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Sandwich Chain Subway May Be Sold, Gray Meat and All

Note: This article may contain commentary or the author's opinion.

The sandwich giant Subway is the subject of rumors about a potential sale, and the possible price is enormous. Fans of chewy bread, gray meat, wilted veggies and tasteless condiments may be getting their sandwiches from the same chain with new ownership.

Sandwich giant Subway confirmed Tuesday it is exploring a possible sale.

A deal could value the chain at more than $10 billion, according to an article last month from The Wall Street Journal, which first reported the company had hired advisors to explore a sale.

Subway said Tuesday that JPMorgan is advising the Connecticut-based company and will conduct the sale exploration process. The company didn’t outline any timing and cautioned the process may not result in a sale.

Ten billion is a lot of lettuce. Whether or not it is wilted and sometimes brown and slimy remains to be seen. The sub giant has had problems in recent years with a lack of quality, more competition, and some rather unflattering press including having no actual tuna in the tuna sub, and the pr nightmare that came with former pitch-man Jared Fogle, who was arrested and jailed for child porn several years ago. Despite this, Subway has managed to actually increase profitability by shuttering some stores and adding better products and ingredients to its menu. Imagine that!

Subway, which has over 37,000 restaurants in more than 100 countries, said earlier this month its same-store sales climbed 9.2% last year. Same-store sales at North American locations jumped 7.8% in 2022, Subway said, surpassing decade-old average weekly sales records.

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The company has reported eight consecutive quarters of sales growth, it said in a release earlier this month. Digital sales have more than tripled since 2019. The improvements mark a stark reversal after years of sales declines.

Subway is also operating in a smaller footprint: The company’s location count fell 22% from 2015 to 2021. It plans to remodel 3,600 North American locations and improve franchisee profitability this year, CNBC previously reported.

Subway is discovering what so many other places didn’t. Better ingredients, fewer locations, a streamlined menu and doing fewer things better rather than lots of things poorly will eventually lead to better sales. There is no shortage of competition in the sub game, but Subway is the most economical and perhaps most well know, even if many of us can’t get Jared Fogle’s pervy face out of our heads.

“The management team remains committed to the future and will continue to execute against its multi-year transformation journey, which includes a focus on menu innovation, modernization of restaurants and improvements to its overall guest experience,” Subway said in the release.

Subway could’ve taken its weird bread and suspicious meat and went the way of so many other chains that focus on expansion rather than quality, but it appears that they have saved their business. Whether that’s good for diners remains to be seen, but at least we don’t have to look at Jared anymore!