Fred DeLuca: $1000 was turned into 44,268 stores

Fred DeLuca
Subway founder
3-10-1947 – 14-9-2015

At age 17, Fred DeLuca borrowed $1000 to open a sandwich shop in Bridgeport, Connecticut. He called it Pete's Submarines in honour of the mate who lend him the money – Peter Buck.

Fred DeLuca: A gregarious, hands-on chief executive.

However, its name had to be changed after his local radio advertisements, delivered in his native Brooklyn accent, confused many listeners – they thought he was saying "Pizza Marines."

A second shop was not a success either but DeLuca parlayed the experience into building the world's largest chain of fast-food franchises, Subway. Today there is an empire of 44,268 independently owned Subways in 110 countries, surpassing the outlets of Kentucky Fried Chicken (18,000) and McDonald's (36,000).

DeLuca, who has died aged 67, became ill two years ago while travelling around to visit Subway outlets. He was diagnosed with leukaemia and began receiving treatment. He still oversaw the brand as chief executive but recently named his sister, Suzanne Greco, president to run the chain's day-to-day operations.

A gregarious, hands-on chief executive, DeLuca had run those operations for decades, personally signing company cheques, making corporate decisions, travelling the country in an old car and stopping at Subway outlets incognito to sample the food and service and talk with franchise owners and customers.

Subway does not publicly report financial results but Forbes magazine said it had revenue of $US18 billion in 2012. It listed DeLuca, the president, and his co-founder and partner, Buck, as the 259th-richest Americans, each with about $3.5 billion in 2015.

Subway grew phenomenally after 1974 when it began using franchises. It undercut its competitors with relatively low startup costs, lower prices and marketing that emphasised fresh ingredients and lower-calorie, reduced-sodium foods. While DeLuca's success story was often portrayed as inspirational, Subway's extraordinary growth was achieved with aggressive, sometimes questionable tactics, and despite occasional unflattering publicity. Subway settled many claims, paid fines and reviewed and modified some of its business practices.

But it also produced thousands of success stories among franchise owners, many with no previous commercial experience, who profited from the company's guidance. I really feel terrific that so many people have done so well," DeLuca told Fortune magazine in 1998, responding to its findings of abuses in Subway business operations.

"But there are risks. People can lose money. It bothers me that people lose money, but I don't lose sleep over it. This is America."

Frederick DeLuca was born in Brooklyn, New York, to Salvatore and Carmela DeLuca. His father was a factory worker and Fred spent part of his childhood in the Bronx. The family later moved to Bridgeport where he graduated from Central High School in 1965.

Hoping to study medicine, he took a summer job in a hardware store, but he knew his wages would not cover college expenses and thought of opening the sandwich shop to help pay his way. The rest is history.

New York Times