The Subway sandwich franchise in Brazil has filed for a form of bankruptcy or judicial reorganization. In a recent court filing, the owner of the chain, SouthRock Capital, requested recuperação judicial, which allows financially distressed companies to restructure their debts with creditors. It’s similar to filing for Chapter 11 bankruptcy in the US.

Subway isn’t the only US franchise that SouthRock operates in Brazil. And it’s not the first time the private equity group has requested recuperação judicial. In 2023, SouthRock also filed for recuperação judicial with respect to its T.G.I. Friday’s and Starbucks franchises. In the Subway filing, SouthRock declared BRL$482 million (almost US$100 million) in debt.

In May 2022, Subway announced it had signed a master franchise agreement with SouthRock to operate its more than 1,600 restaurant locations throughout Brazil. At the time, it was touted as Subway’s first master franchise agreement in Latin America.

For the global Subway franchise, the last few years have been quite the ride. From lawsuits about whether their footlong subs were really 12 inches to claims that their tuna wasn’t really tuna, Subway has routinely been at the center of litigation. Recent marketing campaigns, however, have attempted to change its troubled image by debuting new bread recipes as well as freshly sliced deli meats.

Globally, Subway has some 37,000 restaurants in more than 100 countries. It’s a recognized brand, just like McDonald’s and Pizza Hut. But it’s not without its challenges. Doing business in Brazil, for any business, is marred with challenges.