Chronic Slump: Subway Sold for 13 Trillion Won in the US (Comprehensive)

Private Equity Fund Holding Baera and Dunkin Acquires

American sandwich chain Subway has been sold for 13 trillion won to a US-based private equity firm that owns Baskin-Robbins and Dunkin' Donuts.

According to major foreign media on the 24th (local time), US-based private equity firm Roark Capital Group has agreed to acquire Subway from the founding family, including debt, for $9.55 billion (approximately 12.7 trillion won). The target completion date for the sale is August next year.

Foreign media, citing sources, reported that the initial asking price was over $10 billion, but the sale price was lowered due to market saturation and worsening business conditions.

Roark Capital Group is a private equity firm based in Atlanta, USA, that has made aggressive investments in restaurant chains and the food industry. It currently owns pretzel chain Auntie Anne's, sandwich chains Arby's and Jimmy John's, ice cream brand Baskin-Robbins, and donut brand Dunkin' Donuts.

[Image source=AFP Yonhap News]

Subway, a fast-food chain specializing in sandwiches and salads, first opened in 1965 in Bridgeport, Connecticut, USA. It was owned privately by the founding family for over 50 years, but after the deaths of the founder and co-founder, it has been operated under professional management since 2019.

According to market research firm Technomic, Subway ranked 8th among restaurant chains in the US by revenue at the end of last year. The number of Subway stores in the US was 20,810 (as of the end of last year), accounting for more than half (56%) of its global store count of 37,000.

Subway grew its business by aggressively expanding stores in low-rent areas in the US (such as inside subway stations), but due to intensified competition from similar businesses and continued poor performance, it has been closing stores one after another in the US. The number of stores, which reached 33,800 in 2010, sharply shrank during the COVID-19 pandemic, declining by more than 38% as of the end of last year.

Due to store closures and decreased customer visits, revenue peaked at $18 billion (approximately 24.14 trillion won) in 2012 but plummeted to $9.8 billion (approximately 13.14 trillion won) last year, remaining in poor performance for over a decade. To overcome chronic sluggishness, Subway has been attempting to break through the crisis by revamping its menu, remodeling stores, and increasing marketing expenses.

Subway plans to use this sale as an opportunity to find new growth paths in overseas markets. Since 2021, it has aimed to open more than 9,000 new overseas stores through franchise agreements. In particular, it plans to open over 4,000 new stores in the Chinese market alone.

This content was produced with the assistance of AI translation services.