Roark Capital to Acquire Subway, Ending Family Ownership

One sentence summary – Private equity firm Roark Capital is set to acquire Subway, ending the family ownership that has been in place since the company’s inception in 1965, with Roark’s final bid reportedly amounting to around $9.6 billion; despite the acquisition, Roark intends to maintain Subway as a separate entity within its portfolio, and Subway’s recent efforts, including menu changes and technology investments, have shown promising results in terms of increased sales, presenting an opportunity for continued growth and development within the restaurant industry under Roark’s ownership.

At a glance

  • Roark Capital is set to acquire Subway, ending the family ownership since its inception in 1965.
  • Roark’s final bid for Subway was around $9.6 billion, slightly lower than the initial $10 billion sought by Subway.
  • Roark Capital has a diverse portfolio of restaurant chains, including Arby’s, Buffalo Wild Wings, and Jimmy John’s.
  • Subway has been implementing revitalization efforts under CEO John Chidsey, including menu revamps, franchise recruitment initiatives, and technology investments.
  • Despite the acquisition, Roark intends to maintain Subway as a separate entity within its portfolio.

The details

Roark Capital, a private equity firm, is set to acquire Subway.

This acquisition will end the family ownership that has been in place since Subway’s inception in 1965.

Subway initially sought $10 billion in the sale process.

However, Roark’s final bid reportedly amounted to around $9.6 billion.

Roark Capital’s Diverse Portfolio

Roark Capital is known for its diverse portfolio of restaurant chains.

This portfolio includes Arby’s, Buffalo Wild Wings, and Jimmy John’s.

Roark recognizes Subway’s unparalleled reach and annual sales.

This makes Subway an attractive addition to Roark’s holdings.

Subway’s Revitalization Efforts

Despite the acquisition, Roark intends to maintain Subway as a separate entity within its portfolio.

Under the leadership of CEO John Chidsey, Subway has been implementing various changes.

These changes are aimed at revitalizing the brand.

They include menu revamps, franchise recruitment initiatives, and technology investments.

These efforts seem to be paying off.

This is evidenced by the 9.8% increase in Subway’s same-store sales during the first half of this year.

Over the past decade, Subway has faced challenges.

Declining sales have been attributed in part to the pressure on franchisees’ profits.

This pressure resulted from the popular $5 footlong sandwich deal and aggressive expansion endeavors.

However, the company has been actively working to address these issues.

This is reflected in the closure of 571 units in 2021.

This is a significant decrease compared to the more than 1,600 closures in 2020.

Fred DeLuca and Peter Buck, the co-founders of Subway, have left their shares to their respective families.

The families were convinced by CEO John Chidsey to consider selling the company.

This led to the current acquisition by Roark Capital.

In summary, Roark Capital’s acquisition of Subway signifies the end of the sandwich chain’s family ownership.

Subway’s recent efforts, including menu changes and technology investments, have shown promising results in terms of increased sales.

Despite previous challenges, the company’s future under Roark’s ownership presents an opportunity for continued growth and development within the restaurant industry.

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cnbc.com
– Roark Capital is acquiring Subway, ending the sandwich chain’s family ownership.
– Subway sought $10 billion in the sale process, but Roark’s final bid was reportedly around $9.6 billion.
– Roark Capital’s portfolio includes several restaurant chains, but Subway surpasses them in terms of the number of restaurants and annual sales.
– Roark plans to keep Subway as a separate entity within its portfolio.
– Subway has been implementing changes under CEO John Chidsey, including menu revamps, franchise recruitment, and technology investments.
In the first half of the year, Subway’s same-store sales increased by 9.8%.
– Subway was founded in 1965 and grew from a single sandwich shop to a global restaurant giant.
The company’s sales have declined for about a decade, partly due to the pressure on franchisees’ profits from the $5 footlong sandwich deal and aggressive development.
– Subway closed 571 units in 2021, a significant decrease from the more than 1,600 closures in 2020.
The company’s co-founders, Fred DeLuca and Peter Buck, left their shares to their respective families.
– Subway CEO John Chidsey convinced the families to consider selling the company.

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