Burger King parent Restaurant Brands International announced Monday that it agreed to acquire Firehouse Subs for $1 billion in an all-cash transaction.
Since 2010, the sandwich chain has tripled in size to roughly 1,200 stores and quadrupled systemwide sales to an expected $1.1 billion this year. Year-to-date through October, U.S. same-store sales were growing 20 percent versus 2019, and the brand projects $50 million in adjusted EBITDA for the full year. The chain's loyalty program, which represents more than 10 percent of transactions, includes nearly 3.5 million subscribers and enrolls roughly 50,000 additional customers per month. Delivery sales mixed about 14 percent in October, essentially the same as last year.
“At Firehouse Subs we are united in our commitment to and passion for hearty and flavorful food, heartfelt service, and public safety," Firehouse CEO Don Fox said in a statement. "Joining the RBI family of brands provides an energizing opportunity to assist more communities, not only across America and Canada, but around the globe. The donations we generate for our Foundation through our restaurants means changing and saving lives, so we can’t wait to accelerate our journey at home and around the world.”
Firehouse will join a multi-brand company that also features Popeyes and Tim Hortons, and boost RBI's systemwide unit count to more than 28,800. The company earned $1.5 billion in revenue in Q3, up from $1.3 billion in the year-ago period.
Ninety-seven percent of Firehouse's footprint is controlled by franchisees across 46 states, Canada, and Puerto Rico, leaving the chain with much whitespace internationally, according to RBI. Among Burger King, Tim Hortons, and Popeyes, more than 17,000 restaurants are outside the U.S.
“Firehouse Subs is a special brand with a talented team, impressive culture and community focus that resonates with guests and closely aligns with our core values at RBI," RBI CEO Jose Cil said in a statement. We see tremendous potential to accelerate U.S. and international growth at Firehouse Subs with RBI’s development expertise, global franchisee network and digital capabilities. We are excited to welcome the Firehouse Subs team to the RBI family and to continue our ambitious dream of building the world’s most loved restaurant brands.”
The transaction is expected to close in the coming months. Firehouse's headquarters will remain in Jacksonville, Florida, and Fox and CFO Vincent Burchianti will continue to manage the brand. The chain was founded in 1994 by brothers and former firefighters Chris Sorensen and Robin Sorensen. The Firehouse Subs Public Safety Foundation has donated $62.5 million to public safety organizations across 49 states, Puerto Rico, and Canada.
BofA Securities, Inc. and J.P. Morgan Securities LLC acted as financial advisers and Paul, Weiss, Rifkind, Wharton & Garrison acted as legal advisers to RBI. Firehouse Subs was advised by TD Securities and Latham and Watkins.