Roark Capital Agrees to Buy Restaurant Chain Subway 

Roark Capital, a consumer and business service-focused private equity firm, has acquired sandwich shop Subway, beating out several contenders including a group led by TDR Capital and Sycamore Partners, putting an end to an 8-month auction process for the struggling restaurant chain. 

Financial terms of the transaction were not released, but multiple media outlets reported earlier this week that Roark was in the lead to buy the privately held restaurant chain for $9.6 billion. 

Roark Capital, based in Atlanta, owns Dunkin’ Donuts, Baskin-Robbins, Sonic, Arby’s, Buffalo Wild Wings, and Jimmy John’s through its holding company Inspire Brands. The company also owns Auntie Anne’s, Carvel, Cinnabon, Jamba, McAlister’s, Moe’s Southwest Grill and Schlotzsky’s through Focus Brands. 

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

Subway reported 10 consecutive quarters of positive same-store sales growth in the US, with average unit volumes reaching their highest level in a decade. The company has revamped its menu several times and revitalized its marketing.   

Despite this, 571 US restaurants shuttered last year, and some franchisees claim the firm has curtailed their ability to liquidate more locations. 

Subway was founded in 1965 by Peter Buck and Fred DeLuca as a single sandwich shop in Connecticut. It has since grown to more than 37,000 restaurants in more than 100 countries. 

J.P. Morgan is serving as financial advisor and Sullivan & Cromwell LLP is serving as legal counsel to Subway.