the liens. This effectively shuts off Cherry Butte Company’s cash flow.
While the filing doesn’t say precisely why Cherry Butte Company’s Subway store revenues have been falling, the filing does show that they have.
In calendar year 2024, the company’s stores took in $2.67 million in gross revenue. But in 2025, that gross revenue declined to $2.34 million. For its current 2026 year, the court filing shows that the company’s stores have a total gross revenue of $1.15 million, as of the date of the filing.
Where are the franchisee’s stores located?
Records show that Cherry Butte Company operates three Subway stores, all located in Dickinson, North Dakota. Those locations are:
- 455 12th Street W., Dickinson, North Dakota 58601
- 401 West Villard, Suite 106, Dickinson, North Dakota 58601
- 2456 3rd West, Dickinson, North Dakota 58601
Will the Subway stores be closing?
As of now, the court documents viewed by Fast Company do not suggest Cherry Butte Company will be closing its franchised Subway locations. Indeed, Chapter 11 bankruptcy is usually undertaken by companies that hope to reorganize and continue operating.
Currently, Subway’s store locator tool shows the three stores listed with their usual operating hours.
Why are so many fast food franchisees filing for bankruptcy?
In recent months, it’s not just Cherry Butte Company and MTF Subs that have filed for bankruptcy. And it’s not just Subway franchisees either.
In 2026 alone, franchisees operating Popeyes Louisiana Kitchen, Carl’s Jr., and Applebee’s have all filed for bankruptcy.
While the exact reasons behind each bankruptcy will be unique to that company, in general, fast-food and casual-food chains have been struggling in recent years with inflationary pressure, falling foot traffic, and consumers cutting back on discretionary spending as prices continue to rise.
What does this mean for Subway?
As for what these franchisee bankruptcies mean for Subway, that’s hard to say. The sub sandwich company was taken private by Roark Capital Group in 2024 and no longer publicly reports its financials on any regular basis.
However, it’s likely that most fast-food chains, Subway included, are facing the same economic pressures nearly all fast-food chains have faced in recent years: inflation, falling foot traffic, and more discretionary diners.
Subway says it currently has more than 35,000 independently owned and operated stores around the world.
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