Blackstone Acquires Jersey Mike’s in $8 Billion Deal

Jersey Mike’s has secured an $8 billion deal that has the private equity firm, Blackstone, buying out the popular sandwich chain.

The Wall Street Journal reports that since early this year, Blackstone has been in intermittent negotiations for a merger with the sandwich restaurant based in Manasquan, New Jersey. Blackstone has a track record of funding franchises, which can profit from a brand’s expansion without needing a sizable upfront investment.

The firm’s most successful private equity real estate venture in history was its agreement with franchiser Hilton Hotels. The company also owns the coffee brand 7Brew and the franchise for cleaning and emergency restoration services, SERVPRO. Blackstone reached an agreement to purchase Tropical Smoothie Cafe, a smoothie franchise, in April.

The Jersey Mike’s deal was finalized on Tuesday, Nov. 19, and was formally announced in a Blackstone press release. Peter Cancro, the founder and CEO of Jersey Mike’s, will keep a sizeable stock position and continue to run the company as part of the agreement.

“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 base as it has scaled nationwide,” said Peter Wallace, a senior managing director at Blackstone, in a statement accompanying the press release. “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. I highly recommend the #13 Original Italian, Mike’s Way.”

The deal is expected to close in early 2025.

Jersey Mike’s Can Withstand the Competition

Earlier this year, the sandwich giant emerged as formidable competition against Subway, which had been facing controversy from its customers for its lackluster options and legal quagmires.

Jersey Mike’s prides itself on sliced-to-order meats and slower, more individualized service, in contrast to Subway’s assembly-line method. However, Subway did declare last year that it would begin using freshly sliced meats. The Jersey Mike’s dedication to using high-quality ingredients and making grilled-to-order sandwiches has won over discriminating customers looking for something different from fast-food norms.

Jersey Mike’s chief marketing officer, Rich Hope, highlighted the company’s focus on the needs of its customers. “Whether joining us in our restaurants or through our app or online, we want to ensure our customers have a seamless, authentic experience,” he said.