Thank you for the opportunity to help you with your question!
Yes I believe Subway has used and is still using the differentiation strategy to establish a strong position in the fast food marketplace. When Subway started in 1965 they had the goal of selling healthy fresh sandwiches as opposed to McDonalds selling oily foods. McDonald's opened in 1955, ten years before Subway. Kentucky Fried Chicken opened in 1930, before Subway. Subway distinguished itself from McDonald's and KFC by selling healthy sandwiches, as they claimed in their company introduction.
Please let me know if you need any clarification. I'm always happy to answer your questions.