Retail Food Group announces results, signs 20-year deal to bring Firehouse Subs to Australia

Revived Gold Coast food franchisor Retail Food Group is partnering with a veteran US fast food brand to take on national giant Subway by opening 165 stores across Australia - the first in south east Queensland by the end of this year.

Revived Gold Coast food franchisor Retail Food Group has taken on its first major chain in more than five years, with veteran US brand Firehouse Subs scouting for locations as it looks to establish 165 stores in the next decade.

In a statement to the ASX on Wednesday, RFG said it wanted to take on national giant Subway in the growing $1.7bn sandwich category, with the first store to open in southeast Queensland by the end of this year.

The deal came as RFG announced increased earnings and revenue for the first half of the financial year, with its net profit of $7.3m up by 73.8 per cent on the same time last year.

Shares in RFG had climbed almost 12 per cent to $2.06 by 10am Wednesday.

Firehouse Subs, founded in Florida in 1994 by two former firefighters, is owned by Restaurant Brands International (RBI), which operates 30,000 venues including Burger King and Tim Hortons.

It acquired Firehouse for $1bn in 2021 and began its international expansion with a store in Switzerland in 2023.

The brand is known for its made-to-order sandwiches, layered with premium meats and cheeses and then steamed hot.

Firehouse Subs is coming to Australia.

Its Asia Pacific expansion comes via a 20-year development and franchise agreement with RFG whose current brands include Gloria Jean’s Coffees, Donut King, Brumby’s Bakery and Crust Pizza.

It took on Sunshine Coast baked goods favourite Beefy’s Pies in November 2023 but has announced it will close its 19 Michels Patisserie stores which have failed to thrive.

RFG said it would commit US$4m (A$6.3m) for each of the first three years of the Firehouse development, increasing to US$5m (A$7.9m) in years four to six. It has the option to exit the contract at the end of year three.

RFG said it had rejected other international brands and had conducted more than a year of due diligence before cooking up the agreement with Firehouse.

RBI president Thiago Santelmo said the company was “excited to expand Firehouse Subs in the Asia-Pacific region, bringing our iconic sandwiches and rich brand heritage to Australia”. “This is made possible through our partnership with RFG, whose deep local expertise will be instrumental in delivering an outstanding guest experience,” he said.

RFG Chief Executive Officer Matt Marshall.

RFG CEO Matt Marshall said the introduction of Firehouse Subs was an exciting opportunity.

“I am convinced that Australians have never tried anything like the quality and flavour of Firehouse Subs,” he said.

“This is a brand that is all about the highest quality sandwiches with exceptional service.

“We couldn’t ask for a better partner than RBI, bringing global scale and new market entry expertise.”

The Firehouse Subs menu includes signature firefighting-themed products like the Hook and Ladder, Firehouse Italian, and the Firehouse Beef and Cheddar Brisket.

Mr Marshall said RFG expected to open 15 company-owned restaurants in the next three years, before launching franchising opportunities in year four.

RFG’s rights to open and franchise stores after 2027 are subject to the satisfaction of certain conditions.

RFG reported 24.7 per cent growth in underlying revenue, logging $66.5m for the half – boosted by $10.2m from its new brand Beefy’s.

While 17 franchises closed across its network, 25 new stores opened in the first six months of FY25.

Originally published as Retail Food Group announces results, signs 20-year deal to bring Firehouse Subs to Australia