Fast-food restaurant business Subway is exploring a potential sale that would value the business at more than USD$10 billion, according to a report shared by The Wall Street Journal.

Although the process is in its early stages, sources say the sale could attract corporate buyers and other private-equity firms. There is no guarantee a sale will proceed

“As a privately held company, we don’t comment on ownership structure and business plans,” a company spokesperson told Reuters.

Neil Saunders, MD at GlobalData, described Subway as a chain with good prospects even amid a slowing economy.

“Although it was hit by the pandemic, Subway has since recovered strongly – growing both overall and same-store sales. Much of this is down to a program of reinvigoration that has encompassed menu enhancements, remodelling stores, and creating a better digital experience,” he said.

“The optimistic outlook is one of the reasons Subway sees this as a reasonable time to explore a sale and why it is likely to attract a significant amount of interest. This is especially so because the international nature of Subway, which is in more than 100 countries, potentially widens the field of suitors.”

However, one barrier to a sale may come from securing the finance, which would be significant for a business valued at around $10 billion, potentially ruling out bidders such as private equity.

“While Subway is clearly interested in doing a deal, it is in no particular hurry and will likely be relaxed if nothing comes of its explorations. This means buyers will need to pay full price to get any transaction over the line.”

Founded in 1965 by Fred DeLuca and Dr Peter Buck, the company has become one of the world’s largest quick-service restaurant brands operating more than 37,000 restaurants in over 100 countries.

In 2019, John Chidsey took over operations as CEO bringing major changes to the management, revamping its menu, renovating restaurants and improving its online ordering systems to attract customers.

In October last year, its same-store sales rose 8.4 per cent in its third quarter compared with the same period in 2021. 

• Further reading: Subway plans to double its Asia Pacific store count within five years.