Blackstone completes Jersey Mike’s Subs acquisition

A spokesperson for Manasquan, New Jersey-based sandwich chain Jersey Mike’s Subs told NJBIZ that Blackstone completed its acquisition of a majority stake in the company Jan. 16. They added the terms of the deal remain unchanged from the private equity behemoth’s November 2024 announcement.

Blackstone did not immediately respond to a request for more information. Financials have not been disclosed, but the transaction was reportedly valued at $8 billion.

Since its start in 1956 as a small sandwich shop in Point Pleasant, Jersey Mike’s has expanded to more than 3,100 locations in the U.S. and Canada.

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.

Going forward, Jersey Mike’s founder and CEO Peter Cancro will maintain “a significant equity stake” and continue to lead the business, Blackstone has said. Cancro’s involvement with the brand dates back to when he was 14 and worked at the original shop. He acquired that store in 1975, when he was 17, using a loan from his high school football coach. Jersey Mike’s began franchising 12 years later.

Just getting started

In a statement last fall, 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.”

During a November 2023 interview with QSR Magazine, Cancro said the chain expected to open 350 more locations in 2024 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 10-15 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.

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

When the planned acquisition was announced, Peter Wallace, a senior managing director at Blackstone, said, “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 hot sandwich

Reports first surfaced last spring that Jersey Mike’s was exploring a deal with Blackstone valued at around $8 billion but that negotiations cooled off.

Discussions began after Cancro took note of the sky-high valuations Wall Street gave other restaurant brands, like Mediterranean fast casual Cava ($4.7 billion). Private equity firms have also scooped up 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 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 more than $113 million for local organizations through its Month of Giving campaign. It also launched the Coach Rod Smith Ownership program. That initiative helps provide store-level managers greater opportunities to become Jersey Mike’s franchise owners.