Can You Invest in Subway Stock?

Subway is the largest restaurant chain in the world, with over 41,000 locations, so there is a good reason why investors would like to invest in Subway stock. The explosive growth of the company is associated with its low franchise fees. Additionally, most of the locations have a lower average sqm per store, especially when compared with the largest restaurant chains. These are the main reasons for the fast growth of the company. 

This has led the company to be the fastest-growing franchise over the past. With over 400,000 employees around the world, Subway delivers meals to thousands upon thousands of people daily. It generated over $16 billion in revenues during 2019.

Subway history

Founded in 1965, under the name “Pete’s Super Submarines”. Fred DeLuca founded the company at just 17 years of age, with help from his mom and Peter Buck who financed the company bearing his own name. It wasn’t until 1968 that the company was renamed Subway. Following the popularity of its sandwiches, Peter decided to franchise the concept in 1974. 

It wasn’t until the 21st century, that the company began its explosive growth. Since the cost of opening a Subway franchise is considerably lower when compared with other restaurant chains, it become a great solution for entrepreneurs, looking for an established brand. For several years, Subway has remained among the best global franchises, and it has been named the fastest-growing franchise in several instances.

Can you buy Subway stock?

Subway is a privately held company, and therefore there is no way to invest in it. However, this does not necessarily mean that we will never see a Subway stock IPO. In fact, there are several scenarios under which take the company public would make sense. 

Will investors ever be able to invest in Subway stock?

There are only two scenarios where we could see a Subway stock IPO. One of them is if the company is unable to raise capital through debt, which could push the current owner to seek capital in financial markets. This seems unlikely given the way the company is set up, and the growth it has seen over the past. However, this possibility should be discarded completely, at least not in the medium to long term.

There is also another scenario in which the owner, could find himself in financial trouble and seek capital. This would certainly push the company to go public and we could see a Subway stock IPO. However, this seems like a very unlikely possibility. For that to happen the company would have to be scrutinized in a different way, and its financial information would forcefully have to be public.

Although both scenarios are extremely unlikely, it is not within the realm of possibility. There is another consideration that could also push the company to go public. If the company was to find itself in financial trouble, that could also force a Subway stock IPO. Over the last years, revenue has declined but Subway decided to make some important changes that seem to be working.

Improved financial performance 

Subway has always marketed its products as fresh, and this resonates a lot with what consumers want now. This is one of the reasons the company’s results continue to improve drastically. In 2021, the company modified its menu, and customers responded positively. Increasing sales to record levels.

The company has been forced to close some of its locations during 2019, and 2020. However, since it changed the menu, Subway seems to be improving its financial performance.

Who owns Subway?

Subway’s parent company is Doctor’s Associates, Inc. The name has nothing to do, with what they actually do, but it is the company that was set up by Fred DeLuca to be the holding company of Subway. Doctor’s Associates, Inc. was owned by Fred DeLuca until he eventually passed away in 2015. 

Since then the ownership of the company was inherited by John DeLuca, his son. Nearly half of all of the locations are actually owned by Subway. The company also collects additional royalties from its franchisees.

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