Last Updated on August 26, 2023 by Robert C. Hoopes
Private equity firm Roark Capital has acquired Subway, bringing an end to the six-decade reign of the family-owned business. This transaction marks a significant milestone in Subway’s multi-year transformation journey.
Roark Capital already holds investments in several prominent restaurant chains, including Arby’s, Auntie Anne’s, and Buffalo Wild Wings. The firm’s decision to add Subway to its portfolio demonstrates its confidence in the long-term growth potential and brand value of the popular sandwich chain.
The purchase price for the deal is reportedly around $9.6 billion, slightly below Subway’s original asking price of $10 billion. However, the transaction is still subject to regulatory approvals and customary closing conditions.
Despite recent positive sales and growth, the number of Subway stores in the United States has declined in recent years. This presents a challenge to Roark Capital, although the firm inherits a solid business, it will need to make strategic changes to improve sales and profitability.
To enhance efficiency and streamline operations, Roark Capital plans to consolidate the number of franchisees under the Subway brand. Additionally, the firm aims to engage consumers with innovative menu options, adapting to evolving preferences and staying competitive in the market.
In light of this acquisition, Subway’s CEO, John Chidsey, expressed his belief that the deal reflects the chain’s long-term growth potential and the value it places on its brand and franchisees.
Furthermore, there have been recent changes in Subway’s leadership team. Trevor Haynes, the president of Subway’s North America operations, will be leaving the company after 18 years. Douglas Fry will replace him next month, bringing his expertise and fresh perspective to the role.
Although Subway’s US revenue has rebounded in recent years, it still lags behind its sandwich-making rivals. Roark Capital’s acquisition signals a determination to revitalize the brand and strengthen its position in the market.
The purchase of Subway by Roark Capital signifies a new chapter for the iconic sandwich chain. With strategic changes and investments, Subway aims to reclaim its status as a leader in the quick-service restaurant industry, all while leveraging Roark Capital’s extensive experience in the sector.