Skip to main content

A Subway Sale Worth Billions Could Be Coming Soon

Subway is not commenting on the whispers that are getting louder.

While Subway shops are ubiquitous in most American cities, the large sandwich chain has always been kept in private ownership. First launched in 1965 as Pete's Super Submarines, the Connecticut-headquartered chain pioneered the concept of custom fast-food and pointing at the ingredients one wants to a worker.

Operating on a similar model, fast-casual chains like Chipotle  (CMG) - Get Free Report and Sweetgreen  (SG) - Get Free Report launched much later in 1997 and 2007. The two went public a respective nine and 14 years after launching. But Subway, which had over 21,000 locations around the world as of 2021, has always remained private. 

At one point in 2011, Subway surpassed McDonald's  (MCD) - Get Free Report as the fast-food chain with the largest number of stores in the world.

One of the founders, Fred DeLuca, had been involved with running the chain since the 1960s and until his death in 2015. DeLuca's sister Suzanne Greco stepped up to a more leading role while former Restaurant Brands International  (QSR) - Get Free Report Burger King chief executive John Chidsey became, in 2019, the first person outside the family to lead the chain.

A nuclear physicist who helped fund DeLuca's vision in the 1960s, co-founder Dr. Peter Buck also passed away in 2021.

Subway Sale: Very Big If True

Over the years, some business outlets reported of growing complications related to keeping Subway between two families as well as its role in the future amid more competition.

On Jan. 11, the Wall Street Journal reported that the sandwich chain was exploring a potential sale. Sources with knowledge of the matter said that the chain has been attracting "corporate buyers and private-equity firms" for a deal that could be worth as much as $10 billion.

This would make it the biggest such fast-food sale since, in 2020, Sandford, Georgia-based Inspire Brands bought doughnut chain Dunkin' for $11.3 billion.

Subway has categorically refused to comment on this speculation and said that it was keeping its attention on helping its "franchisees be successful and profitable."

"As a privately held company, we don't comment on ownership structure and business plans," Subway said in a statement to media outlets. "We continue to be focused on moving the brand forward with our transformational journey to help our franchisees be successful and profitable."

A customer uses their Octopus card at a Subway shop in Quarry Bay. Photo: Xiaomei Chen

Subway Refuses To Comment But The Whispers Are Getting Louder

In recent years, Subway has downsized significantly from over 27,000 stores in 2015 to 21,000 now and has revamped its menu to shorten the amount of time customers spend waiting in line. This helped bring the chain's sales up 8.4% between October 2022 and 2021, as Subway last reported, and allowed it to focus on modernizing stores that were driving profit.

The sandwich chain has also been experimenting with new promotions, such as the Footlong Pass that costs $15 and gives holders 50% off its full-size sandwiches over the course of a month.

Deal talks often fizzle out and such a sale could fail to materialize for a variety of reasons. DealLogic numbers first reported by the WSJ shows that the number of deals in the U.S. fell 41% overall amid fears of a recession.

"While Subway is clearly interested in doing a deal, it is in no particular hurry and will likely be relaxed if nothing comes of its explorations," Neil Saunders, a managing director at data analytics and consultancy company GlobalData, told CNN. "This means buyers will need to pay a full price to get any transaction over the line."