A 48-unit Subway franchisee declared bankruptcy on June 20 after facing significant challenges due to market saturation, battling the lingering effects of the COVID-19 pandemic, and going through a wrongful death lawsuit.
Franchisee River Sub listed between $1 million and $10 million in assets and liabilities.
The bankruptcy filing comes eight days after the group’s appeal was denied in a wrongful death lawsuit involving a former manager. River Sub is responsible for $2.97 million in connection to the death of Marisela Cadena, who was shot and killed at a Subway restaurant by her ex-boyfriend in February 2020, according to the San Antonio Express-News. The family filed a lawsuit in 2021, claiming River Sub didn’t allow Cadena to transfer stores or upgrade security.
River Sub was founded in 1991 by Martha Jordan, Cathy Amato, and Rick Riley with a vision to operate Subway restaurants in demographically diverse markets within San Antonio and surrounding areas. Riley retired from the business three years ago.
“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,” Amato said in the court filing. “We hired local team members in those neighborhoods and helped boost the local economy.”
At its peak in 2012, River Sub owned 69 restaurants.
The pandemic significantly affected the operator’s sales, with an 80 percent reduction at the height of the COVID crisis. Despite these financial setbacks, the company prioritized the well-being of its employees, striving to keep them employed and holding positions for those who promised to return post-lockdown. Gross sales in 2023 were slightly less than $30 million. The company currently employs 454 employees—173 full-time and 281 part-time.
The company prides itself on offering fair work schedules, flexible time off, and paid vacation for tenured employees. Additionally, River Sub has provided a comprehensive healthcare plan since 2000, well before it became a mandate, and continuously seeks ways to reduce out-of-pocket costs for its team members. This approach has resulted in favorable employee retention rates, with over 35 percent of workers having been with the company for five years or more, and many reaching ten or 20 years of service. Ninety percent of management began as hourly workers.
The bankruptcy filing is seen as a strategic move to reorganize and emerge stronger. Despite store closures, it is still the largest Subway multi-unit franchise group in South Central Texas. In court documents, Amato described River Sub as a regional leader in restaurant metrics and stated that its stores are used to train other franchisees in the U.S. She and Jordan serve or have served on Subway franchisee associations, advertising boards, and other committees.
River Sub joins several entities that have declared bankruptcy thus far in 2024, including Red Lobster, Rubio’s Coastal Grill, Tijuana Flats, Sticky Fingers, Oberweis Dairy, and Foxtrot and Dom’s Kitchen. Corner Bakery Café filed for bankruptcy in 2023, along with major franchisees from Burger King, Wendy’s, CKE, Popeyes, Denny’s, and McDonald’s.
