Retail Food Group co-launching Subway competitor Firehouse Subs in Oz

In a bid to give Subway a run for its estimated 49% share of the Australian sandwich market, Retail Food Group (ASX:RFG) is launching U.S. brand Firehouse Subs in Australia.

The news was well received: RFG jumped +13.6% to $2.09/sh on Wednesday, helping to pare year-on-year (YoY) losses (currently -34.7%.)

Called Firehouse Subs by its founding members (reportedly two brothers who were both firefighters) RFG said Wednesday a self-commissioned survey of 1,000 Australian participants responded well to the overall notion of the brand.

Firehouse talks a lot about its steaming process, which “unlocks” flavour, per the brand’s representatives and RFG promo material. This allows for a softer bite while other U.S.-facing Firehouse materials insist the bread stays crispy.

(You’d be forgiven, surely, for having assumed a firefighter-minded sandwich chain would probably use a grill.)

Aussies will have to wait to find out if the product is as good as RFG is expecting – but the market reaction shows some degree of conviction. So does RFG.

It says it won’t be buying brands unless there’s a chance to grow over 200 stores; low CapEx per outlet and a “clearly defined market opportunity.”

That clear definition appears to be the fact there’s no clear market leader behind Subway, giving RFG the tantalising possibility of capturing a huge portion of the market share when it comes to takeaway sandwiches.

RFG is expecting to open the first Firehouse Subs in SE Queensland in late 2025 with 165 new stores the ten-year-goal. RFG Will cough up US$4M/y into 2028 under a 20-year deal with early exit options.

RFG drew down $7.5M to fund the deal; after four years, it picks up the rights to sub-franchise the sub chain.

RFG last traded at $2.09/sh.

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