48 Subway restaurants are at risk as franchisee files for bankruptcy - after grim incident at one location
- The ruling comes after the company lost a $3 million wrongful death lawsuit
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A Subway franchisee which operates 48 restaurants has filed for Chapter 11 bankruptcy protection, putting the locations at risk of closure.
Texas-based River Subs last year lost a $3 million wrongful death lawsuit after one of its restaurant managers was shot and killed by her ex-boyfriend outside a Subway in San Antonio.
The company did not give a reason for the bankruptcy filing but it came just eight days after it lost an appeal of the decision.
Marisela Cadena, 43, was apparently denied a request to transfer to a different location three days before she was murdered by Andrew Munoz in 2020, Restaurant Business reported. He later killed himself.
Her family filed a lawsuit in a Texas court in 2021, which claimed that River Subs failed to provide her with a safe place to work despite knowledge of a substantial risk of violence against her.
Marisela Cadena, 43, was apparently denied a request to transfer to a different location three days before she was murdered by Andrew Munoz in 2020
An arbitrator ruled in favor of the family in April last year.
Arbitrator Carlos Cortez said: 'While Munoz, the assailant, shares the overwhelming percentage of responsibility for Cadena's death, but for respondent's negligent acts and omissions, Cadena would not have been murdered.'
River Subs appealed the decision, but lost its appeal earlier this month.
According to court documents the company listed both assets and liabilities at between $1 million and $10 million, and the bankruptcy filing is designed to reorganize the business.
The franchise was founded in 1991 by Martha Jordan, Cathy Amato and Rick Riley. While Riley retired in 2021, Jordan and Amato continue to operate the business.
In 2012, River Subs peaked with a total of 69 restaurants in Texas, according to court documents.
But since then it has closed 21 of these locations due to the Covid-19 pandemic and 'restaurant saturation.'
The company generated less than $30 million in sales last year and employs 454 workers.
Amato and Jordan have served on various Subway franchisee associations and advertising boards, and the company said in court documents it 'has continuously employed a majority of minority and low-income team members and developed them into future leaders for Subway.'
Subway itself has struggled with store closures for almost a decade, amid weak per-unit sales and high running costs.
The sandwich giant has closed around 7,000 restaurants across the US since 2015.
It comes amid a slew of restaurant and fast food closures across the country - and particularly in California.
Earlier this year, Governor Gavin Newsom introduced a $20-an-hour minimum wage for fast food workers in the Golden State.
A Subway franchisee which operates 48 restaurants has filed for Chapter 11 bankruptcy protection (Picture: The San Antonio location where Marisela Cadena was murdered)
Subway has struggled with store closures for almost a decade, amid weak per-unit sales and high running costs
Almost 10,000 positions across chains from Pizza Hut to Burger King have been cut since the law came into effect on April 1, according to a report from a trade group in the state.
On top of that, chains have been shuttering restaurants - including beloved Mexican chain Rubio's Coastal Grill, which earlier this month filed for Chapter 11 bankruptcy and closed 48 locations in the state.
The California Business and Industrial Alliance (CABIA) slammed Newsom for pushing the law through, which has also meant businesses in the state have had to raise prices.
That is 25 percent more than the standard minimum wage of $16-an-hour in California, which itself came into effect in January.
