Subway said Thursday it will sell to Roark Capital, a private equity firm specializing in restaurant management that will help the sandwich chain expand and improve its stores.
Terms of the deal were not disclosed. Earlier this week, The Wall Street Journal reported that Roark, based in Atlanta, would pay about $9.6 billion for the privately owned subway.
Subway CEO John Sitse, who joined the company in 2019, said the deal reflects Subway’s long-term growth potential and the value of the brand. Subway plans to continue to modernize restaurants and expand internationally under Roark’s ownership. Subway said its leadership team will remain in place.
Roark is a private equity firm with $37 billion in assets under management. It specializes in franchise businesses and supports two holding companies that own several restaurant chains: Inspire Brands, parent of Arby’s, Dunkin’, Jimmy John’s and Buffalo Wild Wings; and Focus Brands, which includes Auntie Anne’s, Carvel, Cinnabon and Jamba.
Subway, which has dual headquarters in Miami and Connecticut, was founded in 1965 and is owned by its founding families. It is now one of the largest restaurant chains in the world with 37,000 outlets in over 100 countries.
But in the U.S., it has been losing market share in recent years to fast-growing rivals such as Panera and Firehouse Subs, which have diversified menus and new stores. Subway currently controls about 23% of the $43 billion U.S. sandwich and deli market, according to consulting firm Technomic. This is down 34% from 2017.
The subway is trying to catch up; In 2021, it revamped its menu and announced a line of chef-created sandwiches last year after finding customers tired of Subway’s traditional model of letting customers build their own sandwiches.
But in February, Subway announced it was exploring a sale.
There is some momentum in the takeover of the tunnel. In July, the company said its global same-store sales __ or sales at locations open at least one year __ increased 9.8% from a year earlier. The company has remodeled 10,000 of its U.S. restaurants and recently spent $80 million to equip 20,000 of its U.S. restaurants with deli meat slicers.