Dive Brief:
- Jersey Mike’s is reportedly seeking a sale that could be worth $8 billion, according to The Wall Street Journal, which cited people familiar with the matter.
- The company has been in “on-and-off discussions” with Blackstone, but those talks have supposedly cooled, the publication reports. The chain could still pursue a deal with the private equity firm or another company, or it could choose not to go through with a sale at all, per The Journal.
- Sandwich chains are garnering significant sale value. For example, Roark agreed to buy Subway last year for $9.6 billion. Inspire bought Jimmy John’s in 2019, but a purchase price was not disclosed.
Dive Insight:
Jersey Mike’s strong balance sheet and growth trajectory could make it an attractive buy. Jersey Mike’s average unit volume for franchised restaurants was $1.3 million in 2023, up from $1.2 million in the previous year, according to the chain’s 2024 franchise disclosure document.
At the end of 2023, the chain had 2,675 units, of which 2,647 were franchised. The chain has been adding over 250 units annually for the past three years. The Wall Street Journal reported that the chain could reach 4,000 locations and $6.5 billion in sales by 2027.
In January, the company made its first international move, signing an area director and development agreement with Redberry Restaurants to develop 300 Jersey Mike’s in Canada by 2034.
Jersey Mike’s is also excelling in carryout, topping the charts for fast casual chains at the end of Q2 2023, per research by Technomic reported by Nation’s Restaurant News. In 2020, the chain began undergoing systemwide remodels that included tablet ordering devices and customer-facing kiosks. The company continues to lean into technology and partnered with SoundHound earlier this year to test artificial intelligence voice ordering for phone calls.
2024 is turning out to be a very active year for buyers and sellers in the restaurant space and several chains are rumored to be considering sales, including Bob Evans, Tropical Smoothie Cafe and CEC Entertainment. Flynn Restaurant Group is also reportedly seeking to sell a $5 billion majority stake. Deals expected to go through this year include Restaurant Brands International’s $1 billion buyout of its largest franchisee Carrols Restaurant Group and One Group Hospitality’s $365 million purchase of Benihana’s parent group. Punch Bowl Social also bought two eatertainment concepts to expand its portfolio.
A Jersey Mike’s spokesperson did not respond to a request for comment by press time.
