Subway is reportedly nearing a $9.6 billion sale to a private equity company that already owns some of the biggest brands in the restaurant industry, according to the Wall Street Journal.
The sandwich chain is likely to be sold to Roark Capital, the owner of Inspire Brands (Buffalo Wild Wings, Jimmy John’s, Sonic, Dunkin’, Baskin-Robbins, and Arby’s), Focus Brands (Auntie Anne’s, McAlister’s, Schlotzsky’s, Cinnabon, Moe’s, Jamba, and Carvel), and CKE Restaurants (Carl’s Jr. and Hardee’s). If the deal does go through at that price point, it would be the largest restaurant purchase since Inspire spent $11.3 billion to buy Dunkin’ and Baskin-Robbins.
Sources told the publication that a deal could be finalized this week, although the process remains competitive and fluid. There’s a possibility that another company could swoop in with a better offer. Subway said it would not publicly comment on the matter until a transaction has been completed.
The Journal first reported the brand’s sales process in January and said the chain could be worth around $10 billion. Subway confirmed it was exploring a sales process several weeks later. In late March, Bloomberg reported that Roark was in the running to buy the fast-food giant. Other companies attached to the process include Goldman Sachs, Bain Capital, TDR Capital, TSG Consumer Partners, and TPG.
Subway is one of the world’s largest restaurant chains, with almost 37,000 stores across the world. It’s the biggest chain in terms of U.S. stores, with around 20,000. The company has spent the last few years deploying a multi-year turnaround strategy, which has involved a series of heavy menu innovations. In July, the company released its new Deli Heroes lineup—a group of sandwiches that are made with freshly sliced meat.
Ahead of the sales announcement, Subway made several leadership changes. President of North America Trevor Haynes said he will leave the brand at the end of 2023 after 18 years with the company. He will be replaced by Douglas Fry, country director for Subway, Canada, effective September 5. Haynes will remain on as an advisor. Also, former global CMO Carrie Walsh is now the president of Europe, Middle East, and Africa (EMEA). The former leader of EMEA, Mike Keoe, returned to the U.S. as global chief development officer, a new role at Subway. Additionally, Subway promoted Cristina Wells to senior vice president of U.S. Marketing.
Ahead of the expected sale, Subway set multiple financial records in the second quarter. The sandwich chain achieved its highest Northern American AUV for three straight months and reached its best weekly AUV in recorded history. In the first half of 2023, global comps rose 9.8 percent year-over-year.
