Roark Capital’s $9.6bn takeover of Subway wagers that disciplined franchising, digital upgrades, and margin-focused innovation can revive a fading giant. Predictable royalties and heavy leverage offer upside, if franchisee trust and brand relevance can be restored.
Roark Capital’s roughly $9.6 billion acquisition of Subway marks one of the most consequential private-equity deals in the modern fast-food industry. Announced on August 24, 2023, and closed on April 30, 2024, the deal transfers ownership from the founding DeLuca and Buck families to Roark’s affiliates. The transaction was financed through a combination of equity and a record-breaking $3.35 billion whole-business securitization (WBS). This structure leverages the brand’s royalty streams to secure lower-cost debt. Subway is a legacy brand—behind only McDonald’s and Starbucks in U.S. locations among all food and beverage chains—yet burdened by declining U.S. store counts (down to roughly 20,000 units in 2023 from a peak of nearly 27,000 in 2015), strained franchisee relations, and a brand identity that has struggled to stay relevant. This combination of recurring, predictable cash flow (generating approximately $970 million in 2023 revenue) and a fragmented, even incoherent,
