Subway is putting the squeeze on its franchise owners to shore up sales and profits as the struggling sandwich giant attempts to reel in a buyer, The Post has learned.
The nation’s largest fast-food chain is pitching private equity firms on a prospective sale by showing them revenue and earnings that imply the company could be worth more than $8 billion, two sources with direct knowledge of the process said.
Privately owned Subway claims last year it had between $650 million and $750 million in Ebitda, or earnings before interest, taxes, depreciation, and amortization, sources close to the talks said. Accordingly, bids are expected to come in between 10 and 12 times that, resulting in a price tag of $7 billion to $8.4 billion, one source said.
To make its numbers, however, sources say Subway has meanwhile begun forcing owners to foot the bill for expensive store upgrades, even as it has begun to scrap fees for prospective owners. The chain is also clamping down on those who are looking to close money-losing locations.