Private equity (PE) firms are feasting on opportunities in consumer-facing industries, carving out high-profile deals that reshape everything from how Americans dine to how they exercise and find childcare. Blackstone’s recent $8 billion acquisition of Jersey Mike’s Subs underscores a growing trend: private equity’s hunger for scalable, high-demand businesses with loyal customer bases and room for growth.¹

The trend isn’t limited to fast-casual dining. Across industries like fitness, childcare, and technology, PE investments are surging, raising interest about how these moves will affect competition, pricing, and the customer experience.

Why restaurants are on the menu

Fast-casual and quick-service restaurant chains have become a favorite investment category for private equity firms. Earlier this year, Roark Capital finalized its acquisition of Subway in a $9.6 billion deal, adding to its ownership of Inspire Brands, which includes Dunkin’, Arby’s, and Jimmy John’s.² These high-profile deals highlight the appeal of chains with established brand loyalty, efficient supply chains, and strong potential for geographic or digital growth.

Empower’s financial insights suggest why this sector is may be so attractive. Data from the Empower Personal Dashboard™ shows that U.S. consumers spent an average of $836 at restaurants in November, indicating robust demand for dining out. PE firms may see an opportunity to scale these businesses while capitalizing on the continued consumer shift toward convenience and value.

Read more: Private equity vs. public equity: What's the difference?

Beyond subs: PE’s expanding appetite

The surge in restaurant acquisitions is part of a broader push by private equity into consumer-facing sectors ripe for growth and disruption. Among the key industries attracting attention:

• Fitness chains: Subscription-based gyms offer PE firms predictable revenue and scalable models. Rainier Partners and its subsidiary Omega Fitness recently expanded to own 120 Anytime Fitness locations across the U.S.³ Meanwhile TPG is considering selling Crunch Fitness.⁴ The fitness boom coincides with the global wellness industry reaching a record $6.3 trillion in 2023, with projections to hit $9 trillion by 2028.⁵
• Childcare centers: High demand for childcare services, profitable centers, and the potential for operational streamlining make this sector particularly appealing.⁶ PE firms now own 8 of the 11 largest U.S. childcare chains, allowing for rapid expansion.⁷
• Tech sector: Private equity activity in the tech sector has surged, driven by demand for artificial intelligence (AI) and cloud-based solutions. In Q3 2024, tech accounted for 28.3% of PE deal value, compared to 18.7% the previous quarter. Notable deals include KKR and Dragoneer Investment’s $4.8 billion acquisition of Instructure Holdings and Bain Capital’s $4.5 billion purchase of Envestnet.⁸

Consolidation: Strength in numbers

Consolidation in industries like restaurants, fitness, and technology can create new opportunities for both businesses and consumers. When private equity firms streamline operations and improve supply chains, they can often pass those efficiencies on to customers. For example, investments in technology can lead to enhanced digital ordering systems at restaurants, better equipment in gyms, or improved user experiences in tech products.

Larger, PE-backed companies can often have the resources to expand geographically and provide services to underserved areas. This means consumers may gain access to popular restaurant chains, state-of-the-art fitness centers, or innovative childcare options.

Benefits to consumers

Changes can occur for consumers with PE ownership.⁹ PE-backed companies can offer enhancements such as advanced technology, more personalized services, or improving product consistency. Empower research highlights the importance of pricing and product variety for consumers, for instance, with Americans opting for shopping at larger chains due to lower prices (85%), greater product variety (71%), and better return policies or warranties (64%).

The bigger picture

Private equity’s growing role in consumer-facing industries reflects a broader trend of innovation and modernization. With access to capital and resources, PE firms can act as catalysts for change. By investing in infrastructure, expanding services, and adopting cutting-edge technology, they could help shape industries to meet evolving consumer needs.