Blackstone, the asset management firm, made an announcement on Tuesday regarding its acquisition of sandwich chain Jersey Mike's Subs. The majority ownership stake will be purchased by Blackstone's "most recent flagship private equity vehicle" and other funds it manages, with the aim of completing the purchase early next year. The deal values Jersey Mike's at around $8 billion, including debt.
Jersey Mike's, known for its submarine sandwiches, currently operates over 2,800 sandwich shops, with nearly 300 more locations "coming soon." Blackstone stated that the partnership is intended to help Jersey Mike's accelerate its expansion both within and beyond the U.S. market, as well as invest in technology and digital transformation.
Jersey Mike's CEO, Peter Cancro, expressed his belief that the partnership with Blackstone will enable the sandwich chain to reach greater heights. Cancro will continue to lead the company and maintain a significant equity stake.
Blackstone's investment in Jersey Mike's is part of their strategy to accelerate the growth of high-growth franchise businesses. Other franchise investments by Blackstone include Tropical Smoothie Cafe and 7 Brew Coffee. It is noted that Subway, one of Jersey Mike's competitors, was recently purchased by Roark Capital in a deal earlier this year.
For traditional Jersey Mike's locations, the average unit volume is $1.3 million, according to the chain's website. Overall, the acquisition of Jersey Mike's by Blackstone represents a significant move in the franchise business space, with the potential for continued growth and expansion in the future.