(qlmbusinessnews.com Fri, 25th Aug, 2023) London, UK —
Sandwich chain Subway is poised to be acquired by a private equity company, marking the conclusion of six decades under family ownership.
The business has revealed that it has reached an agreement with Roark Capital, a US-based private equity firm known for its association with brands such as Baskin-Robbins and Dunkin'.
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Although specific financial details of the transaction remain undisclosed, Reuters has indicated that the valuation exceeds $9 billion (£7.1 billion).
While Subway has experienced rapid expansion in recent times, it has also grappled with escalating expenses and intensified rivalry within the industry.
The acquisition is being lauded as a “significant achievement” by the company, with executives expressing that it underscores the “considerable value of our brand”.
This deal will establish Roark Capital as one of the preeminent global players in the restaurant sector. The firm already oversees the operations of the notable US-based restaurant conglomerate, Inspire Brands, which boasts ownership of well-known chains such as Jimmy John's, Arby's, Baskin-Robbins, and Buffalo Wild Wings.
John Chidsey, Subway's CEO, commented, “This transaction is an embodiment of Subway's prospective long-term growth, as well as the substantial value inherent in our brand and our global network of franchisees.”
Subway, originating in 1965 as Pete's Super Submarines in Bridgeport, Connecticut, was established by Fred DeLuca, a 17-year-old at the time, and his family friend Peter Buck. Following several rebranding efforts, the name Subway was eventually adopted in 1972.
Within a span of two years, they inaugurated 16 sandwich outlets within their home state and subsequently ventured into franchising the brand. At present, Subway boasts an extensive network of almost 37,000 establishments spanning more than 100 nations.
The ownership and management of Subway outlets are vested in franchisees, encompassing numerous entrepreneurs and proprietors of small-scale enterprises.
Roark Capital's profound proficiency in the realm of restaurant operations and franchise business models has been acknowledged by Subway. The sandwich chain has expressed confidence in a prosperous future alongside this private equity entity.
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Similar to many other enterprises, Subway has contended with escalating expenses related to diverse aspects, including energy and raw materials.
Despite these challenges, the company disclosed that its global sales surged by 9.8% during the initial half of the present year in comparison to the corresponding period in 2022.
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