Second Subway Franchisee Files for Bankruptcy in Two Months
A Subway franchisee operating three stores in North Dakota has filed for Chapter 11 bankruptcy protection. This follows approximately one month after another multi-store Subway franchisee, MTF Subs, filed for bankruptcy.
Cherry Butte Company, a Subway franchisee operating three restaurants in Dickinson, North Dakota, has filed for Chapter 11 bankruptcy protection. The filing with the United States Bankruptcy Court for the District of North Dakota was made on July 21. The company reported assets of approximately $19,000 against total debt liabilities of around $1.8 million.
The filing comes just over a month after MTF Subs, another franchisee with multiple Subway locations, filed for bankruptcy in February. Cherry Butte Company's filing indicates that creditors have placed liens on the company's credit card and DoorDash receipts. This arrangement directs incoming revenue directly to creditors, effectively halting the company's cash flow.
Records show a decline in revenue for Cherry Butte Company's stores. Gross revenue for the calendar year 2024 was $2.67 million, decreasing to $2.34 million in 2025. For the current 2026 year, gross revenue stood at $1.15 million as of the filing date. While the filing does not specify the precise reasons for the revenue drop, it reflects broader challenges in the quick-service restaurant industry.
Chapter 11 bankruptcy typically allows companies to reorganize and continue operations. The three Subway locations operated by Cherry Butte Company are currently listed as open. The fast-food industry broadly faces economic pressures including inflation, reduced foot traffic, and consumers cutting back on discretionary spending. Franchisees for other brands, such as Popeyes, Carl's Jr., and Applebee's, have also filed for bankruptcy this year.