After nearly seven decades as an independent business, Jersey Mike’s Subs plans to sell a majority stake to private equity giant Blackstone.

As part of the deal announced Nov. 19, the Manasquan-based sandwich chain’s founder and CEO, Peter Cancro, will maintain “a significant equity stake” and continue to lead the business.

Financial terms were not disclosed, but the transaction is reportedly valued at $8 billion, sources familiar with the matter told CNN.

The deal is expected to close in early 2025, Blackstone said.

The influx of cash will help the fast-growing franchise “accelerate its expansion across and beyond the U.S. market, as well as its continued investment in technology and digital transformation,” according to Blackstone.

Other brands in the firm’s portfolio include Tropical Smoothie Café, 7Brew, Hilton Hotels and Servpro.

Humble beginnings

Since its start in 1956 as a small sandwich shop in Point Pleasant, Jersey Mike’s has grown to more than 3,000 locations in the U.S. and Canada.

In a statement, Cancro said, “We believe we are still in the early innings of Jersey Mike’s growth story and that Blackstone is the right partner to help us reach even greater heights. Blackstone has helped drive the success of some of the most iconic franchise businesses globally and we look forward to working with them to help make significant new investments going forward.”

Cancro has been involved with the brand since he was 14, working at the original shop. He acquired the shop in 1975, when he was 17, using a loan from his high school football coach. Jersey Mike’s began franchising 12 years later.

Peter Wallace, a senior managing director at Blackstone, commented, “Jersey Mike’s has grown for more than half a century by maintaining an unrelenting focus on quality and delicious sandwiches – consistently building on its loyal customer based as it has scaled nationwide.”

He went on to say, “Blackstone has deep experience helping accelerate the expansion of high-growth franchise businesses and this area is one of our highest-conviction investment themes. We are excited to partner with an entrepreneur of Peter’s caliber and the talented Jersey Mike’s team. Our capital and resources will help support key investments in growth and technology for the benefit of Jersey Mike’s customers and exceptional franchisees.”

A sandwich shop trend?

Earlier this year, The Wall Street Journal reported that Jersey Mike’s was exploring a deal with Blackstone valued at around $8 billion but that negotiations cooled off. 

Trade publication Restaurant Business Magazine noted that Cancro said in 2023 he was mulling a sale after noticing the sky-high valuations Wall Street gave other restaurant brands, like Mediterranean fast casual Cava ($4.7 billion).

Since 2019, private equity firms have acquired two other big names in the sandwich space. Subway and Jimmy John’s sold in deals worth $9.6 billion and $2.3 billion, respectively.

Even if his business was sold, Cancro also told Restaurant Business he would want to remain active in the company, particularly with the brand’s many charitable activities.

Since 2011, Jersey Mike’s has raised over $113 million for local organizations through its Month of Giving campaign. It has also launched the Coach Rod Smith Ownership program, which helps provide store-level managers greater opportunities to become Jersey Mike’s franchise owners.

Over the past year and a half, Cancro and company hit several other milestones.

Three Jersey Mike’s outposts launched in Alaska, giving it a presence in all 50 states. The company also kicked off 2024 with plans to go international through an agreement with one of Canada’s largest restaurant operators. By 2034, Jersey Mike’s expects to have 300 shops open across that country.

Last fall, Cancro told QSR Magazine the chain expects to open 350 more locations this year as well as in 2025. By 2026, he anticipates between 400 to 450 openings. After that, Cancro sees settling into a cadence of about 15% annual unit growth, or roughly 10 to 15 openings per week.

Ultimately, Cancro believes 10,000 units is an achievable goal due to the brand’s focus on quality, training and its robust franchisee support system.