The auction for Subway continues as potential bidders, including private equity, conduct due diligence on the sandwich chain. Subway is one of the few restaurant businesses in an active sale process as the industry continues to face an uncertain operating environment.
Capital markets partner Craig Marcus told Axios that, “the economics of a fast-food or quick-service chain are attractive to sponsors. It's a classic PE investment opportunity in the sense that it's cash-flow positive, low CapEx, [and] you can easily lever the business.”
“Because of the franchise model, the business wouldn’t get all the revenues — but it would get royalties, which are pretty predictable,” he added.
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