Sandwich chain Subway to be sold to fast-food investor Roark Capital

Subway mentioned Thursday it is going to be offered to Roark Capital, a non-public fairness agency with experience in restaurant administration that might assist the sandwich chain broaden and enhance its shops.

A temporarily closed sign hangs on the door of a Subway outlet.(AFP)
A briefly closed signal hangs on the door of a Subway outlet.(AFP)

Phrases of the deal weren’t disclosed. Earlier this week, The Wall Road Journal reported that Atlanta-based Roark was providing round USD 9.6 billion for Subway, which is privately owned.

Subway CEO John Chidsey, who joined the corporate in 2019, mentioned the deal displays Subway’s long-term development potential and the worth of the model. Subway plans to proceed to modernise eating places and broaden internationally beneath Roark’s possession. Subway mentioned its management staff will stay in place.

READ | After McDonald’s, some Subway shops drop tomatoes off the menu citing high quality difficulty

Roark is a non-public fairness agency with USD37 billion in property beneath administration. It specialises in franchised companies and backs two holding corporations that personal a number of restaurant chains: Encourage Manufacturers, the guardian of Arby’s, Dunkin’, Jimmy John’s and Buffalo Wild Wings; and Focus Manufacturers, which owns Auntie Anne’s, Carvel, Cinnabon and Jamba.

Subway, which has twin headquarters in Miami and Connecticut, was based in 1965 and continues to be owned by its founding households. It is now one of many world’s largest restaurant chains, with 37,000 shops in additional than 100 nations.

However within the U.S., it has been dropping market share in recent times to fast-growing rivals like Panera and Firehouse Subs, which characteristic extra various menus and newer shops. Subway at present controls about 23% of the USD 43 billion U.S. sandwich and deli market, in line with Technomic, a consulting firm. That is down from 34% in 2017.

Subway has been attempting to catch up; in 2021 it refreshed its menu and final yr it introduced a line of chef-developed sandwiches after discovering that prospects have been tiring of Subway’s conventional mannequin of letting prospects construct their very own sandwiches.

However in February, Subway introduced it was exploring a sale.

Subway has some momentum going into the acquisition. In July, the corporate mentioned its international same-store gross sales __ or gross sales at areas open no less than a yr __ have been up 9.8% from the prior yr. The corporate has reworked 10,000 of its U.S. eating places and just lately spent $80 million to supply its 20,000 U.S. eating places with deli meat slicers, a primary for the model.

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