TORONTO – Restaurant Brands International Inc. (RBI), parent company of Burger King, Popeyes and Tim Hortons, expects to add sub sandwiches to its portfolio in the coming months with the acquisition of Firehouse Subs in a $1 billion all-cash transaction. The deal is subject to customary closing conditions and regulatory approvals.
Firehouse Subs will remain based in Jacksonville and will continue to be managed by Don Fox, chief executive officer, and chief financial officer, Vincent Burchianti.
RBI said Firehouse Subs offers significant long-term unit growth potential and expects the transaction will immediately add to RBI’s diluted net earnings per share. RBI plans to fund the transaction using a combination of cash on hand and debt.
Brothers and former firefighters Chris Sorensen and Robin Sorensen founded Firehouse Subs in Jacksonville, Fla., in 1994. Since then, the brand has grown its footprint in the $30 billion US quick-service restaurant category. The brand has increased its number of restaurants three-fold to 1,200 units. System-wide sales are expected to total $1.1 billion for 2021; October year-to-date US comparable sales of 20% over 2019.
Franchisees own and operate 97% of the brand’s restaurants across 46 states, Canada and Puerto Rico. Firehouse Subs is expected to generate roughly $50 million of 2021 adjusted EBITDA.
“Firehouse Subs is a special brand with a talented team, impressive culture and community focus that resonates with guests and closely aligns with our core values at RBI,” said José Cil, CEO of RBI. “We see tremendous potential to accelerate US and international growth at Firehouse Subs with RBI’s development expertise, global franchisee network and digital capabilities. We are excited to welcome the Firehouse Subs team to the RBI family and to continue our ambitious dream of building the world’s most loved restaurant brands.”
The brand brings digital expansion opportunities to RBI with a mobile app including mobile order and pay and loyalty capabilities, in addition to a strong delivery sales mix. The brand’s loyalty program has nearly 3.5 million subscribers, enrolling approximately 50,000 additional customers per month and representing more than 10% of transactions. RBI said the acquisition would augment Firehouse Subs’ capabilities by leveraging RBI’s in-house tech capabilities, engineers and continued investments in digital and technology to accelerate the brand’s digital transition.
Firehouse Subs also is rooted in public service through the non-profit Firehouse Subs Public Safety Foundation. Firehouse Subs funds a portion of the annual operating costs for the foundation, which provides equipment and other resources to first responders and public safety organizations.
“At Firehouse Subs we are united in our commitment to and passion for hearty and flavorful food, heartfelt service, and public safety,” Fox said. “Joining the RBI family of brands provides an energizing opportunity to assist more communities, not only across America and Canada, but around the globe. The donations we generate for our Foundation through our restaurants means changing and saving lives, so we can’t wait to accelerate our journey at home and around the world.”