The bankruptcy is viewed as a tactical move to restructure and recover from the current setbacks. Credit: Melinda Gimpel on Unsplash

River Sub, a Texas-based 48-unit Subway franchisee, has filed for bankruptcy after losing a legal battle and facing the fallout of the Covid-19 pandemic.

The franchisee’s financial disclosures indicate assets and liabilities ranging between $1m and $10m.

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The bankruptcy declaration occurred just over a week after River Sub’s appeal was rejected in a death lawsuit. The case involved Marisela Cadena, a former manager who was fatally shot by her ex-boyfriend at a Subway outlet in February 2020.

River Sub has been ordered to pay $2.97m in connection with Cadena’s death, with her family alleging that the company failed to allow her to transfer to another store for protection, or to enhance security measures.

Founded in 1991 by Martha Jordan, Cathy Amato and Rick Riley, River Sub aimed to operate Subway restaurants in demographically varied markets in and around San Antonio. Riley later stepped down from the business.

At its zenith in 2012, the company owned 69 restaurants.

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The pandemic severely impacted River Sub’s operations, with sales plummeting 80% at its peak. In 2023, gross sales were just shy of $30m. The brand currently has 454 employees, 173 in full-time positions and 281 part-time.

Despite the need to close some stores, River Sub remains the largest Subway multi-unit franchise group in south central Texas.

The bankruptcy is viewed as a tactical move to restructure and recover from the current setbacks.

Amato, reflecting on the company’s strategy, stated: “The company’s strategy was to open Subway restaurants in a variety of markets, including markets deemed demographically undesirable by other quick-service restaurant operators. We hired local team members in those neighbourhoods and helped boost the local economy.”