Roark Capital, the private equity group seeking to buy the Subway sandwich group, is prepared to offer additional incentives on top of its $9 billion offer to secure the country’s second-largest restaurant chain.

Reuters reported late Tuesday that Roark, which owns the Jimmy John’s sandwich chain, is reading to offer so-called ‘earn out’ incentives, based on the group’s post-sale performance, as part of its $9 billion-plus purchase of the Milford, Connecticut-based group, which has been owned by the families of its co-founders, Fred DeLuca and Peter Buck, for more than 50 years.

Roark’s bid, while under the original asking price of around $10 billion, still looks to top that from a consortium that includes Goldman Sachs’ private equity division as well as buyout group’s TDR Capital and Sycamore Partners. 

Subway unveiled plans to sell its business in February, following what it called a “record-setting year” in 2022 that ended with it “exceeding global sales projections and achieving eight consecutive quarters of positive same-store sales growth.”

The group is currently run by former Burger King CEO John Chidsey, who joined Subway in 2019 and immediately embarked on a turnaround plan that involved shuttering unprofitable restaurants and paring corporate staff.

Subway also revamped its menu to shorten customer wait times and launched aggressive new promotions, such as the Footlong Pass that costs $15 and gives holders 50% off its full-size sandwiches over the course of a month.

Subway operates around 21,000 restaurants in the U.S. — and 37,000 worldwide — and generates annual revenues in the region of $10 billion.

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