Subway Sandwich Chain Agrees to Be Eaten up by Roark Capital

The Subway sandwich chain announced Thursday it has agreed to be bought by the private equity firm Roark Capital under terms which have not been made public.

Earlier this week the Wall Street Journal reported Roark, named for the character Howard Roark from Ayn Rand’s 1943 novel The Fountainhead, was offering around $9.6 billion for the popular fast food outlet.

Roark Capital is acquiring the company from two families that have controlled the sandwich chain for nearly 60 years, with most of the sale proceeds going toward foundations affiliated with the founders, the WSJ detailed.

AP reports Subway CEO John Chidsey 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.

Atlanta-based Roark is a private equity firm with $37 billion in assets under management.

It specializes in franchised businesses, and owns multiple restaurant chains amongst other enterprises..

Current investments by Roark Capital include Arby’s, Auntie Annies, Carvel, Carl’s Jr., Cinnabon, Dunkin’, Jamba, Meineke Total Car Care, Schlotzsky’s Sonic, ServiceMaster, Primrose Schools, The Cheesecake Factory, and Anytime Fitness.

Subway, which has dual headquarters in Miami and Connecticut, was founded in 1965 and was still owned by its founding families before its sale.

It launched with a single sandwich shop in Connecticut by Fred DeLuca, who started with an initial $1,000 investment from family friend Peter Buck, as a way to pay his college tuition.

The two men famously started the venture based only on a handshake. DeLuca died in 2015, while Buck passed away in 2021.

It’s now one of the world’s largest restaurant chains, with 37,000 outlets in more than 100 countries.

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