Restaurant Brands International

Restaurant Brands International makes first acquisition since 2017

Toronto-based Restaurant Brands International is buying sandwich chain Firehouse Subs for over $1 billion in its first acquisition since it brought Popeyes on board in 2017.

The deal will give the company, already the owner of Burger King and Tim Hortons in addition to Popeyes, another growth vehicle.

Firehouse was founded in 1994 by brothers and former firefighters Chris and Robin Sorensen and has grown steadily over the years, averaging system sales growth of nearly six per cent per year since 2015, according to Technomic.

There are currently 47 Firehouse Subs in Canada, the first of which opened 2015 in Ontario. Firehouse also has nearly 1,200 locations in 46 U.S. states, having trebled its unit count since 2010. It is expected to generate US$1.1 billion in system sales this year. Same-store sales are up 20 per cent over 2019 year-to-date.

The brand’s loyalty program also has 3.5 million subscribers who represent more than 10 per cent of the chain’s transactions, and is growing at a rate 50,000 users per month.

José Cil, CEO of Restaurant Brands International, called Firehouse “a great product” and “a compelling business”.

“The secret, usually, going forward is, in addition to having [great operations and standards] in place, you have got to find good partners. And then you have to have a really strong team locally to be able to drive it forward. And we’ve seen it work really well in Canada.”

The sale is expected to close in the coming months.

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RBI had long been rumoured to be eyeing a sandwich chain, though much of the speculation had focused on the giant Subway. However, the company settled on Firehouse, which is 97 per cent franchised.

The deal now gives RBI a sandwich brand to go along with its burger, chicken, and coffee concepts.

Meanwhile, Burger King is expanding significantly in Canada through a growing partnership with Redberry Restaurants. 50 new Burger King restaurants are under development in Quebec with another 15 in Saskatchewan over the next five years, and an additional 60 are scheduled for remodelling.

Redberry currently owns and operates 16 Burger King restaurants in Quebec, and more than 102 locations across Ontario and Manitoba. 

Image: Dcawton