By Brett Bundale, The Canadian Press November 15, 2021.
José Cil first tried out the Firehouse Subs while touring Florida as a Walmart executive.
“I’ve been fortunate enough to tour most of the state,” said Cil, now CEO of Restaurant Brands International Inc. “I used to go to Firehouse Subs for lunch a lot. It was one of the favorites of the Walmart team.
Fast forward more than a decade to the end of summer 2021. Cil has learned that the founders of Firehouse Subs – brothers and former firefighters Chris and Robin Sorensen – will consider selling if they find the right partner.
Cil knew the sandwich chain would complement Restaurant Brands’ existing portfolio of Tim Hortons, Burger King and Popeyes.
It also came with substantial long-term growth potential, a compelling unit economy for franchisees and a strong management team, he said.
“It all meant a lot to us,” Cil said. “Everything went very well and we finished all the details last night. “
Restaurant Brands on Monday announced plans to buy Firehouse Subs for US $ 1 billion.
The company said the US-based restaurant, which has hot specialty subs on its menu, is a strong and growing player in the fast food industry.
Firehouse Subs was founded in Jacksonville, Florida in 1994 by the Sorensen Fire Brothers.
The sandwich chain has tripled its restaurant footprint to approximately 1,200 locations since 2010. During the same period, its system-wide sales have quadrupled to an estimated US $ 1.1 billion for 2021, according to Restaurant. Brands.
Yet as it seeks to expand, Firehouse Sub faces stiff competition from rivals like Subway and Mr. Sub, owned by MTY Food Group Inc. of Montreal.
But Don Fox, CEO of Firehouse Subs, said there are several “key differentiators” that give Firehouse Subs an edge over its competition.
“We specialize in hot submarines and we use a very unique process that none of our other major rivals use,” he said in an interview. “We use steam to heat the meat and cheese and it does some wonderful things with the flavor profile. “
The portion sizes also set the restaurant apart, he said.
“We use a quarter of a pound of protein on our medium subs and a half of a pound of protein on the large subs,” Fox said.
The company’s locations are primarily located in suburban areas, which has helped Firehouse Subs recover from pandemic restrictions faster than restaurants which are more heavily concentrated in downtown areas and rely on office workers, a- he declared.
Meanwhile, Restaurant Brands said Firehouse Subs benefits from a “strong family of franchisees” who own and operate 97% of the brand’s restaurants in 46 US states, Canada and Puerto Rico.
“It’s a differentiated, goal-driven brand with great products and a great leadership team and we believe we have a tremendous opportunity for growth,” said Cil.
The cash deal is expected to close in the coming months, pending the satisfaction of customary closing conditions and regulatory approvals, according to the company’s filing with the U.S. Securities and Exchange Commission.
Restaurant Brands said it plans to fund the acquisition with a combination of cash and debt.
Companies in this story: (TSX: QSR, TSX: QSP)