Subway Sold Itself to a Private Equity Firm — Here’s What Happened

3 min readAug 25, 2023

Key Takeaways

Subway, the sandwich chain that’s been under family ownership for five decades, is being sold
After a rough patch, Subway has been trying to turn itself around in the last few years
The exact price of the deal is unconfirmed

Subway sold itself to Roark Capital Group, the same private equity group that has its hands in a lot of fast food chains. Roark is a majority investor in Inspire Brands, which includes Arby’s, Baskin Robbins, Buffalo Wild Wings, Jimmy John’s, and Dunkin’ — to name a few. The ink dried on the deal on Thursday before market open.

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Does this change anything about my Spicy Italian sub?

If you frequent Subway, you probably won’t notice a difference. Roark has no plans to get involved in Subway’s day-to-day operations.

From a business perspective, the move is an interesting one for a few reasons. If the acquisition goes through at $9.6 billion as reported, this would the third-biggest restaurant deal…ever. Strategically, Roark owning both Subway and Jimmy John’s is raising at least a few eyebrows.

Morningstar Analyst Sean Dunlop said, “Given that they already own the Jimmy John’s brand — it’s extremely unusual to see a chain operate two concepts under the same quick-service restaurant ‘umbrella.”

But Subway has been performing really well recently, making it an attractive buy.

What’s behind Subway’s recent success?

Remember when Subway got in trouble for maybe selling fake tuna? That led to an “Eat Fresh Refresh” campaign and menu revamp in 2021. The new menu did well.

Subway opened about 750 restaurants in 2022 and another 145 in early 2023. Thinking way, way more long-term: The company has plans to open 4,000 restaurants globally in the next 20 years. Most recently, Subway reported its 10th consecutive quarter of positive sales in July.

So that’s a fair amount of positive momentum going into sale talks. However, Subway only recently turned the ship around. Prior to the refresh, Subway was steadily losing market share to other chains like Panera that were, well, eating Subway’s lunch. It hasn’t regained that ground. Subway currently controls about 23% of U.S. sandwich and deli market compared to the 34% it held in 2017.

The bottom line

Subway is a private company, but menu innovation and low prices are two things that consumers love from a variety of chains. McDonald’s, Tim Hortons, Burger King, and Starbucks have all reported sales growth of 10% or so through the first half of this year.

Even if fast food isn’t your thing, people have to eat. From an investment perspective, there’s something to be said for companies pushing the envelope when it comes to innovation and efficiency in the food industry. Q.ai’s Food Fund provides exposure to companies all along the global food chain, from farming to water distribution to grocery stores and restaurants.