Subway nears $9.6 bln sale to Arby’s owner Roark – Everything you need to know

Introduction:

There has been a lot of recent buzz surrounding fast-food chain Subway, with reports suggesting that the company may be close to finalizing a sale to Arby’s owner Roark Capital. According to the Wall Street Journal, the proposed deal would value Subway at a whopping $9.6 billion, which would make it one of the largest mergers in the restaurant industry to date. In this blog post, we’ll dive into the details and explore everything you need to know about Subway’s potential sale to Roark.

 

1. Background of Subway:

Subway is one of the world’s largest fast-food chains, with over 40,000 locations in 100 countries. It was founded in 1965 by Fred DeLuca and Peter Buck, and has since grown to become a household name with its famous “sub” sandwiches. However, the company has experienced a decline in sales in recent years due to increased competition and changing consumer preferences.

 

2. Who is Roark Capital?

Roark Capital is a private equity firm that specializes in franchise-based businesses. It owns several well-known restaurant chains, including Arby’s, Cinnabon, and Focus Brands (which owns Auntie Anne’s and Carvel). Roark is known for its aggressive approach to acquisitions and has been successful in turning around struggling businesses.

3. What is driving the potential sale?

The potential sale of Subway to Roark is likely driven by a desire to turn around the struggling chain. Subway’s sales have been declining in recent years, with a 4.4% drop in sales in 2017 alone. Additionally, the company has struggled with negative publicity in recent years, including a scandal involving its former spokesperson Jared Fogle. The proposed sale would allow Subway to implement changes and turn the company around with the help of Roark’s expertise.

 

4. Potential impact on franchisees:

While the sale is not yet final, it is expected to have a significant impact on Subway’s franchisees. If the sale goes through, Roark will likely make changes to the company’s operations and branding, which could affect the day-to-day operations of individual franchise locations. However, it is also possible that the sale could lead to an increase in sales and franchise profitability in the long run.

5. Implications for the fast-food industry:

The potential sale of Subway to Roark is significant for the fast-food industry as a whole. It would represent one of the largest mergers in the industry, and could lead to increased consolidation among major chains. Additionally, it could signal a shift in the industry towards more franchise-based businesses, as Roark’s expertise lies in this area.

Conclusion:

Subway’s potential sale to Roark Capital is a significant development in the fast-food industry. If the sale goes through, it could lead to major changes for the struggling chain, and could have significant implications for franchisees and the industry as a whole. While nothing is final yet, it will certainly be interesting to see how this develops in the coming weeks and months.