It’s been a hard few years for restaurants and fast-food chains. Many big names have recently filed for bankruptcy as diners seek to save money on eating out amid rising prices.
However, one fast-food chain looks to have secured a favorable future. That chain is Jersey Mike’s Subs, the iconic sandwich maker with over 3,000 franchise locations across America.
The powerful private equity firm Blackstone announced today that it is taking a majority ownership stake in Jersey Mike’s Subs, and it has high hopes for the sub shop’s future.
What is Blackstone?
Blackstone is a private equity group that has its fingers in numerous parts of the economy—everything from housing to entertainment—and it seems partial to taking stakes in franchise operations, like Hilton Hotels.
It’s no surprise, then, that a popular and successful sandwich chain would be on its radar. According to the Wall Street Journal, Jersey Mike’s Subs is the second-largest sub-style sandwich chain by sales in the U.S. and that Blackstone’s deal values Jersey Mike’s Subs at around $8 billion.
But Blackstone, like any private equity firm, wants growth, and it says Jersey Mike’s Subs has high prospects to deliver that.
“The partnership with Blackstone is intended to help enable Jersey Mike’s to accelerate its expansion across and beyond the U.S. market, as well as its continued investment in technology and digital transformation,” the firm said in a statement.
How big could Jersey Mike’s get?
CEO Peter Cancro has said he believes the chain can expand to 4,000 locations and $6.5 billion in sales by 2027, according to WSJ, which first reported the news yesterday.
Cancro is one of the rare CEOs who has nearly a lifelong history with the company he helms. The 65-year-old began working at the chain’s first location in Point Pleasant, New Jersey, in 1971 when he was just 14 years old. At the age of 17, in 1975, he acquired the location.
He also changed the name from Mike’s Giant Size Submarines, which it had held since its opening in 1956, to Jersey Mike’s Subs. In 1987, Cancro began franchising locations, which have grown to more than 3,000 today.
As part of the deal, Cancro will retain “a significant equity stake” in the chain while also remaining its CEO. Blackstone says the deal is expected to close in early 2025, subject to regulatory approvals and other conditions.
For those keeping track, this isn’t the first time that a major sub sandwich chain has been scooped up by private equity. In 2023, Subway was sold to Roark Capital Group in a deal said to be worth $9 billion. Roark Capital is the owner of other chains, including Arby’s, Auntie Anne’s, Baskin-Robbins, Buffalo Wild Wings, Cinnabon, Dunkin’, Jamba, Jimmy John’s, and Sonic.