Subway Franchise System to Switch to PepsiCo Beverages in 2025

Subway, one of the world’s largest restaurant franchises, is making yet another move to refresh the brand, according to a recent article on MSN. The franchise began moving toward switching to PepsiCo beverages in its restaurants earlier this year, but it was met with opposition from franchisees.

Recently, a major franchisee group that had previously encouraged members not to sign the contract due to a lack of financial transparency from the franchisor, conceded to the change.

“For its part, Subway threatened resistant franchisees with termination, or at the very least, being beverage-less on January 1,” MSN reported. “Eventually, the two sides came to an amicable agreement, removing any remaining roadblocks to a system-wide adoption of PepsiCo (PEP) beverages.”

The agreement, which will last for 10 years, will officially start on January 1, marking a major shift for a brand that has served Coca-Cola products in its U.S. restaurants for almost 20 years. A gradual rollout throughout the system will introduce beverages like Pepsi, Mountain Dew and Gatorade to the Subway lineup.

The decision to switch is part of Subway’s broader strategy to enhance its offerings and improve the guest experience. It will also centralize Subway’s suppliers as it extends a partnership with Frito-Lay, a subsidiary of PepsiCo, through 2030, potentially leading to increased operational efficiency and cost savings for franchisees.

While this is a notable shift in the U.S., PepsiCo is already represented in Subway locations across Canada, Germany and the Netherlands.