Subway to be bought by private equity firm.
Subway Announces Takeover by Roark Capital
Exciting news in the restaurant industry! Subway, the popular restaurant chain, has just announced that it will be taken over by private equity firm Roark Capital. This acquisition, revealed on August 24, marks a significant milestone for Subway’s future.
While the exact details of the transaction remain undisclosed, reports suggest that Roark offered $9.6 billion to acquire Subway. Although slightly less than the $10 billion sought by the founding families who own the sandwich company, this deal still holds immense potential.
Roark Capital, with $37 billion in assets under management, is no stranger to the food industry. They control Inspire Brands, which owns renowned food chains like Baskin-Robbins, Buffalo Wild Wings, Arby’s, and Jimmy John’s. With their expertise and resources, Roark is well-positioned to support Subway’s growth and success.
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John Chidsey, CEO of Subway, expressed his optimism about the future of the brand under Roark’s ownership. He stated, “This transaction reflects Subway’s long-term growth potential and the substantial value of our brand and our franchisees around the world.”
Subway has been experiencing positive sales growth, with its tenth consecutive quarter of positive sales reported last month. In the first half of 2023, the company saw a remarkable 9.8 percent increase in same-store sales compared to the previous year. Additionally, digital sales grew by 11.1 percent.
With a presence in over 100 countries and nearly 37,000 restaurants worldwide, Subway is a global powerhouse. Mr. Chidsey emphasized that Roark’s expertise in franchising, international development, and digital ordering strategies will be invaluable as Subway aims to expand its reach with an additional 23,000 restaurants in the coming years.
While Subway focuses on international expansion, it has been streamlining its operations in the United States. The number of Subway outlets in America decreased from a peak of 27,100 in 2015 to around 20,600 by the end of last year.
Subway’s Journey Over the Years
Let’s take a trip down memory lane and explore Subway’s remarkable journey. The sandwich giant was founded in 1965 by two friends, Fred DeLuca and Peter Buck. Starting with a humble sandwich shop in Connecticut, Subway quickly gained popularity for its affordable offerings.
After the unfortunate passing of Fred DeLuca in 2015, his family took control of his 50 percent share in the company. Suzanne Greco, Fred’s sister, assumed leadership until her retirement in 2018. Peter Buck, the other co-founder, passed away in 2021, leaving his half of Subway to a charity run by his children.
In November 2018, John Chidsey became the CEO of Subway, making him the first individual outside of the founding families to lead the company. Under his guidance, Subway has continued to evolve and adapt to the changing market.
As Subway embarks on this new chapter with Roark Capital, the future looks bright. The combination of Subway’s brand strength and Roark’s expertise sets the stage for continued success and growth in the years to come.
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