A Subway franchisee that operates 48 restaurants has filed for Chapter 11 bankruptcy protection, putting the locations at risk of closing.
Texas-based River Subs lost a $3 million wrongful death lawsuit last year after one of its restaurant managers was shot and killed by her ex-boyfriend outside a San Antonio subway.
The company did not give a reason for the bankruptcy filing, but it came just eight days after it lost an appeal against the decision.
Marisela Cadena, 43, apparently received a request to deny transfer to another location three days before she was killed by Andrew Munoz in 2020. Restaurant business reported. He later committed suicide.
Her family filed a lawsuit in a Texas court in 2021, alleging that River Subs failed to provide her with a safe place to work despite knowing of a significant risk of violence against her.
Marisela Cadena, 43, apparently received a request to deny transfer to another 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, “Although Munoz, the assailant, shares the overwhelming percentage of responsibility for Cadena’s death, but for the defendant’s negligent acts and omissions, Cadena would not have been killed.”
River Subs appealed the decision, but lost the appeal earlier this month.
According to court documents, the company listed both assets and liabilities between $1 million and $10 million, and the bankruptcy filing was intended to reorganize the company.
The franchise was founded in 1991 by Martha Jordan, Cathy Amato and Rick Riley. While Riley retired in 2021, Jordan and Amato continue to run the company.
According to court documents, River Subs peaked in 2012 with a total of 69 restaurants in Texas.
But it has since 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 people.
Amato and Jordan have served on several Subway franchisee associations and billboards, and the company said in court documents that it has “continually hired a majority of minority and low-income team members and developed them into future leaders for Subway.” ‘
Subway itself has been struggling with store closures for nearly a decade, due to weak unit sales and high operating costs.
The sandwich giant has closed about 7,000 restaurants in the US since 2015.
It comes amid a slew of restaurant and fast food closures across the country — and especially 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 that operates 48 restaurants has filed for bankruptcy protection (Photo: The San Antonio location where Marisela Cadena was killed)
Subway has struggled with store closures for nearly a decade, due to weak unit sales and high operating costs
Nearly 10,000 jobs at chains from Pizza Hut to Burger King have been eliminated since the law took effect April 1, according to a report from a state trade group.
In addition, chains have closed restaurants, including beloved Mexican chain Rubio’s Coastal Grill, which filed for Chapter 11 bankruptcy earlier this month and closed 48 locations across the state.
The California Business and Industrial Alliance (CABIA) blasted Newsom for pushing through the law, which also meant businesses in the state would have to raise prices.
That’s 25 percent more than California’s standard minimum wage of $16 an hour, which itself took effect in January.