When Peter Cancro bought Mike’s Subs as a 17-year-old with a $125,000 loan from his football coach, he wasn’t even old enough to legally slice cold cuts at the Point Pleasant, New Jersey, sandwich joint.
The shop, which he ended up renaming Jersey Mike’s Subs, has since made him a billionaire.
On Tuesday, private equity giant Blackstone announced that it had entered into an agreement to buy a majority of Cancro’s company. The deal reportedly valued Jersey Mike’s Subs at around $8 billion including debt, bumping Cancro’s net worth to estimated $7.5 billion, according to Bloomberg.
In 1975, however, he was just a senior in high school who didn’t want to go into business. He had plans to study law and political science at the University of North Carolina at Chapel Hill. The night his mom suggested he buy the business he’d been working at since he was 14, he laughed, Cancro told Forbes in August.
When he thought about it more, though, “the light switch went off,” he said. He called the restaurant owner the next day and the owner told Cancro he had a week to find $125,000, Cancro told “The Jedburgh Podcast” in 2021.
“It was something I really wanted to do,” Cancro, now 67, told Forbes. “At that age, you don’t think you can fail.”
By the end of the week, he had secured the loan, worth nearly $750,000 in today’s dollars, from a former football coach who happened to be a banker. Cancro became the sole owner of Mike’s Subs before even graduating from high school.
Nearly 50 years later, the chain has just under 3,000 locations worldwide. In 2023, the company brought in $3.3 billion in sales and has had an average annual sales growth of about 20% since 2019, according to food service consulting firm Technomic.
‘I’ll put everything on the table’
The company’s growth hasn’t come without challenges. In 1991, four years after the company began franchising, the company struggled to secure the cash to pay its bills due to a series of bank failures in the Northeast, Cancro told “The Jedburgh Podcast.” He had to fire all of his corporate staff, including his brother.
“It was a tough time: 1991 [was] my toughest recession, even beyond 2008,” Cancro said, adding that he thought about taking the company public or selling some of his stake but didn’t. In 1994, he said, the situation improved, and the chain expanded into North Carolina soon after.
In 2006, the company flatlined again, largely due to the dot-com bubble burst in 2002, he said. At the same time, his stores were starting to show their age, so he made a risky decision to give the stores a face lift. “I said, ‘I’ll put everything on the table,’ and we paid for the retrofits,” he said on the podcast. “It was only like $15 million total, but it was all the money in the world back then.”
By 2007, he said, the company was back on an upwards trajectory.
‘We are still in the early innings of Jersey Mike’s growth’
These days, only 1% of people who apply to own a Jersey Mike’s franchise are approved, the company told Forbes. Opening a store front will run you anywhere from $200,000 to up to $1.3 million. That said, the returns can be well worth the investment: traditional locations bring in an average of $1.2 million a year in sales, according to the company’s website.
Cancro will retain a minority but “significant” equity stake in Jersey Mike’s and continue to lead the company as CEO following the completion of the acquisition, which is expected early next year, according to the press release. Blackstone’s portfolio of franchisors includes Hilton Hotels and Tropical Smoothie Café.
“We believe we are still in the early innings of Jersey Mike’s growth story,” Cancro said in the release.
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