Perhaps you’ve seen the commercials. Danny DeVito, America’s favorite diminutive great uncle, at Jersey Mike’s, nodding, working behind the counter, canoodling with customers, or carrying a backpack with a huge nose attachment to “capture the smells” of the sandwich chain. That chain, by the way, just got acquired by private equity firm Blackstone for $8 billion. Will he get a piece?
For a long time, Jersey Mike’s was the anti-Subway. It had a grill whereas Subway just had a boring ol’ “sandwich artist.” It has, however, been around for a long time – 1956, to be exact. Pretty interesting story there too: CEO Peter Cancro was a teenager when he bought the franchise for $125,00 in 1975. Now? Well, it’s worth billions.
Cancro has ushered Mike’s through its early franchising days in 1987 through becoming one of the country’s biggest fast-casual chains with more than 3,000 locations across the nation.
“We believe we are still in the early innings of Jersey Mike’s growth story and that Blackstone is the right partner to help us reach even greater heights,” Cancro said in a statement, per Reuters. Blackstone has a lot of resources and institutional know-how to take Jersey Mike’s to the next level.
The company did wonders with the Tropical Smoothie Cafe, and there’s no reason to think it won’t be the same kind of deal for Mike’s. Whether or not this has anything to do with a 2023 deal with Roark Capital to buy Subway for $9.55 billion remains to be seen. The deal has what’s called an “earn-out agreement,” which in this case means the price won’t be fully paid until Jersey Mike’s opens a 4,000th store. Subway has a similar deal with Roark.
“Blackstone has helped drive the success of some of the most iconic franchise businesses globally and we look forward to working with them to help make significant new investments going forward,” Cancro said. In addition to Tropical Smoothie Cafe, Blackstone put an equity investment into 7 Brew Coffee, to expand that business.
“Blackstone has deep experience helping accelerate the expansion of high-growth franchise businesses and this area is one of our highest-conviction investment themes,” Blackstone senior managing director Peter Wallace said.
Perhaps one of the main reasons for Jersey Mike’s glow-up is the inclusion of DeVito. That came about in 2022 when Jersey Mike’s hired a Chicago-based ad agency named Highdive. According to CMO Rich Hope, the sandwich shop was looking to “amp things up a bit.” This led to the hiring of DeVito.
“The unbelievable thing about Danny is he appeals to a wide variety of audiences,” Hope said. “I watched the spot at home with my wife and my youngest and my mother-in-law – so ages 18 and 88 – and my mother-in-law said she loved Danny DeVito because he’s so funny. My youngest called him the ‘GOAT’ and said he’s the funniest guy on ‘Sunny in Philadelphia.’ It made me think maybe we have something here.”
The advertising worked, spiking sales and keeping DeVito on our screens and in our hearts. Let’s just hope he gets a little piece of this $8 billion once that 4,000th store opens. In the meantime, we have those commercials to keep us warm.