RESTAURANTS : Franchise Files: Pizza & Subs - The Gap Widens

Research evidence excerpt

RESTAURANTS : Franchise Files: Pizza & Subs - The Gap Widens

EQUITIES

RESTAURANTS

Franchise Files: Pizza & Subs – The Gap Widens

We updated our proprietary franchise database using ~23K pages of FDDs across nearly 60 chains11 MAY 2026

Sector Research Report and ~160K locations. This marks the fourth edition of our Franchise Files. Today’s dish: Pizza &

Production time: 11:12* (London time)

Subs. Links to our previous editions: Coffee, Burgers, Chicken.

Research Analysts & Publishing Entities

Steve McManus Both the Pizza & Subs menu categories have seen bifurcation as the defining theme

BNP Paribas Securities Corp1 Pizza saw -0.3% Y/Y sales decline in ’25 per Technomic; Sandwich grew +0.3% - both trailing +2.9%

(+1) 347 899 5065

Stephen.Mcmanus@us.bnpparibas.com for overall LSR. Underneath, share is diverging sharply (Figure 2): Dominos and Jersey Mikes are

winning; Pizza Hut, Papa Johns, Subway and Panera are losing.

Ken Deng

BNP Paribas Securities Corp1

(+1) 631 568 6767 The FDD filings reveal what headline data misses

kaiyuan.deng@us.bnpparibas.com 1) Franchisee economics continue diverging. Dominos leads the group on investment efficiency

while legacy systems (Subway, Pizza Hut, and Arby’s) continue rationalizing units.

2) Scale advantages widening. AUV growth led by Dominos, Jimmy Johns and Jersey Mikes. DPZ

leads in consistency – ~51% franchisee unit above chain AUV, +100bps Y/Y (Figure 5, Figure 6).

3) Development is clustering into fewer battlegrounds. Projected openings skew heavily to TX,

CA, and FL, raising future saturation debates (Figure 9).

4) Margin pressure remains uneven, disclosure is limited, but telling – Dominos EBITDA margin

compressed while Panera improved.

5) The footnotes matter, from delivery fees to digital menu board Capex, FDD disclosures