Private equity firm Roark Capital, known for its ownership of brands like Baskin-Robbins and Dunkin’, is poised to acquire the sandwich chain Subway, marking the end of a six-decade-long era of family ownership.
Subway has confirmed that it has reached an agreement with Roark Capital, a US-based company. While specific terms of the sale were not disclosed, Reuters reported the valuation to be upwards of $9 billion (£7.1 billion).
Despite its rapid growth in recent years, Subway has encountered escalating costs and intensified competition within the market.
Characterizing the acquisition as a “significant milestone,” Subway highlighted that it underscores the “considerable value of our brand.”
With this sale, Roark Capital will emerge as one of the globe’s largest restaurant operators. The company already holds control over Inspire Brands, a prominent US restaurant conglomerate that oversees chains like Jimmy John’s, Arby’s, Baskin-Robbins, and Buffalo Wild Wings.
Subway’s CEO, John Chidsey, remarked, “This transaction underscores Subway’s enduring potential for growth and the substantial value of both our brand and our franchisees worldwide.
In 1965, Fred DeLuca and family friend Peter Buck founded Subway under the name ‘Pete’s Super Submarines’ in Bridgeport, Connecticut, when DeLuca was just 17 years old.
Over time, the business underwent multiple name changes before finally settling on the name ‘Subway’ in 1972.
Within a mere two years, they had inaugurated 16 sandwich shops within their home state and subsequently initiated the franchising of the brand. Today, the franchise boasts nearly 37,000 outlets spread across over 100 countries.
Subway restaurants are under the ownership and operation of franchisees, many of whom are entrepreneurs and small business proprietors.
Recognizing Roark’s extensive proficiency in the realms of restaurant and franchise business models, Subway acknowledged its promising future under the guidance of the private equity firm.
Like many enterprises, Subway has contended with rising expenses encompassing everything from energy costs to food ingredients.
Nonetheless, in July, the company reported a notable 9.8% increase in global sales during the first half of the present year when compared to the corresponding period in 2022.