Sandwich giant Subway is looking to sell.
The privately held chain restaurant has retained advisers to explore a potential sale, according to the Wall Street Journal.
The process is in the early stages, and the company is expected to attract corporate buyers and private equity firms in a deal that could fetch more than $10 billion.
“As a privately held company, we don’t comment on ownership structure and business plans,” Subway said. “We continue to be focused on moving the brand forward with our transformational journey to help our franchisees be successful and profitable.”
Subway, the biggest restaurant chain in the United States by number of locations, has been owned by its two founding families for more than 50 years.
The restaurant’s 21,000 U.S. locations saw $9.4 billion in sales in 2021. Worldwide, Subway — also one of the world’s largest restaurant chains — had around 37,000 stores as of 2021.
Despite its aggressive growth, Subway has struggled in recent years after its brand took several hits.
Sales peaked at $18 billion in 2012 and then declined for years after, according to the Wall Street Journal.
Subway was co-founded by Fred DeLuca and Peter Buck in Bridgeport, Connecticut, in 1965.
Current CEO John Chidsey is the first to lead the company from outside the company’s original founding families. He took the reins in 2019 and has since closed locations and restructured company operations to focus on Subway’s menu and food quality.
Chidsey said he expects U.S. locations to level off while the company focuses more on international expansion. The number of Subway stores has declined steadily in the U.S. since 2015, according to Statista.
In October, Subway said same-store sales increased by 8.4% in the third quarter compared to the same period in 2021. The uptick is due to menu changes, renovated restaurants, and improved online ordering.
A deal for Subway would help boost a struggling mergers and acquisitions environment that persistent fears of a recession have impacted. Deal volume fell to $3.5 trillion in 2022, down from $5 trillion in 2021 according to Bloomberg Law.
With rising interest rates, banks have pulled back their lending, forcing private equity firms to look to private lenders as sources of capital for deals. Their ability to finance large transactions is limited, reported the Wall Street Journal.