Why Subway has closed more than 900 stores this year

The sandwich chain's U.S. store count dropped by 909 locations in 2017, according to figures that a Subway representative provided to Business Insider. That represents more than 3% of the chain's 2016 U.S. stores.

The chain currently has 25,835 shops open and operating in the U.S., according to the representative, compared to 26,744 at the end of 2016.

In 2016, sales at the chain reportedly fell 1.7% and its store count dropped by 359 locations in the U.S. — marking the first time in the company's history that the chain closed more stores than it opened.

Globally, Subway's store count is down 471 locations. The chain has 44,014 shops around the world, down from its 44,485 stores in 2016.

The 909 shuttered U.S. locations this year could just be the tip of the iceberg for Subway closures.

Last week, news broke that franchisees were protesting the chain's plan to bring back the $5 footlong deal. On Monday, Subway's head of North American marketing, Karlin Linhardt, resigned from the company. And, traffic has fallen 25% over the last five years, according to an internal memo reviewed by The New York Post.

"The national promotional focus over the past five years … has decimated [us] and left many franchisees unprofitable and even insolvent," petitioners led by Virginia franchisee Mitesh Raval complained in a letter that was sent to Subway and obtained by The Post.

More than 400 franchisees have reportedly signed the petition, which protests the chain's plans to roll out its famous $5 footlong deal in January.

Subway has struggled to keep up with fast-casual competitors like Panera and Sweetgreen that many see as better suited to meet Americans' swiftly evolving health trends.

"Today, people are ever more educated on nutrition, food sourcing, and ethical holistic business models," Sara Bamossy, the chief strategy officer at ad agency Pitch, told Business Insider. "To create (or to rekindle) loyalty and sales, it is not enough to label something as 'natural' and it’s not enough to be affordably priced."

The company also faced negative publicity from a scandal involving its former spokesperson Jared Fogle. Fogle is currently serving a nearly 16-year prison sentence after being charged for having sex with minors and possessing child pornography. Subway cut ties with him in 2015.

"Subway is in the midst of a massive transformation, and change of this size takes time," a representative for the company said in a statement to Business Insider last week. "Our goal is to strengthen the Subway brand in every market around the world to give Subway franchisees the greatest opportunity to successfully grow their businesses."

The chain is rolling out a new store design, remodeling locations across the U.S. Subway is also trying to catch up with competitors like Starbucks with an upcoming, digitally focused loyalty program.

Related gallery: The biggest changes to the fast food industry in 2017 (provided by GoBankingRates)

a hand holding a sandwich: <p>Recent years haven't been easy in the quick-service restaurant segment, which includes traditional fast-food brands and newer, trendier fast-casual operators. Speaking to the National Restaurant Association in May 2017, restaurant trends analyst Nancy Kruse identified the move to fresher, healthier foods as "the No. 1, single biggest trend of the past decade." </p><p>Surprisingly, while that sounds like a solid win for kale and quinoa, fast food is flourishing. The quick-service industry started 2017 at an estimated $234 billion in revenues, accounting for a substantial portion of the $799 billion in overall food service sales for 2017, the National Restaurant Association projects. That's not likely to change soon, with consumers spending more on eating out than at home, so the real question is which restaurant brands can successfully capitalize on the new breed of diners?</p><p>Here's a snapshot of some of the biggest changes in the fast food industry over the past year, from mergers and acquisitions to <a href="https://www.gobankingrates.com/saving-money/best-dollar-menus-america/">revamped dollar menus</a>.</p>

The biggest changes to the fast food industry in 2017

Why Subway has closed more than 900 stores this year

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