Subway was sold to Roark Capital, a private equity firm and owner of Dunkin’

In this illustration, a Subway meal is seen on a table at a Subway restaurant on January 12, 2023 in Austin, Texas.

Brandon Bell | Getty Images

Roark Capital has purchased Subway, ending more than five decades of family ownership of the sandwich chain and marking a new era for the ailing company.

Thursday’s announcement ends the long-running sale process for the chain, which began publicly in February. Subway is said to have asked for $10 billion, a high price that has alienated as many potential suitors as restaurant conglomerates, leaving only private equity firms to beat it at auction. Other reported bidders include TDR Capital and Sycamore Partners.

Subway and Roark did not announce the price of the deal. But the Wall Street Journal mentioned On Monday that the company’s final offer was about $9.6 billion.

Roark’s current portfolio includes more than a dozen restaurant chains. Subway outperforms all of them in terms of number of restaurants, and has more annual sales than all restaurants except Dunkin’.

Through the Inspire Brands holding company, Roark owns Dunkin’, Baskin-Robbins, Sonic, Arby’s, Buffalo Wild Wings and Jimmy John’s. Separately, and based under Focus Brands, the company owns Auntie Anne’s, Carvel, Cinnabon, Jamba, McAlister’s, Moe’s Southwest Grill, and Schlotzsky’s restaurants. Rourke also invested $200 million in the Cheesecake Factory during the early days of the Covid pandemic to help the struggling chain avoid bankruptcy.

“In essence, Roarke brings more to the table than other investors might, and while the deal closed on a cold cash basis, the outcome was fine,” wrote Neil Saunders, retail analyst and managing director of GlobalData analytics. note.

Roark plans to keep Subway as a separate entity within its portfolio, Subway CEO John Chidsey he told the magazine.

Subway is trying to turn around its business under the leadership of Chidesey, who joined the company in 2019. The company has revamped Its roster has hired new franchisees and invested in technology. In the first half of the year, same-store sales increased by 9.8%, indicating that the shift may be well established.

“This transaction reflects Subway’s long-term growth potential, and the significant value of our brand and franchisees around the world,” Chedsee said in a statement Thursday.

Founded in 1965 by Fred DeLuca and Peter Buck, Subway has grown from a single sandwich shop in Connecticut to an international restaurant giant.

But for nearly a decade, the company’s sales have been declining. The popular 5-foot sandwich deal and aggressive development put pressure on the franchisees’ profits. The chain was hit further by the high-profile trial of former speaker Jared Fogle and the death of CEO DeLuca, both of which occurred in 2015.

Underground finished 2022 with nearly 20,600 locations open in the United States, down from its peak of 27,100 in 2015, according to franchise disclosure documents. While the chain is still closing franchise locations, the pace has slowed considerably. The chain closed 571 units last year, down from the more than 1,600 restaurants it closed in 2020.

Half of DeLuca’s company was left to his family after his death. Buck, who died in 2021, left his property to a charity run by his sons. Chedsee said Online restaurant business He convinced the two families to consider selling the company.