Roark Capital to buy Subway in deal valued at $9.6bn

It said the move is aimed at helping the chain to expand and improve its stores.

Terms of the deal weren’t disclosed, PTI reported.

Earlier this week, The Wall Street Journal reported that Atlanta-based Roark was offering around $9.6 billion for Subway, which is privately owned.

Long-term growth plans

CEO John Chidsey, who joined the company in 2019, said the deal reflected Subway’s long-term growth potential and the value of the brand.

The fast food chain plans to continue to modernise restaurants and expand internationally under Roark’s ownership, and its leadership team will remain in place, the company said.

Roark is a private equity firm with $37 billion in assets under management. It specialises in franchised businesses and backs two holding companies that own multiple restaurant chains: Inspire Brands, the parent of Arby’s, Dunkin’, Jimmy John’s and Buffalo Wild Wings; and Focus Brands, which owns Auntie Anne’s, Carvel, Cinnabon and Jamba.

Subway’s shrinking market share

The company, which has dual headquarters in Miami and Connecticut, was founded in 1965 and is still owned by its founding families. It’s now one of the world’s largest restaurant chains, with 37,000 outlets in more than 100 countries.

But in the US, it has been losing market share in recent years to fast-growing rivals like Panera and Firehouse Subs, which feature more varied menus and newer stores.

Subway currently controls about 23 percent of the estimated $43 billion US sandwich and deli market, according to Technomic, a consulting company – down from 34 percent in 2017.

The fast food retailer has been trying to catch up; in 2021 it refreshed its menu and last year it announced a line of chef-developed sandwiches after finding that customers were tiring of Subway’s traditional model of letting customers build their own sandwiches.

But in February, Subway announced it was exploring a sale.