Does Walmart Own Subway? Separating Fact from Food Court Fiction

No, Walmart does not own Subway. Let’s put that rumor to rest right now. While you might be grabbing a footlong next to the grocery aisles, Subway is a privately held company and operates its locations within Walmart stores (and elsewhere) through a leasing agreement. They’re tenants, not acquisitions.

Understanding the Relationship: Walmart and Subway

The confusion surrounding the ownership of Subway by Walmart likely stems from the sheer ubiquity of Subway restaurants within Walmart stores. It’s a convenient pairing, offering shoppers a quick and affordable meal while they tackle their errands. This strategic alliance benefits both parties, but it doesn’t translate to ownership.

The Tenant-Landlord Dynamic

Think of it like this: Walmart is the landlord, and Subway is the tenant. Walmart provides the space, the foot traffic, and the infrastructure. Subway, in turn, pays rent and provides a food service option for Walmart customers. This arrangement is mutually beneficial. Walmart benefits from the increased customer satisfaction and retention, while Subway gains access to a pre-existing customer base.

The Rise of Retail Partnerships

The partnership between Walmart and Subway is a prime example of a broader trend in retail. Large retailers often lease space to various businesses, creating a one-stop-shop experience for consumers. This is why you might find nail salons, banks, or even mobile phone stores within a larger retail outlet. It’s about enhancing convenience and attracting a wider range of customers.

Subway’s Independent Status

Subway remains firmly under the control of its shareholders. It’s a private company, meaning its stock isn’t traded on public exchanges. This allows Subway to maintain its independence and make strategic decisions without the pressure of Wall Street.

Frequently Asked Questions (FAQs) about Walmart and Subway

Here are some frequently asked questions to further clarify the relationship between Walmart and Subway:

1. Why are there so many Subways in Walmart stores?

The answer is simple: convenience and mutually beneficial business. Walmart attracts a large volume of shoppers, and Subway provides a readily available food option. This partnership increases foot traffic for Subway and provides Walmart customers with added convenience.

2. Who actually owns Subway?

Subway is a privately held company. Until recently, it was owned by the founders Fred DeLuca and Peter Buck. However, in August 2023, it was acquired by Roark Capital Group, a private equity firm.

3. Does Walmart have any ownership stake in other fast-food chains?

While Walmart doesn’t own Subway, they similarly lease space to many other franchises, but no, Walmart doesn’t own any fast-food chains. You might find McDonald’s, Taco Bell, or other familiar brands in Walmart stores, but these are independent businesses leasing space.

4. Are Subway employees considered Walmart employees?

No, Subway employees are employed by Subway franchises, not Walmart. They follow Subway’s policies and procedures, even when working within a Walmart store. Their payroll and HR functions are separate from Walmart’s.

5. Can I use my Walmart gift card at Subway inside Walmart?

Generally, no. Walmart gift cards are typically only redeemable for purchases made directly from Walmart. Because Subway is a separate entity, their point-of-sale system won’t accept Walmart gift cards.

6. Does Walmart get a percentage of Subway’s sales inside their stores?

Typically, yes, but indirectly. Instead of directly taking a percentage, Walmart benefits from the rental income generated by leasing space to Subway. The terms of the lease agreement, including rent and any potential percentage of sales considerations, are confidential business agreements between the two companies.

7. Is Subway the only fast-food restaurant allowed inside Walmart?

No. While Subway is a common sight in Walmart stores, other fast-food chains can and do operate within Walmart locations. The specific choices vary depending on location and regional preferences.

8. How does Subway decide to open a location inside a Walmart store?

Subway franchisees, or Subway corporate, will evaluate the foot traffic, demographics, and overall business potential of a particular Walmart location. They’ll then negotiate a lease agreement with Walmart. This decision is based on market research and profitability projections.

9. Is the menu at Subway inside Walmart the same as a standalone Subway?

Generally, yes. The menu at a Subway inside Walmart is usually very similar, if not identical, to the menu at a standalone Subway restaurant. However, there might be slight variations based on local demand or logistical constraints.

10. Has Walmart ever considered buying Subway?

While there’s no publicly available information confirming Walmart’s explicit interest in acquiring Subway, one can assume it is a complex matter. Given Subway’s recent acquisition by Roark Capital, and Walmart’s current focus, any such move is unlikely in the foreseeable future.

11. What other types of businesses are commonly found inside Walmart stores?

Besides fast-food restaurants like Subway, Walmart stores frequently host a diverse range of businesses, including:

• Nail Salons: Providing beauty services to shoppers.
• Banks & Credit Unions: Offering financial services and convenience.
• Mobile Phone Stores: Selling phones, plans, and accessories.
• Eye Care Centers: Providing vision exams and selling eyewear.
• Hair Salons: Providing haircut and styling services.

12. Are there any disadvantages for Subway to be located inside a Walmart?

While the partnership is largely beneficial, there can be some challenges for Subway franchisees operating within Walmart. Potential disadvantages include:

• Reliance on Walmart’s foot traffic: Subway’s success is tied to Walmart’s ability to attract customers.
• Potential for limited operating hours: Subway’s hours may be restricted by Walmart’s store hours.
• Rent costs: Rent for locations within a high-traffic store can be more expensive than stand-alone locations.
• Competition with other in-store food options: Customers may choose to purchase food from other areas of Walmart, like the deli or bakery.

In conclusion, while Subway and Walmart enjoy a strong and symbiotic relationship, Walmart does not own Subway. They operate as independent entities, with Subway leasing space within Walmart stores. The success of this partnership is a testament to the power of convenience and the strategic alignment of two distinct businesses.