Subway completed its sale to Roark Capital on Tuesday, ending a long and at times arduous sale process made more complex by regulatory concerns about the deal.
It also ends a years-long period of uncertainty for the Miami-based chain following the 2015 death of the chain’s cofounder and CEO Fred DeLuca, a period that ignited massive changes in the brand and thousands of store closures.
“The entire Subway system is excited that our sale to Roark is complete,” CEO John Chidsey said in a statement. “As we look to our future, our growth journey is far from over. With a continued strategic focus on delivering better food and a better guest experience, our next chapter will be the most exciting yet.”
Subway said there are “no anticipated changes to the company’s leadership team, strategic focus or operating plans.”
Subway hired advisers and put itself on the market early last year, following the 2021 death of Peter Buck, whose investment in Subway in 1965 led to the chain’s opening. Buck and DeLuca were the chain’s sole shareholders until DeLuca’s death.
The brand enjoyed decades of seemingly unstoppable growth that would make the brand the world’s largest restaurant chain by unit count. But the company has struggled in the years since DeLuca’s death.
Subway has closed 7,000 restaurants as the chain’s low-volume operators struggled with rising costs.
The brand in 2019 brought Chidsey on to get it on a better footing and steer its sale. The company laid off workers in Connecticut and ultimately opened a second headquarters in Miami.
It also unleashed changes to its business structure, largely shifting away from business developers that sold franchises and inspected stores and shared in royalties. The company has also made numerous menu changes, upgrading ingredients and adding new sandwiches.
Average unit volumes have improved, to $490,000 per location in the U.S. by 2023—an all-time high for the chain. Closures have slowed, but the brand is still closing more locations than any other restaurant chain in the country.
The sale process took longer than expected, and ultimately Roark stepped in with a $9.6 billion offer that reportedly includes an earn-out provision that leaves some of the price dependent on company performance.
In November, however, the U.S. Federal Trade Commission opened an investigation into the sale, according to the reports, amid concern about Roark’s level of ownership in the restaurant space.
Those concerns have apparently been satiated, paving the way for the sale to be complete.
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