Jersey Mike’s, the fastest-growing sandwich chain in America, is reportedly exploring a sale.

The Wall Street Journal reported the fast casual is mulling a sale to private equity firm Blackstone. Jersey Mike’s is said to be valued at $8 billion. Sources told the Journal that conversations between the two sides have been off and on. Talks have recently died down, but Jersey Mike’s remains open to a potential deal.

The company is among the top five largest sandwich concepts in the U.S. in terms of sales and unit count, according to the QSR 50. The brand finished 2023 with 2,675 restaurants after opening a net of 288 units. It debuted a net of 296 stores in 2022 and a net of 244 outlets in 2021. CEO and founder Pete Cancro told QSR last year that Jersey Mike’s plans to open 350 restaurants in 2024 and 2025 and then jump to 400 to 450 in 2026. After that, the chain would settle into 13–15 percent annual growth. No other sandwich company is close to that pace of expansion.

The long-term target is 10,000 locations.

Jersey Mike’s earned $824,000 in AUV in 2019 and exited 2022 at $1.210 million. It sits closer to $1.35 million today. This growth occurred while taking price of about 9 percent—well under compared to most of the quick-service industry.The company reached a milestone in 2023 when it opened in Alaska, its 50th state. California is the state with the most Jersey Mike’s restaurants, followed by Florida, Texas, North Carolina, and home state New Jersey.

Cancro attributes Jersey Mike’s success to a focus on quality, freshness, and personalized service, distinguishing it from other sandwich chains. The brand’s dedication to training, evidenced by investments in employee compensation and development programs, has fostered loyalty and internal growth. Retrofits and technological advancements, including a new app and improved infrastructure, have positioned the company for continued success, even amidst challenges like the COVID pandemic.

Cancro acquired Mike’s Subs in 1975 at 17 years old—famously too young to legally slice a sub—with a $125,000 loan backed by his football coach.

If a sale were to happen, it would be the biggest transaction since Subway was purchased by Roark Capital last year for around $10 billion. The company has around 20,000 U.S locations—making it the biggest restaurant chain in America in terms of unit count—but has shuttered thousands of locations over the past several years.

Blackstone is familiar with the restaurant industry. It recently became an equity investor in 7 Brew, a quickly growing coffee chain. The company has expanded from nine units to around 200 in just three years.

Fast Casual, Franchising, Growth, Sandwiches, Story