Subway has terminated its master franchise agreement with SouthRock Capital, the company that operated Subway and Starbucks in Brazil. The move comes after SouthRock filed for bankruptcy, with debts estimated to be $370 million U.S.
SouthRock’s bankruptcy filing comes less than a year after it acquired the Subway master franchise in Brazil. The company also lost its license to operate Starbucks in Brazil last month.
Subway’s decision to terminate its agreement with SouthRock is a sign of the challenges facing the fast-food chain in Brazil. The country’s economy has been struggling in recent years, and Subway has been facing increased competition from local fast-food chains.
It is unclear what the future holds for Subway in Brazil. The company could sell the master franchise to a new operator, or it could try to operate the restaurants itself. However, the bankruptcy of SouthRock is a major setback for Subway, and it could take some time for the company to recover.
What does this mean for Subway customers in Brazil?
In the short term, Subway customers in Brazil may experience some disruption in service. Some restaurants may close temporarily, and others may have reduced hours. However, Subway has said that it is committed to continuing to operate in Brazil, and it is working to find a new master franchisee.
What does this mean for Subway franchisees in Brazil?
Subway franchisees in Brazil are likely to be concerned about the future of their businesses. The bankruptcy of SouthRock could lead to a decrease in brand recognition and support, which could hurt sales. However, Subway has said that it is committed to supporting its franchisees, and it is working to find a new master franchisee that will provide the necessary support.
