RBI, which operates the Tim Hortons, Burger King and Popeyes chains, announced Monday that it will acquire the U.S.-based sandwich company in an all-cash transaction. The company says the acquisition "adds a strong and loved restaurant brand with attractive unit economics in a complementary category to RBI's existing family of iconic quick service restaurant brands."
Shares of RBI were trading up 1.2 per cent on the TSX as of 10:10 a.m. ET.
Firehouse Subs was founded in Jacksonville, Fla. in 1994 by brothers and former firefighters Chris Sorensen and Robin Sorensen. Since 2010 the brand has expanded, tripling its restaurant count to approximately 1,200 locations in the U.S., Canada and Puerto Rico. RBI says system-wide sales have quadrupled in the last decade and are expected to hit US$1.1 billion in 2021.
In a statement, RBI chief executive Jose Cil says the Firehouse Subs brand, its team and community focus "closely align with our core values at RBI."
"We see tremendous potential to accelerate U.S. and international growth at Firehouse Subs with RBI's development expertise, global franchisee network and digital capabilities," Cil said.
Firehouse Subs' existing management team will continue to lead the day-to-day operations at the brand once the deal closes, RBI says. It expects the acquisition will be finalized "in the coming months" pending regulatory approvals.
RBI says it sees "significant unit growth potential" with Firehouse Subs, which it calls "a strong and growing player" within the US$30 billion fast-food sandwich market.
"Firehouse Subs has a proven, successful model with the opportunity to grow significantly across the U.S. and internationally," RBI said in a statement.
"The brand's already strong growth prospects are expected to be further enhanced by RBI's robust franchisee network, development expertise and ability to accelerate global unit growth, increase overall brand awareness, and drive further improvements in unit economics, all of which will create a reinforcing cycle of growth."
RBI is one of the world's largest fast food companies, with more than 27,000 restaurants located in more than 100 countries. The Toronto-based company plans to increase its overall restaurant count – mostly through Burger King expansion – to more than 40,000 by 2030. Firehouse Subs currently operates more than 50 locations in Ontario.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.