Subway announced on Thursday that it will be acquired by Roark Capital, a private equity firm known for its restaurant management expertise. This acquisition is expected to facilitate the expansion and improvement of Subway’s stores. The specific terms of the deal have not been disclosed. According to the Wall Street Journal, Roark Capital has offered approximately $9.6 billion for Subway, which was established in 1965 and is still owned by its founding families. Subway CEO John Chidsey, who joined the company in 2019, stated that the deal signifies Subway’s potential for long-term growth and the value of its brand, as reported by the AP. Subway intends to continue its modernization efforts and expansion into international markets under Roark’s ownership. Additionally, Subway confirmed that its leadership team will remain intact.
With dual headquarters in Miami and Connecticut, Subway is globally recognized as one of the largest restaurant chains, operating 37,000 outlets across more than 100 countries. However, in the US market, Subway has been experiencing a decrease in market share in recent years due to the rise of fast-growing competitors like Panera and Firehouse Subs. These competitors offer more diverse menus and feature newer store concepts. Currently, Subway controls approximately 23% of the $43 billion US sandwich and deli market, according to Technomic, a consulting company. This is a decline from its 34% share in 2017.
In an effort to regain its market position, Subway has implemented various strategies. In 2021, the company refreshed its menu, and last year, it introduced a line of chef-developed sandwiches to cater to customer preferences that were shifting away from Subway’s traditional build-your-own sandwich model. However, in February, Subway made the decision to explore a sale. Roark Capital, with $37 billion in assets under management, specializes in franchised businesses and has investments in two holding companies that own multiple restaurant chains: Inspire Brands, which is the parent company of Arby’s, Dunkin’, Jimmy John’s, and Buffalo Wild Wings; and Focus Brands, the owner of Auntie Anne’s, Carvel, Cinnabon, and Jamba.
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