Subway for sale

For sale: One lightly used sandwich chain. Price tag: About ten billy.

What happened: Private equity firm Roark Capital is closing in on a deal to buy Subway for a reported price of US$9.6 billion, adding a foot-long trophy to its collection of fast food restaurants that also includes Arby’s, Baskin-Robbins, and Buffalo Wild Wings.

Catch-up: After being owned by just two founding for five decades, Subway put itself up for sale in February. After winning the 2000s like no other fast food chain, it started a steady decline right about when former spokesman Jared Fogle was arrested/

  • Since 2016, Subway has been on a closing spree in the US, shuttering an average of over 900 locations yearly on its way to the lowest number of locations since 2005. 

Yes, but: Subway has continued to grow in other places, signing 15 new franchising deals since 2021 that will result in 9,000 new restaurants abroad, including nearly 4,000 in China.

  • And to appease the domestic crowd, it’s rolled out changes to its menu, quality control, and online ordering—changes that are tentatively appearing to pay off.

In Canada: With nearly 3,000 restaurants, Canada has the second most Subways behind the US and has been tabbed by the company as a key market for restaurant expansion.

  • Of course, Subway has had its fair share of Canadian controversies, from peddling a $40 dollar lobster sandwich to an infamous CBC Marketplace report that accused the brand of beefing up its chicken with soy (an accusation it would eventually sue over). 

Bottom line: Despite the questionable ingredients and bizarre marketing stunts, the Subway brand has remained valuable enough for multiple PE firms looking to eat fresh.—QH