Restaurant Brands International is buying Firehouse Subs for $1B

The owner of Burger King and Popeyes is adding the rapidly growing sandwich chain, citing its “long-term growth opportunity.”
RBI Firehouse Subs
Photograph: Shutterstock

Restaurant Brands International on Monday said it is buying the sandwich chain Firehouse Subs for $1 billion in cash.

The deal will give RBI, the owner of Burger King, Popeyes and Tim Hortons, another growth vehicle. Firehouse was founded in 1994 by brothers and former firefighters Chris and Robin Sorensen. The company has grown steadily over the years, averaging system sales growth of nearly 6% a year since 2015, according to data from Restaurant Business sister company Technomic.

Firehouse currently has nearly 1,200 locations in 46 states and is expected to generate $1.1 billion in system sales this year. Same-store sales are up 20% over 2019 year to date and the brand is expected to generate $50 million in adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, this year.

The brand’s loyalty program has 3.5 million subscribers who represent more than 10% of the chain’s transactions.

It is the first acquisition for the Toronto-based brand operator since the owner of Burger King and Tim Hortons acquired Popeyes in 2017.

José Cil, CEO of RBI, believes Firehouse has strong growth potential around the globe. “We see tremendous potential to accelerate U.S. and international growth at Firehouse Subs with RBI’s development expertise, global franchise network and digital capabilities,” he said.

The sale is expected to close in the “coming months,” RBI said. Firehouse Subs will remain based in Jacksonville after the deal is complete and be managed by CEO Don Fox and CFO Vincent Burchianti.

“Joining the RBI family of brands provides an energizing opportunity to assist more communities, not only across America but around the globe,” Fox said in a statement.

RBI had long been rumored to be eyeing a sandwich chain, though much of the speculation had focused on the giant Subway. Firehouse, which is 97% franchised, is a clearer growth vehicle that will not have the revitalization work Subway requires.

The deal now gives RBI a sandwich brand to go along with its burger, chicken and coffee concepts and continues the industry’s broad push toward consolidation.

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