The Blubber

Subway has officially been bought out by Roark Capital.

Roark's reported $9.6 billion acquisition of Subway, as per the Wall Street Journal, faced scrutiny from the U.S. Federal Trade Commission over concerns that it would create an unfair advantage for the Atlanta-based private equity firm in the sandwich restaurant sector. Roark's Inspire Brands, another restaurant holding company, had previously acquired Jimmy John's in 2019.

With this acquisition, Roark now owns two of the largest sub sandwich companies in the U.S., solidifying its position in the market. Through Inspire Brands, Roark also controls Arby's, Buffalo Wild Wings, Sonic Drive-In, Mister Donut, Dunkin', and Baskin-Robbins, totaling 31,700 restaurant locations and $30 billion in system sales. Roark manages $38 billion in equity.

The purchase of Subway, a major quick-service restaurant brand, adds nearly 37,000 stores across over 100 countries and territories to Roark's portfolio.

The sale of Subway follows the chain's 2024 franchise disclosure document release, revealing the closure of over 400 U.S. restaurants last year, continuing a trend of net closures. Subway ended 2023 with 20,133 U.S. locations, the lowest since 2005, closing a total of 7,000 locations since 2015.

Despite these closures and franchisee concerns, Subway remains one of the world's largest restaurant chains. It ranked No. 7 on the Franchise Times Top 400 list with $19.1 billion in systemwide sales in 2022.

Subway reported a 5.9% increase in same-store sales in North America in 2023, marking 12 consecutive quarters of positive same-store sales globally, and the first positive global net restaurant growth since 2016.

Subway CEO John Chidsey expressed optimism about the company's future under Roark's ownership, emphasizing a strategic focus on improving food quality and guest experience.