What Changed After Roark Capital's $9.6 Billion Subway Acquisition

When Roark Capital completed its acquisition of Subway in April 2024, it marked the largest franchise deal in restaurant history. Not the widely misreported $20 billion figure that circulated early in negotiations, but $9.6 billion - still massive by any measure. The real question for operators and investors: what actually changed?

The answer is more closures, higher unit volumes, and a franchise system still bleeding locations while trying to convince itself the worst is over.

The Deal Behind the Headlines

Roark Capital, the Atlanta-based private equity firm with a restaurant empire that includes Arby's, Jimmy John's, Buffalo Wild Wings, and Dunkin', closed the Subway acquisition after nearly a year of negotiations and regulatory review. The FTC cleared the deal in August 2024 despite concerns about Roark's growing concentration of franchise power.

For Subway's founding family, the DeLuca estate, it was an exit after decades of sliding market share and franchisee unrest. For Roark, it was a bet that operational discipline and capital investment could stabilize a brand that had closed 7,000 locations since 2015.

The new leadership team - CEO Jonathan Fitzpatrick and Damien Harmon, president of Subway North America - inherited a system in managed decline. Average unit volumes had climbed to $490,000 by 2023, an all-time high for Subway. But that number reflected closures of underperforming stores more than genuine sales growth.

Store Count: Still Falling

Subway closed more than 400 U.S. restaurants in 2023, the year before the sale closed. In 2024, under Roark's ownership, that number accelerated to over 600 domestic closures. The chain dropped below 20,000 U.S. locations for the first time in 20 years.

That's not a turnaround. That's triage.

Roark's playbook - seen at Dunkin', Arby's, and across its portfolio - typically involves pruning weak units, investing in remaining stores, and consolidating franchisees into larger, better-capitalized operators. The closure rate suggests that strategy is in full effect. Subway's franchise disclosure documents show the company is "closely evaluating its US footprint using a strategic, data-driven approach" to ensure restaurants are in the right locations with the right operators.

Translation: more closures coming.

Franchisee Pushback

The first major friction point under Roark came fast. In early 2026, Subway launched a high-profile "Free Footlong" promotion - any footlong, no restrictions, no purchase required. It was the kind of aggressive value play Roark brands like Arby's have used successfully.

Franchisees revolted.

The North American Subway Franchisee Association (NASFA) publicly pushed back, complaining about the lack of restrictions and the hit to unit economics. Giving away premium subs like the Ultimate Steak with no guardrails crushed margins. Operators who had just weathered years of closures and rising food costs weren't interested in funding brand-building stunts with their own cash.

Roark pulled back and worked with NASFA to modify future promotions. But the episode revealed a tension that's going to define Subway's next phase: Roark wants growth and buzz. Franchisees want profitability and predictability. Those goals don't always align.

What Roark Is Actually Doing

Beyond closures and promotions, Roark has put capital into store redesigns, equipment upgrades, and digital ordering infrastructure. Subway had lagged competitors in mobile ordering, delivery integration, and loyalty programs. Roark is trying to drag the brand into 2025.

The company is also shifting to multi-unit franchisees. Single-store operators - the backbone of Subway's early growth - are being phased out in favor of larger groups with deeper pockets and professional management. It's the same consolidation wave that's reshaped the entire franchise industry over the past decade.

And internationally, Subway is pushing expansion. The brand still has global appeal in markets where it's less saturated. But in the U.S., the network is still contracting.

Unit Economics: Better, But Fragile

Subway's $490,000 average unit volume in 2023 was its highest ever. That sounds good until you compare it to peers. Domino's does over $1.2 million. Jimmy John's, another Roark brand, does around $1.1 million. Even Subway's direct sandwich competitor, Jersey Mike's, is reportedly north of $1.3 million.

Subway's AUV gains came from closing the weakest 7,000 stores over nine years. What's left is a smaller, slightly healthier network. But the closures haven't stopped, and the revenue base keeps shrinking.

For investors and prospective franchisees, the question is whether Roark can stabilize the count, grow same-store sales, and push unit volumes high enough to make new stores economically attractive again. Right now, the data says no.

Franchisee Sentiment: Cautious at Best

A 23-unit Subway franchisee shut down operations entirely in August 2024, just months after the Roark deal closed. That's not a vote of confidence. Multi-unit operators don't walk away from working businesses unless the future looks worse than the exit costs.

Subway's franchise base is older, undercapitalized, and exhausted. Many operators bought in during the brand's peak and have been managing decline ever since. Roark is betting it can attract a new generation of multi-unit operators with capital and operational chops. But those operators have options - and most of them look better than Subway right now.

The Biggest Franchise Deal Ever. Now What?

Roark Capital paid $9.6 billion for a brand with 37,000 global locations, deep name recognition, and structural problems it hasn't solved in a decade. The first 18 months of ownership have brought more closures, franchisee friction, and incremental improvements to operations and marketing.

That's not a turnaround. It's the beginning of a very long repositioning.

Subway's AUVs are rising because weak stores are dying. Same-store sales aren't growing fast enough to offset closures. Franchisee profitability is better than it was, but still fragile. And the brand's relevance in a market dominated by digital-first, value-driven, and experience-led competitors is an open question.

For Roark, the bet is that operational discipline, capital investment, and multi-unit consolidation can stabilize Subway and return it to growth. For franchisees, the bet is whether they can survive long enough to see it happen.

Right now, the only certainty is more closures.