Subway chain sold to Roark Capital, ending decades as a family-owned business

Daniel J. Graeber
·1 min read
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UPI
The Subway chain of sandwich shops said Thursday it sold itself to Roark Capital, which already controls the likes of Arby's and Jimmy John's. Subway was founded as a single store in Connecticut in the 1960s. File Photo by Billie Jean Shaw/UPI

Aug. 24 (UPI) -- Describing the transaction as part of a global growth strategy, sandwich maker Subway said Thursday it would be acquired by private equity firm Roark Capital.

"This transaction reflects Subway's long-term growth potential, and the substantial value of our brand and our franchisees around the world," Subway CEO John Chidsey said.

Terms of the arrangement were not disclosed, though CNBC reported the company was seeking about $10 billion. Subway said the deal was a major milestone for the company as it now exploits Roark's deep bench in restaurant and franchise business models.

Roark Capital already includes chains such as Arby's and Jimmy John's. The arrangement does not appear to be related to financial strain for Subway, which said it's posted 10 consecutive quarters of growth in same-store sales.

In June, the company said that new agreements internationally would lead to more than 4,000 new restaurants within the next 20 years.

Subway has been in a rebranding campaign, and overhauling its take-out services, menu and in-store experiences.

"Subway has a bright future with Roark, and we are committed to continuing to focus on a win-win-win approach for our franchisees, our guests and our employees," Chidsey added.

The transaction ends nearly 50 years as a family-owned business. Peter Buck and Fred DeLuca founded the chain in 1965, opening the first Pete's Super Submarines restaurant in Connecticut. They renamed it "Subway" three years later.