Subway shuts stores as MTF Subs seeks Chapter 11

A cluster of Subway restaurants owned by MTF Subs has closed after the franchisee filed for Chapter 11 in January, rejecting leases for six locations across Maine and Virginia. Court filings link the bankruptcy to merchant cash advances that became a cash drai

On Monday, several Subway restaurants were still listed on the chain’s store locator—only without operating hours. By this week, many of those same locations were marked “temporarily closed” on Google Maps, after MTF Subs, a major franchisee, filed for Chapter 11.

The closures are tied directly to a lease-rejection plan in bankruptcy court. Affiliates of MTF Subs, which together operate dozens of Subway restaurants across four states, have rejected the leases for six locations in Maine and Virginia, according to court records reviewed by Fast Company.

More closures could follow. MTF Subs has been evaluating the rest of its store footprint, and a bankruptcy judge recently gave the franchisee until August to decide whether it will reject additional store leases.

The six shuttered restaurants are in Boothbay, Portland, and Blue Hill in Maine, and in Williamsburg and Chincoteague in Virginia. The addresses were still visible on Subway’s store locator as of Monday:

989 Wiscasset Rd, ME-27, Boothbay, ME 04537
6 Allen Ave, Portland, ME 04103
16 South Street, Blue Hill, ME, 04614
5251 John Tyler Hwy., Williamsburg, VA 23185
1430 Richmond Rd., Williamsburg, VA 32185
6448 Maddox Blvd, Chincoteague, VA 23336

It was not immediately clear what will happen to the spaces. In an April court filing, MTF said it expected to save more than $10,000 a month on lease costs after closing those locations.

Fast Company reached out to Subway, MTF Subs, and its legal counsel for comment.

The bankruptcy case itself was filed in the Eastern District of Pennsylvania. Joint bankruptcy cases were opened for limited liability companies MTF Enterprises and MTF Holdings, listed as lead debtors.

MTF Subs first sought Chapter 11 protection in January. citing financial problems tied to merchant cash advances that proved difficult to repay. In bankruptcy filings. MTF Subs has described merchant cash advances as cash injections that provide money up front and require repayment through a percentage of future sales. MTF said the daily and weekly draws from those advances became a “cash drain” on the business.

In court documents, one lender later sought collection of hundreds of thousands of dollars directly from payments services providers, including Stripe, American Express, and Square.

MTF Subs is not a newcomer to the Subway system. The franchisee has been in the Subway franchise business since 2017. and its founder. Michael Fay. worked as a “sandwich artist” at the fast-food chain in high school. Fay said he loved the food so much that he purchased his own location in Pennsylvania. later building a network of Subway restaurants across Pennsylvania. Maine. Virginia. and New Hampshire.

Three months after its bankruptcy petition, MTF told the court it had identified Subway locations whose lease costs could not justify continued operations. It said it notified landlords of its intention to reject those leases and promised to vacate the stores by April 30.

The timing matters for workers and communities that depend on these neighborhood restaurants, but it remains unclear how many jobs were impacted by the closures or whether other locations are also expected to close.

MTF initially had until May 21 to decide which leases it would reject as part of its restructuring. It later asked the bankruptcy court for more time and was granted an extension until August 19. The company told the court it was still evaluating its footprint.

The shake-up lands in a broader moment for Subway itself. Subway is the largest fast food chain in the United States by number of locations. but its national footprint has been declining rapidly. As reported by Restaurant Dive. which cited Subway’s franchise disclosure document. Subway saw a net decline of 729 stores last year. bringing its total U.S. unit count to 18,773.

Subway was acquired in 2024 by private equity firm Roark Capital. which owns or backs restaurant brands including Dave’s Hot Chicken. the parent company of Arby’s and Dunkin’. and the parent company of Hardee’s and Carl’s Jr. At the time of the acquisition. Subway said it had “three exceptional years” of sales growth and claimed its global store count was growing for the first time since 2016.

Subway says it has more than 35,000 locations around the world, though as a privately held company it does not regularly report financial results.

Closures tied to high-cost financing are not limited to Subway. Last year. the owner of 22 Del Taco restaurants cited 10 separate merchant cash advances—amounting to more than $2.7 million—as one of the reasons for its Chapter 11 filing. according to Restaurant Business. Various other large fast food franchisees have also sought Chapter 11 protection this year. including the owners of Popeyes Louisiana Kitchen. Carl’s Jr. and Applebee’s restaurants.

Restaurant owners commonly point to declining foot traffic and higher operating costs as factors behind financial distress.

For now, the six locations identified by MTF Subs are already closed or in the process of going dark, even as the wider store portfolio remains under review. This story is developing and may be updated…

Subway MTF Subs Chapter 11 bankruptcy lease rejections merchant cash advances Stripe American Express Square franchisee closures Roark Capital