This month, Da Dong's famously crispy "Su Bu Ni" roast duck found its way into a Subway sandwich. At the upscale restaurant that originated this dish, where a meal costs hundreds of yuan per person, it's a signature offering; at Subway, the same experience is available for just over 30 yuan. This unlikely pairing brings together a Michelin-level Chinese fine dining establishment and a Western fast-food chain that, after 30 years in China, had been jokingly referred to as "white-person food."

Just three years ago, this collaboration would have been almost unimaginable. In mid-2023, Subway China was a textbook case of failure: it entered the Chinese market in 1995, yet after 28 years, its total store count was only around 500 — a stark contrast to KFC China's 10,000-plus outlets and McDonald's China's nearly 6,000. Its brand image was equally passive, dismissed on social media as the epitome of "white-person food": cold, bland, and overpriced, with stores typically hidden in basement levels of shopping malls or tucked away in inconspicuous corners.

Reflecting on this period, Zhu Fuqiang, who later took over China operations, recalled at an industry event: "In the past, the common perception of Subway restaurants was that they were almost always hidden in mall corners."

What followed was a remarkably rapid turnaround. In 2024, Subway opened over 220 new stores in China, a record annual high since its entry. In 2025, that number surged past 300. On August 8, 2025, the 1,000th store opened on Huaihai Middle Road in Shanghai. By June 2026, the total store count surpassed 1,200. The number of new stores opened between the second half of 2023 and the end of 2025 alone exceeded the combined total from the previous 28 years.

How did a market that stagnated for three decades see such a dramatic shift in just three years?

Subway is one of the world's largest fast-food brands by store count, operating in over 100 countries with approximately 37,000 locations. Its expansion has historically relied on an ultra-light-asset franchise model: low entry barriers, rapid scaling, with headquarters avoiding rent and labor costs while generating revenue primarily from franchise fees and supply chain margins.

However, starting around 2015, this model began to show cracks globally — Subway closed roughly 8,000 stores in the United States, and its worldwide store count contracted from a peak of nearly 45,000 to about 37,000. If the model was waning even on a global scale, its problems in China were even more entrenched.

According to data published by the China Chain Store & Franchise Association in March 2023, as of January 31, 2023, Subway had 535 stores in China, of which 530 were franchised and only 5 were company-owned. Franchising itself isn't inherently flawed — McDonald's and KFC rely on it extensively — but Subway's issue was unique: it had franchising without control.

This lack of oversight permeated every aspect of the business. Location selection was driven solely by low rent, resulting in near-zero brand visibility. Quality control was inconsistent across service, ingredients, and food preparation. Most critically, stores cannibalized each other: overly dense store placement in the same areas split customer traffic and diluted per-store profits. As franchisee profitability suffered, they cut costs, leading to further declines in foot traffic — a vicious cycle.

At a deeper level, the problem was where decision-making authority resided. Product development was controlled by global headquarters, with a uniform global menu and new product launches requiring remote approval — meaning Chinese consumer preferences had to wait for a green light from Miami. This standardized menu clashed with Chinese dietary perceptions: cold sandwiches were viewed more as a "snack" than a "proper meal," which in China typically means hot, flavorful, and satisfying food.

The pricing strategy was equally awkward. At 30–40 yuan per person, consumers could get a full meal — burger, fries, and a drink — at McDonald's, but at Subway, the same amount only bought a single cold sandwich. The broader context amplified this disconnect. Around 2023, the Chinese dining industry entered a price war, with "9.9 yuan" becoming an unspoken benchmark for Western fast food. A cold-food brand with a 30-plus yuan average ticket price found itself directly in the crosshairs.

The "white-person food" label wasn't mere consumer bias; it was the inevitable outcome of a triple mismatch in product, price, and timing.

In June 2023, Subway's global headquarters signed a new master franchise agreement with Shanghai Furuish. This was the largest master franchise deal in Subway's history. Furuish secured exclusive rights to develop all Subway stores in mainland China and committed to opening nearly 4,000 locations within 20 years, expanding the Chinese market more than sevenfold. While brand ownership remained with global headquarters, Furuish took over operational control. A month earlier, Furuish had already become the sole shareholder of Subway's two management companies in China, with Zhu Fuqiang appointed as legal representative.

Zhu Fuqiang's resume underscores the significance of this takeover. He started at McDonald's in an entry-level position in 1992 and spent about 20 years within that system. When he joined Burger King China in 2012, it had only around 60 stores; his leadership drove expansion past 1,000 stores within six years and to over 1,300 in about seven. He served as Chief Operating Officer and Chief Development Officer from 2014, and was promoted to CEO of Burger King China in April 2020, becoming the brand's first local leader.

From McDonald's grassroots origins to leading China operations for three American fast-food brands, Zhu Fuqiang is a rare professional manager in China's restaurant chain sector with complete hands-on experience in both frontline operations and large-scale expansion. But Subway presented a steeper challenge than Burger King: brand awareness was nearly zero, the system was fragmented, and capabilities in direct operations, supply chain, and digital infrastructure were almost nonexistent — everything had to be built from scratch.

Zhu Fuqiang's first critical decision was shifting from "franchise-first" to "direct-operation-first." New company-owned stores prioritized ground-floor locations along main streets in core business districts, with standard stores ensuring 20–30 seats — a stark contrast to the old "hidden-in-the-corner" franchise outlets.

Direct operation means heavier capital investment: in early 2026, Furuish completed a capital increase, raising registered capital from $58 million to $93 million. But it also gave headquarters direct control over location, quality, service, and brand image — the only path to transforming a loose franchise coalition into a replicable chain model.

Early operating data preliminarily validates this approach: Zhu Fuqiang disclosed that Subway China's revenue maintained double-digit growth in both 2024 and 2025, with new stores achieving profitability within their first year.

After the operational handover, local research and development accelerated significantly. Chief Marketing Officer Wang Wei stated that everything — from formulations and ingredients to launch timelines — is now fully led by the Chinese team. Innovation came gradually. Early efforts focused on testing flavors: pork jowl and teriyaki beef sandwiches launched in winter 2023, abalone and shrimp sandwiches for Chinese New Year 2024, and the "237 Energy Bowl" in April 2025, extending into the health-food segment.

The turning point came in autumn 2025 when Subway collaborated with Michelin-starred chef Yu Bin to create the "Star Chef Sizzling" series, featuring the "Jing Yan Zhi Kao" (Beijing-style flamed grilling) as its centerpiece. This was followed in spring/summer 2026 by the "Shun Shi Er Niu" (Spring Momentum) series, pairing Zhangzhou spring bamboo shoots with lamp-shadow sauce steak — the first time Subway moved beyond the price and quality expectations of typical "fast food."

The truly imaginative step was turning collaborations into a systematic mechanism. In September 2026, alongside the Da Dong roast duck line, Subway announced its "Bai Wei Xin Jiang Hu" (A Hundred Flavors, New World) strategy: every autumn, they will partner with premium Chinese dining brands or renowned chefs to develop seasonal limited-edition products, with Da Dong as the inaugural partner. This isn't a one-off marketing event but a fixed system — consumers can now anticipate Subway's annual autumn Chinese limited editions much like they look forward to Starbucks' holiday offerings. A sandwich brand has thus established its own seasonal rhythm.

But the collaboration is just the surface; the real value lies in the supply chain breakthrough behind it. The roast duck sandwich may sound simple, but it's actually an engineering challenge: the duck skin needs to stay crispy without being softened by moisture from the bread and vegetables. The Da Dong team refined the duck's skin-to-fat ratio, centralizing pre-processing and flavor-locking steps in central kitchens. After cold-chain delivery to stores, staff only need to follow a standardized process for assembly, heating, and serving — store employees don't need to know how to roast duck, only how to heat it.

The significance extends beyond adding another new product. Subway China has effectively demonstrated that high-end Chinese culinary techniques can be deconstructed into standardized fast-food products replicable across a thousand stores. Once this pathway is proven, it theoretically means any Chinese cuisine category with technical barriers could be "translated" into fast food. The valuable asset isn't the collaboration itself, but the capability to industrialize high-end craftsmanship.

Previous Chinese-style products like pork jowl and teriyaki beef sandwiches have already been exported to markets across Asia-Pacific and even globally — previously, China waited for headquarters' approval; now, other markets wait for the Chinese team's output. A tangible shift is visible on the menu: at Subway China today, global classic items are in the minority, with the majority coming from local R&D.

Product and model changed, so the brand image had to change too. Subway's approach wasn't a simple premium repositioning, but a proactive engagement with younger consumers. The most consequential move was gaining independent control over store design. Zhu Fuqiang revealed that Subway's global store design is now divided into just two categories — China-designed and non-China — with the Chinese style receiving consumer recognition and potentially being adopted by markets across Asia and Europe in the future. For a market that had spent 30 years on the periphery of Subway's global system, independent design authority carries nearly as much weight as the operational rights themselves.

In November 2023, the first flagship store themed around the "submarine sandwich" concept opened in Shanghai, with a new avocado-green color scheme replacing the long-standing old visual identity.

On the communications front, Subway chose to embrace and amplify internet memes. "Sai Men," a playful nickname derived from netizen slang expressing affection for the brand, became central to their strategy. On September 17, 2025, leveraging both the brand's 60th anniversary and the launch of the "Star Chef Sizzling" series, Subway changed its profile pictures across Weibo, Xiaohongshu, WeChat, Douyin, and food delivery platforms to "Sai Men Wei Er" (a humorous homophone). They hung traditional Chinese plaques at the Shanghai flagship store, distributed "Sai Men headlines" newspapers at stores nationwide, and offered "Sai Men lucky fortune sticks" to dine-in customers.

The ambassador strategy also targets younger demographics: Wu Lei was signed in July 2025, followed by Zhang Linghe in July 2026 (his first-ever restaurant chain endorsement). IP collaborations proceeded in parallel — a "Little Beast" series with artist "Hua Bi Lao Wang" in 2025, and packaging designed in partnership with Budapest-based artist Judit Zengovari.

Once the least Chinese of Western fast-food chains has pushed localization this far, the story might seem complete. But business narratives have no "happily ever after." The 1,200-store milestone is both a landmark and the starting point for new challenges — at least three questions remain unanswered for Subway China.

First, can the direct-operation model be sustained? Direct operations are capital-intensive, as evidenced by the significant capital increase in early 2026. Beyond 1,200 stores, management complexity and operational scope rise exponentially, and high-density store openings could replicate "store cannibalization" within the direct-operated network. Public data doesn't disclose per-store revenue or profit margins, so whether the single-store model can support sustained expansion remains unverified.

A comparable case is Domino's China (Dashi Holdings, HKEX: 1405), which followed a similar "master franchise + direct operations" path: it achieved its first full-year profitability in 2024, with revenue of 4.314 billion yuan (up 41.4% year-over-year) and a payback period of about 12 months for new-market store investments. However, pizza relies more on delivery and has a more concentrated supply chain, which differs considerably from Subway's store-centric model — whether this logic transfers remains to be seen.

Second, is the lower-tier market viable? Currently, over 80% of new direct-operated stores are in first- and second-tier cities, with Shanghai and Beijing each having about 200 locations. But the 20-year, 4,000-store target inevitably requires going down-market. Will consumers in third- and fourth-tier cities pay 30 yuan for a sandwich? Can the supply chain — with its cold-chain requirements for fresh vegetables and freshly baked bread — handle the reach?

A reference point is KFC China: as of the end of 2025, it had 12,997 stores, with franchise locations accounting for 37% of net new openings that year, pursuing down-market expansion with a lighter model. Subway needs to catch up not just in store numbers, but in depth of market coverage.

Third, after direct operations prove successful, how will franchising be reintroduced? Subway China's turnaround is built on direct operations, but the 20-year, 4,000-store target cannot be achieved entirely through company-owned stores — capital, management bandwidth, and talent pipelines simply can't support it. Reintroducing franchising is a matter of time, yet the lessons of the previous franchise round haven't faded: uncontrolled locations, inconsistent quality, and the vicious cycle of store cannibalization. Can the standards established through direct operations be effectively transferred to franchisees? How should profit-sharing mechanisms be designed to break the "cut costs when profits shrink" death spiral?

Zhu Fuqiang expanded Burger King to 1,300 stores partly through franchising, but Subway's brand foundation is far thinner than Burger King's was — whether franchisees will follow is another open question.

These questions remain unanswered, but they will determine how far Subway China can go.

Returning to that roast duck sandwich — it's more than just a new product; it's a microcosm of Subway China's comprehensive localization. Within three years, the company replaced its operator, CEO, business model, product system, store image, and brand narrative — virtually everything that could be changed was changed. The core of this turnaround isn't what Subway did differently, but who was making the decisions.

Subway China's story isn't fundamentally about "how an American brand courted Chinese consumers." It's a story about "what a Chinese team can do with an American brand once it gains operational control." The operational rights are secured. The 1,200 stores are a fact on the ground; the 4,000-store target is a commitment. Between them lie three unanswered questions. The journey has just begun — but this time, at least, the decisions are being made by people who truly understand this market.