{"id":1004677547,"date":"2023-08-25T02:30:43","date_gmt":"2023-08-25T10:30:43","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004677547"},"modified":"2023-08-25T07:25:14","modified_gmt":"2023-08-25T15:25:14","slug":"roark-capital-to-acquire-subway-chain-for-9-6b","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/roark-capital-to-acquire-subway-chain-for-9-6b\/","title":{"rendered":"After $9.6B Sale, What\u2019s Next for Subway\u2019s Footprint?"},"content":{"rendered":"
\"Roark<\/a>

Roark Capital has agreed to buy privately owned global sandwich chain Subway for a reported $9.6 billion. Image courtesy of Subway
<\/em><\/p><\/div>\n

The CEO of Subway<\/strong>, which has agreed to sell the privately owned global sandwich chain to private equity firm Roark Capital<\/strong> for a reported $9.6 billion, said Thursday the transaction reflects Subway\u2019s long-term potential, but one retail expert said most new growth would probably come from outside the U.S.<\/p>\n

\u201cMuch of the expansion will likely happen internationally. The number of U.S stores could still decline as they close underperforming locations, and work to try and re-establish their brand,\u201d Brandon Isner, head of Americas retail research at CBRE<\/strong>, told Commercial Property Executive.<\/em><\/p>\n

Citing Creditntell, Isner said Subway\u2019s U.S. stores dropped from more than 24,000 at the end of 2020 to approximately 20,748 at the end of 2022. There were 20,603 U.S. locations as of April, according to CNBC<\/em>. Subway, which states it is one of the world\u2019s largest quick service restaurant brands<\/a>, said it has nearly 37,000 restaurants in more than 100 countries. Subway restaurants are owned and operated by franchisees, including those outside the US.<\/p>\n

\n

READ ALSO<\/strong>: Net Lease Cap Rates Rise for 5th Straight Quarter<\/a><\/p>\n

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The Wall Street Journal<\/em> reported Subway has signed 15 international franchisee deals since 2021 and rapid overseas expansion is expected. Of the 9,000 international restaurants expected to open, nearly 4,000 locations could be in China over the next 20 years, according to the Journal<\/em>.<\/p>\n

\"Much<\/a>

Much of the expansion will likely happen internationally, says Brandon Isner, Americas Head of Retail Research, CBRE. Image courtesy of CBRE<\/em><\/p><\/div>\n

Roark, an Atlanta-based private equity firm with $37 billion in assets under management, focuses on investments in consumer and business service companies, including restaurant and retail businesses with franchise ownership and multi-location models. The company already has deep investments in U.S. restaurant chains, including Arby\u2019s, Buffalo Wild Wings, Sonic Drive-In and Jimmy John\u2019s, one of Subway\u2019s competitors that has been growing.<\/p>\n

Subway CEO John Chidsey told the Journal<\/em> Subway will be its own entity within Roark\u2019s investment portfolio. Chidsey said in a prepared statement Subway would have a bright future with Roark because of its deep expertise in restaurant and franchise business models. The Subway management team will remain after the sale closes and Chidsey said he expects to stay as well. Chidsey joined the company in 2019 and was the first CEO who was not a member of the chain\u2019s two founding families\u2014the DeLuca and Buck families.<\/p>\n

Subway said the transaction, the culmination of a monthslong auction for the nearly 60-year-old business, comes one month after the company announced its 10th consecutive quarter of positive same store sales. The company will continue to execute its strategy launched in 2021 that focuses on sales growth, menu innovation, modernization of restaurants, overall guest experience improvements and international experience.<\/p>\n

Isner said the CPI for food away from home remains high and Subway has managed to keep its prices at a competitive level and could benefit from value-conscious diners in an uncertain economic climate. But he also noted that much of the QSR sector\u2019s popularity post-COVID has been via drive-thrus. Since many of Subway\u2019s locations are in urban areas, they have not been able to capitalize on that trend, Isner said.<\/p>\n

Competitive bidding<\/h2>\n

Terms of the deal between Subway and Roark were not disclosed but people familiar with the transaction told the Journal<\/em> that Roark agreed to pay $9 billion and the remainder if financial targets are met. Other private equity firms reportedly interested in acquiring the company included TDR Capital<\/strong> and Sycamore Partners<\/strong>.<\/p>\n

J.P. Morgan<\/strong> is serving as financial advisor and Sullivan & Cromwell<\/strong> LLP is serving as legal counsel to Subway. A closing date was not released but is subject to regulatory approvals and customary closing conditions.<\/p>\n

Office moves<\/strong><\/h2>\n

The sale of the company comes just months after Subway opened a Miami office<\/a> with more than 64,000 square feet as its second headquarters. Located at 1000 NW 57th Court, the property will be known as 1000 Sub Way. The property is in the Waterford Business District, a joint venture of Nuveen Real Estate<\/strong> and Allianz Real Estate<\/strong> and is located near Miami International Airport.<\/p>\n

The company\u2019s home base has been in Connecticut since it was founded as Pete\u2019s Super Submarines in Bridgeport, Conn., in 1965. It has had its headquarters in Milford in New Haven County at Sub Way for many years but is planning a move shortly to nearby Shelton in Fairfield County. Subway is leasing 90,000 square feet at 1 Corporate Drive, where employees will have access to multiple dining options, fitness centers, recreational activities like tennis and basketball, medical facilities, covered parking and childcare centers.<\/p>\n","protected":false},"excerpt":{"rendered":"

Experts weigh in on the franchise\u2019s acquisition by a private equity firm.<\/p>\n","protected":false},"author":1068,"featured_media":1004677589,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,16,21783,23891,21742,21749],"tags":[32789,43145,43901,52141,51911],"class_list":["post-1004677547","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-international","category-investment","category-national","category-latest","category-retail","tag-cbre","tag-j-p-morgan","tag-nuveen-real-estate","tag-roark-capital","tag-subway"],"acf":[],"yoast_head":"\nAfter $9.6B Sale, What\u2019s Next for Subway\u2019s Footprint? - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"Roark Capital has agreed to acquire privately owned global sandwich chain Subway for a reported $9.6 billion.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/roark-capital-to-acquire-subway-chain-for-9-6b\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"After $9.6B Sale, What\u2019s Next for Subway\u2019s Footprint?\" \/>\n<meta property=\"og:description\" content=\"Roark Capital has agreed to acquire privately owned global sandwich chain Subway for a reported $9.6 billion.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/roark-capital-to-acquire-subway-chain-for-9-6b\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2023-08-25T10:30:43+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-08-25T15:25:14+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/08\/Subway_interior-featured.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"792\" \/>\n\t<meta property=\"og:image:height\" content=\"600\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Gail Kalinoski\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/roark-capital-to-acquire-subway-chain-for-9-6b\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/roark-capital-to-acquire-subway-chain-for-9-6b\/\",\"name\":\"After $9.6B Sale, What\u2019s Next for Subway\u2019s Footprint? - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/roark-capital-to-acquire-subway-chain-for-9-6b\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/roark-capital-to-acquire-subway-chain-for-9-6b\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/08\/Subway_interior-featured.jpg\",\"datePublished\":\"2023-08-25T10:30:43+00:00\",\"dateModified\":\"2023-08-25T15:25:14+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/fc5b5df1393e5023d2417bd48c2fda57\"},\"description\":\"Roark Capital has agreed to acquire privately owned global sandwich chain Subway for a reported $9.6 billion.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/roark-capital-to-acquire-subway-chain-for-9-6b\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/roark-capital-to-acquire-subway-chain-for-9-6b\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/roark-capital-to-acquire-subway-chain-for-9-6b\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/08\/Subway_interior-featured.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/08\/Subway_interior-featured.jpg\",\"width\":792,\"height\":600,\"caption\":\"Roark Capital has agreed to buy privately owned global sandwich chain Subway for a reported $9.6 billion. 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