US sandwich chain Subway which has 2,300 UK outlets could be sold after nearly 60 years of family ownership due to surging costs and increased competition
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Popular lunchtime haunt Subway could be sold, affecting more than 2,300 UK-based restaurants, it was announced on Tuesday.
The U.S. sandwich chain said it was exploring a possible sale of its business as it faces surging costs and mounting competition from deeper-pocketed rivals.
The Wall Street Journal said last month a potential sale could value Subway at more than $10 billion.
Founded in 1965 by 17-year-old Fred DeLuca and family friend Peter Buck, the company has been owned by the founding families since its first restaurant opened as ‘Pete’s Super Submarines’ in Bridgeport, Connecticut.
It has more than 37,000 restaurants in over 100 countries, including 2,301 in the UK, but has closed more than 1,000 sites since 2021.
The sandwich firm, which was founded by the then 17-year-old Fred DeLuca in 1965 and has remained family-owned, is looking for potential buyers
Subway has more than 37,000 restaurants in over 100 countries, including 2,301 in the UK, but has closed more than 1,000 sites since 2021
In a statement on Tuesday the firm said shareholders were seeking out potential buyers.
‘There is no indication of timing or assurance that a sale will occur. J.P. Morgan is advising the company and will conduct the sale exploration process.
‘The company does not intend to make any further public comment regarding the process until it has been completed,’ the statement read.
A focus on menu innovation, modernisation of restaurants and improvements to its overall experience will continue, the company promised.
In 2021, Subway decided to overhaul its menu and pour more money into marketing in a bid to win back customers with its new sandwiches amid stiff competition from Popeyes and Chick-fil-A.
The company, one of the world’s largest quick-service restaurant brands, earlier this month reported a 9.2% jump in same-store sales for 2022.
It reported that 2022 was a record-breaking year for the chain as it exceeded sales projections and achieved eight consecutive quarters of positive growth.
The sandwich chain has seen a number of scandals over recent years, including a 2021 class action lawsuit filed in California which said that there was no tuna in the shop’s sandwiches, a claim that Subway contests.
Another lawsuit claimed that the chain was exploiting immigrants by misleading them about fees and encouraging competition in small areas.
Confirmation of the potential sale comes after it was announced at the beginning of this month that co-founder Peter Buck, a nuclear physicist who died in 2021, left his half of the chain to charity.
The multibillion-dollar donation comes from the late Peter Buck, a former nuclear physicist whose $1,000 investment helped create the sandwich empire. He died at age 90 in 2021
Subway was founded co-found by Fred DeLuca and Peter Buck in 1965, with DeLuca (above) serving as CEO during the peak of the restaurant’s popularity
The report comes amid rumors of a potential sale of the company. Since its meteoric rise in the early 2000s, it has struggled to stay relevant, closing dozens of stores and restructuring franchisee operations amid a decline in earnings
Mr Buck apparently left instructions in his will to give 50 percent of the chain to a charitable foundation he and his wife set up in 1999.
The stipulation was announced by the Peter and Carmen Lucia Buck Foundation at the end of January, in a statement that claimed it had been in the works for more than a decade.
‘This gift will allow the foundation to greatly expand its philanthropic endeavours and impact many more lives,’ wrote Carrie Schindele, executive director of the Connecticut charity, which supports causes related to education and health care.
Buck – providing start-up funds of $1,000 – and DeLuca started the sandwich empire in 1965 with ‘Pete’s Super Submarines’ in Bridgeport, with the priciest sandwich selling for 69 cents
Buck and De Luca changed the name of their outlet after people listening to radio adverts they had made thought ‘Pete’s Submarines’ sounded like ‘Pizza Marines’
‘Especially our work to create educational opportunities for all students,’ said Schindele, ‘work Dr. Buck cared so deeply about.’
The charity, founded by Buck and the late Carmen Lucia Buck, provides services for elementary school students across the country as well as seniors in Danbury, where the couple lived for many years.
The firm also employs both of the couple’s sons, William and Christopher Buck, who serve as executives on its board.
The brothers, along with CFO Ben Benoit, are the sole executors of Buck’s estate.
Forbes confirmed the contents of Buck’s will in a report Friday, writing that they had obtained a copy.
The donation constitutes Buck’s full share of the $10billion company, which has been owned by its two founding families for nearly six decades.
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