55-year-old sandwich chain operator files Chapter 11 bankruptcy

The sandwich dining sector is a competitive market, with franchisees of various chains, such as Schlotzsky's, battling the industry leader Subway for market share.

Subway has had its share of problems, as the chain finished 2025 with 729 fewer locations, totaling 18,773.

Schlotzsky's has closed locations in 2026 but has not revealed a list of those restaurants. Its franchisees have also filed for bankruptcy protection to reorganize their businesses, which includes closing locations and rejecting leases.

Schlotzky's franchisee files for bankuptcy

Schlotzsky's Deli franchisee JPrieto Hospitality LLC filed for Chapter 11 bankruptcy protection after facing a severe decline in revenue in 2026, compared to the two previous years.

The San Antonio, Texas-based franchisee, which operated 10 Schlotzsky's locations in North Texas in early 2026, filed its petition on Nov. 5 in the U.S. Bankruptcy Court for the Western District of Texas, listing over $532,000 in assets and $350,000 in liabilities.

JPrieto's annual revenue has declined from $8.26 million in 2024 to $8.19 million in 2025, before falling to $4.11 million in 2026 until Nov. 5 when it filed for bankruptcy, according to the petition.

The debtor's largest unsecured creditors include Schlotzsky's franchisor GoToFoods . which it owes over $148,000; food and beverage supplier Ben. E. Keith, owed $35,000; TCR Heating & Air LLC, owed over $19,000; Cooling Equipment Specialist LLC, owed over $18,000; and produce supplier Brothers Food Service, owed $15,000.

Schlotzsky's was founded in Austin, Texas, in 1971 and operates about 280 restaurants in 25 states.

In addition to Schlotzsky's, franchisor GoToFoods' brands include Jamba, Auntie Anne's, Cinnabon, Moe's Southwest Grill, McAlister's Deli, and Carvel ice cream shops. GoToFoods is affiliated with Roark Capital Group.

JPrieto Hospitality operated 10 Schlotzsky's locations on March 31, 2026, according to a Franchise Disclosure Document provided by GetFDD . The franchisee listed five current Texas leases in its petition, including two in Fort Worth; and one each in North Mansfield, Grand Prairie, and Cedar Hill, Texas.

The debtor's petition also listed lease terminations in Weatherford, Hudson, and Granbury, Texas. The petition did not indicate if JPrieto is operating more than the five locations identified in the filing.

Other sandwich chain operators have had a difficult year in 2026, including Subway sandwich chain franchisee MTF Enterprises LLC , which began the year filing for Chapter 11 bankruptcy protection on Jan. 21, 2026, in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania.