A Quebec firm gathering ownership of restaurant chains best known to patrons of shopping-centre food courts has gone outside the mall for its biggest takeover bid yet.
Montreal-based MTY Food Group, the owner or Canada-wide licensee of over 25 quick-service brands such as TacoTime, Yogen Fruz, TCBY, Country Style, Vanelli’s and Thai Express, on Thursday announced a cash deal to buy the assets of Mr. Submarine Ltd. for $23 million.
The deal, expected to close by the end of October, would make MTY the franchisor for about 335 Mr. Sub outlets across Canada, now operating under franchise or operator agreements, with system-wide sales of over $100 million in fiscal 2011.
“The Mr. Sub transaction represents a very significant addition to MTY’s network and is the largest acquisition by the company as of today,” MTY said in a release.
The acquisition is “expected to strengthen the company’s leadership in the quick service restaurant industry in Canada by reaching a new category of customers while complementing the offering to our current customer base through our existing banners.”
About 80 per cent of the Mr. Sub chain’s restaurants are in Ontario, with the rest spread across six other provinces, MTY said.
About three of every four Mr. Sub outlets are also street-front locations, meaning the deal would also “reinforce MTY’s presence on the street,” the company said.
Toronto-based Mr. Sub, which started with one restaurant in that city’s Yorkville Avenue area in 1968 and has been selling franchises since 1972, markets itself to franchisees as allowing sandwich-shop owners to “take advantage of Mr. Sub’s group buying power.”
In the “Success stories” section of its site, Mr. Sub describes the experience of an independent Toronto sub shop owner who, before becoming a Mr. Sub franchisee in 2000, “used to buy big blocks of meat and slice them every day — a tedious and time-consuming process.”
That franchisee now “gets all his ingredients — right down to the lettuce — pre-cut from the central distributor.”
The Mr. Sub deal is expected to bring MTY’s total quick-service network to over 2,070 outlets.