On Aug. 24, 2023, an agreement was reached for the sale of the Subway sandwich chain. After a fierce bidding war, the sub-shop owners stand to earn billions of dollars. But, just like there’s no such thing as a free lunch, there are some caveats to the deal…
Subway Company Auctions Itself For Sale Despite Growth
Last month, we reported on Subway franchises closing in the U.S. but having success overseas.
At that time, representatives of the quick-service restaurant noted it was part of a larger restructuring plan.
This also seemed to poise the Subway corporation for sale and several organizations were hungry for the opportunity…
Firms Wanted a Bite Once Subway was “For Sale”
In February 2023, families of the original two Subway founders — DeLuca and Buck — began the auction for its sale.
THEY WERE SEEKING $10 BILLION FOR THE BUY-OUT.
Notable private equity firms made offers including TDR Capital and Sycamore Partners.
Ultimately, Subway announced it had a “definitive agreement” with Roark Capital via press release on August 24th.
SO HOW MUCH WAS THE SANDWICH FRANCHISE ULTIMATELY SOLD FOR?
Well, that is not set in stone at this point. The founding families and Roark have decided on an earn-out deal. That means Subway has to meet revenue expectations for the full sale amount to be paid…
The Earn-Out Won Out
Among all the bids for the sale of Subway, Roark Capital was the highest at $9.55 billion…
IF THEY CONTINUE TO GROW AND EARN AT THEIR CURRENT RATE.
However, failure to meet those goals over several years will result in only a $8.95 billion payout.
Nevertheless, the “eat fresh” eatery shows no signs of slowing down. The Deluca and Bucks did not get $10 billion for the sale of Subway, but it’s still a respectable amount of bread.
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