Firehouse Subs & the 3G deal that destroyed Burger King

Image copyright Getty Images Image caption Firehouse Subs took control of Potbelly after The Restaurant Group did the same to Popeyes Louisiana Kitchen in 2016 Burger-flavoured fast food restaurant Restaurant Brands has agreed to…

Firehouse Subs & the 3G deal that destroyed Burger King

Image copyright Getty Images Image caption Firehouse Subs took control of Potbelly after The Restaurant Group did the same to Popeyes Louisiana Kitchen in 2016

Burger-flavoured fast food restaurant Restaurant Brands has agreed to buy sandwich company Firehouse Subs for $1 billion (£723m).

It is part of a series of deals for Restaurant Brands, which now owns Popeyes Louisiana Kitchen.

As part of a separate deal, Restaurant Brands also announced plans to buy another sandwich chain, a Kentucky-based chain called RARE, for $100m.

Restaurant Brands’s first deal of the year came after it bought Popeyes Louisiana Kitchen for US$1.8bn, in October last year.

On Tuesday it said that Firehouse Subs had seen revenue grow more than 20% over the past year.

Image copyright Getty Images Image caption Restaurant Brands is owned by the 3G Capital private equity firm

“The acquisition of Firehouse Subs further expands our top-line growth potential, our scale in the emerging fast casual sandwich segment and our ability to aggressively go after share in this growing segment,” CEO Daniel Schwartz said.

Firehouse Subs will be added to Restaurant Brands’ portfolio of burger joint chains, which includes KFC, Pizza Hut and Tim Hortons.

The company has previously made shares available in some of its businesses for public trading through a so-called spin-off programme.

It has no plans for Firehouse Subs to become its own separate entity, but added that it is “actively exploring opportunities to grow the franchise business in the Midwest region over the long term”.

In a separate release on Tuesday, RARE, which provides sandwiches in Nashville, St Louis and Louisville, Kentucky, said that the acquisition would help the brand “reach new customers and expand nationally”.

Striking business deals

Restaurant Brands, which is owned by the 3G Capital private equity firm, was formed after Restaurant Brands bought Burger King in 2010 for $3.4bn.

3G Capital has a track record of turning around troubled businesses, and also bought sports franchises with the acquisition of soccer club New England Revolution in 2013 and baseball club the Cleveland Indians in 2014.

It has also made a name for itself by striking deals across the country, and it is running similar projects with Pizza Hut, Tim Hortons and Popeyes.

Recent deals include the purchase of sports shoe chain Finish Line and Brick House Tavern + Tap restaurant chain.

The company is headquartered in Toronto, Canada and has its head office and only a limited number of operational outposts in the United States.

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