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The Sandwich King: The Early Years of Subway’s Fred DeLuca

Fred DeLuca was nothing more than a kid from “The Projects”, looking for a way to pay his college tuition when he opened up a sandwich store in Bridgeport, Connecticut. At the time, he could not even afford the $25 lawyer’s fee he needed to sign the lease. That was back in 1956. Today, his store has blossomed into the third largest fast food chain in the world. Subway remains one of the largest global privately held companies and earns revenues in excess of $9.5 billion.

The Little Submarine That Could: DeLuca Takes Subway to the Top

In less than a week, DeLuca had gone from a struggling student earning minimum wage, to a submarine sandwich store owner, all thanks to his friend Pete Buck. “I talked to Pete on Sunday,” recalls DeLuca. “I borrowed my dad’s car on Monday and drove around a little bit and found a vacant store.” The next Saturday, DeLuca returned to the store with Buck and rented it. He never signed a lease, but it was all his.

Lesson #1: Beginning as a Beginner is Okay

The tremendous success of the Subway chain is a testament to the fact that you do not need to know everything about the business before you open up shop. When DeLuca first got into the sandwich-making business, he was doing two things he had never done before; not only had he never ran a business, but he had never even made a submarine sandwich before.

Lesson #2: Know Where You Want to Go, Then Worry about the Way

As soon as DeLuca heard the story about Mike Davis he began setting in stone his own goals for himself. Davis was the owner of a sandwich shop chain in New York who had begun from nothing and grown his operation in a string of 32 stores. From thereon out, DeLuca’s goal was to match that number.

Lesson #3: Put Yourself in Your Customers’ Shoes

Hindsight is 20/20. Looking back on the success – or lack thereof – of his first Subway store, DeLuca acknowledges that his biggest mistake was its “crummy location. In February, the store was doing so bad that we were thinking of closing up.” But together with his partner, Buck, the pair decided to try something even more eccentric: they decided to open up a second store. “We talked ourselves into building the second store,” says DeLuca.

Lesson #4: The Name of the Game is Profit or Perish

In Subway’s early days, DeLuca maintained a close watch over all of his expenses, making sure that they were always kept to a minimum. He also made sure that he never ran out of money; he knew that a cash flow crisis was one of the top reasons why businesses failed. He was personally in charge of opening Subway’s first nine stores. But as Subway’s franchises began to multiply and its revenues soar, DeLuca came into a different kind of crisis, one that he had not been ready for.

Lesson #5: Make Business Personal through Your Relationships

When DeLuca opened up his first Subway store, it was a one-man operation. Occasionally, however, he would convince his mother to help him out. Together, they would drive around town every Friday to visit their four main vendors – the people who supplied them with all of their meat, bread, vegetables and paper. But it was not to pick up any of the supplies.

Fast Food Fury: How DeLuca Created a Franchising Phenomenon

“What's happening to us is beyond whatever I imagined,” says DeLuca, looking back on his career. “If you told me 30 years ago that one day I'd be sitting in a Subway store in Russia, I'd have said you were crazy.” DeLuca went from being just another kid in Brooklyn to being at the top of an international fast food phenomenon. How did he do it?

Fred DeLuca Quotes

Fred DeLuca Quotes

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