Blackstone enters $8B deal for fast-casual giant Jersey Mike's Subs

Blackstone is expanding its reach into the potentially lucrative world of restaurant franchising with a majority stake in one of the strongest players in the fast-casual business.

The private equity giant has revealed plans for a majority acquisition of Jersey Mike’s Subs in a deal valuing the sandwich empire at approximately $8 billion, including debt.

The transaction, first reported by the Wall Street Journal, is expected to close in early 2025.

Jersey Mike’s, known for its submarine style sandwiches, has grown into one of the largest fast-casual chains in the US with over 3,000 locations nationwide. Founded in 1956 as Mike’s Subs in Point Pleasant, New Jersey, the brand was purchased in 1975 by Peter Cancro, who began franchising the business in the late 1980s and remains CEO of the company.

Blackstone’s track record as a PE backer in the franchise sector includes past investments in Hilton Hotels, Servpro, and other well-known brands.

“We believe we are still in the early innings of Jersey Mike's growth story and that Blackstone is the right partner to help us reach even greater heights,” Cancro said in a statement. He will retain an equity stake in the company and continue leading its operations.

The deal involving the sandwich superchain comes amid a broader trend of private equity interest in franchise operations, which represent attractive targets for deep-pocketed investors with their steady cash flows and potential for expansion.

Blackstone, which stands at the top of the global alternative asset management food chain with more than $1 trillion in assets, has been busy snapping up stakes in the food franchise space this year, acquiring Tropical Smoothie Cafe in April and investing in 7 Brew Coffee in February.

Jersey Mike’s is currently the second-largest sandwich chain in the US by sales, trailing Subway, which was acquired by Roark Capital for $9.6 billion in 2022. Industry experts have pointed to ongoing consolidation in the restaurant sector as private equity firms look to capitalize on opportunities for growth.

“Blackstone has helped drive the success of some of the most iconic franchise businesses globally, and we look forward to working with them to help make significant new investments going forward,” Cancro added.

The acquisition reflects the broader trend of franchise operators attracting interest from institutional investors. In recent years, major deals have included Inspire Brands’ acquisition of Jimmy John’s in 2019 and Restaurant Brands International’s $1 billion purchase of its largest Burger King franchisee earlier this year.