Subway, the world's biggest restaurant chain by number of locations, recently said it plans on closing another 500 stores in the U.S. after closing more than 900 last year. The privately-held company said its focus will shift internationally in the decade ahead.

Investors can't buy Subway, but for those who own shares of other restaurant chains, Subway's announcement is great news.

Subway blinks first

The restaurant industry has been struggling with falling same-store sales the last few years. The metric, which combines foot traffic and the size of guest's bills, is a key measurement for individual location growth and profitability. The more customers who use a store, the more profitable it is for the owner.

Chart by author. Data source: TDn2K.

Same-store sales have recently eked out small gains, but foot traffic has remained negative. During the first quarter of 2018, the average restaurant had a 2.7% fall in number of customers coming through the door compared with a year ago. One of the main culprits has been over-expansion. Consumers have steadily increased their budget eating out since 2009, and restaurant operators have seized the opportunity to expand.

Locations have hit critical mass, though, so some chains are paring back. Subway was one of the chief offenders in the new opening craze, because the company makes money off of franchise fees and can profit even if a franchisee is in the red. As a result, there were more than 25,000 Subways in the U.S. last year. However, total nationwide sales are now suffering -- which does impact franchise fees -- thus creating the need to consolidate.

Why investors should care

While a few chains have bucked the trend the last few years, overall foot traffic and same-store sales have suffered across the industry. With a significant number of stores from the biggest restaurant operator shuttering, foot traffic at surviving chains could see an uptick and improved profitability. Which restaurants could benefit the most from Subway's pullback?

Image source: Getty Images.

In the casual dining segment, Texas Roadhouse (NASDAQ: TXRH) has been a standout for years. Same-store sales contraction hasn't been an issue there, even as the company has expanded its footprint. While Roadhouse isn't a direct competitor to quick service brands, it operates primarily in suburbia -- a market Subway is strong in as well, tucked away next to grocery stores and in small shopping centers in neighborhoods across the country. If those underserved areas end up with even fewer options to grab a meal on the go, the steakhouse's growing to-go order initiative could get a bump.