As Sale to Roark Capital Pends, Subway Tests New Products, Other Changes

Two months have passed since word came that the Federal Trade Commission is investigating whether the sale of the Subway sandwich chain should go forward.

Yet, so far, there has been no indication of which way the FTC is leaning. And some FTC probes can take up to a year.

Opponents of the Subway sale to Roark Capital, the private equity firm that owns a bunch of other restaurant operators and franchises (including Subway rival Jimmy John’s), contend that adding Subway to Roark’s roster will consolidate too much of the sandwich market under one owner.

“We do not need another private equity deal that could lead to higher food prices for consumers,” Sen. Elizabeth Warren, D-Mass., said in throwing her support behind the FTC investigation.


What’s the Average Income of a Subway Restaurant Franchise Owner?


Roark will pay up to $9.55 billion for the sandwich chain, according to terms of the deal announced late last summer. Subway’s family owners had been hoping to fetch $10 billion when they put the company up for sale in February 2023.

The investigation is in the early stages, Politico reported late last year, adding: “Merger reviews by antitrust regulators can often take a year or more. The FTC can either sue to block the merger, reach an agreement with the companies that alleviates its concerns, or take no action at all.”

In the meantime, Subway is moving forward with new promotions and other changes intended to increase store sales.

Among the changes is a requirement that all franchises accept digital coupons. Among the new products is a collection of three snacks that Subway is calling, “Sidekicks.” The three new footlong snacks are a Subway chocolate chip cookie shaped into a long strip and big enough for four people, as well as footlong churros and pretzels.

Roark’s bid to acquire Subway followed a rebound that saw Subway’s sales climb in 2022 and early 2023.

Credit for the turnaround goes in part to new marketing campaigns, including a recent, zany, “wait a minute, they did what?” campaign.

Subway’s summer promotion asking superfans to show their super fandom went so well that 10,000 people had moved to change their names legally to “Subway” in exchange for sandwiches for life.

The “Subway” name promotion is in line with the latest installment in what Subway calls its “multiyear transformation journey.” The company, which remains one of the world’s largest chain restaurant operations despite closing thousands of outlets in recent years, is under pressure to improve the bottom line both for itself and its individual franchise owners.

“This update is Subway’s most complex, investing more than $80 million to bring deli meat slicers to more than 20,000 U.S. restaurants and installing a slicer every five minutes over the course of nine months to get ready for this summer’s debut,” Subway said in a news release. “To showcase its new freshly sliced meats, Subway’s culinary team spent over a year crafting the recipes for its Deli Hero subs.”

Subway will select one winner at random from those nearly 10,000 people who vowed to adopt “Subway” as their first name. The winner will also get money to cover legal fees to complete the name change.

Subway is one of the largest restaurant chains in the world.

In an in-depth look at Subway and at how much an average Subway franchise owner makes, StartupNation found these key points:

  • Initial investment in a Subway franchise is often lower than outlays for other franchises: Expect a franchise fee of $15,000 plus an estimated $207,000 to $477,000 to invest in a store, according to Subway’s estimates.
  • Success depends not just on total sales, which can be affected by location, competition and other factors, but also on how well franchise owners manage labor, food and other costs.
  • The benefit of Subway is not in owning a Subway franchise so much as owning multiple Subway franchises, according to several Subway franchise owners who posted about their experience on the StartupNation community forum. Posters say that multi-unit owners get the most out of the experience.

In early 2023, Subway confirmed it had hired JPMorgan to explore a possible sale of the company. Coming off a strong 2022 that saw its same-store sales climb 9.2%, Subway said its strategy was paying off.

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