Sandwich chain Subway will be sold to fast-food investor Roark Capital

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The Subway logo is seen on takeout boxes at a restaurant in Londonderry, N.H. The sandwich chain says it will be sold to the private equity firm Roark Capital. Terms of the deal weren't disclosed. / AP

Subway said Thursday it will be sold to Roark Capital, a private equity firm with expertise in restaurant management that could help the sandwich chain expand and improve its stores.

Terms of the deal weren't disclosed. Earlier this week, The Wall Street Journal reported that Atlanta-based Roark was offering around $9.6 billion for Subway, which is privately owned.

Subway CEO John Chidsey, who joined the company in 2019, said the deal reflects Subway's long-term growth potential and the value of the brand. Subway plans to continue to modernize restaurants and expand internationally under Roark's ownership. Subway said its leadership team will remain in place.

Roark is a private equity firm with $37 billion in assets under management. It specializes in franchised businesses and backs two holding companies that own multiple restaurant chains: Inspire Brands, the parent of Arby's, Dunkin', Jimmy John's and Buffalo Wild Wings; and Focus Brands, which owns Auntie Anne's, Carvel, Cinnabon and Jamba.

Subway, which has dual headquarters in Miami and Connecticut, was founded in 1965 and is still owned by its founding families. It's now one of the world's largest restaurant chains, with 37,000 outlets in more than 100 countries.

But in the U.S., it has been losing market share in recent years to fast-growing rivals like Panera and Firehouse Subs, which feature more varied menus and newer stores. Subway currently controls about 23% of the $43 billion U.S. sandwich and deli market, according to Technomic, a consulting company. That's down from 34% in 2017.

Subway has been trying to catch up; in 2021 it refreshed its menu and last year it announced a line of chef-developed sandwiches after finding that customers were tiring of Subway's traditional model of letting customers build their own sandwiches.

But in February, Subway announced it was exploring a sale.

Subway has some momentum going into the acquisition. In July, the company said its global same-store sales __ or sales at locations open at least a year __ were up 9.8% from the prior year. The company has remodeled 10,000 of its U.S. restaurants and recently spent $80 million to provide its 20,000 U.S. restaurants with deli meat slicers, a first for the brand.

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