The Legendary Subway Co-Founder Started the Business with $1,000 and a Handshake
When Subway co-founder Fred DeLuca was growing up in the housing projects of Brooklyn, he probably never imagined that one day he would build a billion-dollar sandwich empire. Famous for the $5 footlong, Subway has become one of the world’s best-known franchises, with more than 37,000 locations in over 100 countries. Millions have enjoyed the iconic franchise’s sandwiches, wraps and salads, earning DeLuca billions. His is the quintessential rags-to-riches story.
Born on Oct. 3, 1947, DeLuca was entrepreneurial from a young age and collected soda bottles to turn them in for the deposit in order to buy comic books. After reading the comic books, he sold them to other kids and bought more with the profits. With hard work, he became a member of Junior Achievement, a nonprofit organization with a mission to inspire and prepare young people to succeed through financial literacy, work readiness, entrepreneurship and more. (He would later be inducted into the Connecticut Chapter Junior Achievement Hall of Fame.) As you can see, the Subway franchise co-founder was destined to do great things.
$1,000 and a Handshake
Subway’s founding goes back to 1965 when 17-year-old DeLuca asked a family friend, Dr. Peter Buck, for advice on how to pay for college tuition since DeLuca worked minimum wage ($1.65/hr.) at the local hardware store. Since Buck did well financially and had a nice home, DeLuca hoped that Buck could be persuaded to help him with tuition. But Buck surprisingly gave him $1,000 as an investment for them to open a submarine sandwich shop together, and they shook on it.
The duo’s first Pete’s Super Submarine location opened in Bridgeport, Conn., in August 1965. The proceeds from the business helped DeLuca pay for college; he eventually graduated with a degree in Psychology from the University of Bridgeport.
Although the first store failed, that didn’t hinder their determination to grow, according to Forbes. They opened a second store in 1966, and two years later the restaurant’s name was changed to Subway. The duo went on to own and operate 16 submarine sandwich shops throughout Connecticut within a decade and met their goal of doubling in size through franchising.
With more experience under their belt, they became astute businessmen and refined the operations. Subway was established as the first open-kitchen concept after DeLuca picked up a hitchhiker who admitted to stealing soft drinks from the shop’s cooler while the sandwich maker’s back was turned. The brand’s sandwiches have been made in front of the customers ever since.
Honors and Distinctions
DeLuca married his high school sweetheart, Elisabeth, and they spent many date nights frequenting other sub shops to see how their business compared to the competition. Over the course of his life, he received many accolades such as an honorary doctorate from his alma mater. According to Subway’s tribute to DeLuca, he carried the torch through Brooklyn during the Olympics and was inducted into the International Franchise Association (IFA) Hall of Fame and the Entrepreneur’s Hall of Fame. He’s credited with creating the IFA’s Second Tuesday network group and pioneered one for the first development agent programs in franchising. To help other entrepreneurs succeed, he wrote Start Small Finish Big: Fifteen Key Lessons to Start-and-Run Your Own Successful Business. He also supported causes like the American Heart Association and believed in serving those who serve, eventually creating his own foundation.
The Frederick A. DeLuca Foundation
The Frederick A. DeLuca Foundation was created in 1997 and supports charitable programs that empower individuals to lead healthy and productive lives through education, awareness, and more. According to Subway’s tribute, he required that every executive director applying for a grant would receive a Subway gift card, regardless of if they got the grant or not. To DeLuca, this was a small token of appreciation for their hard work. The foundation’s Board of Directors includes Elisabeth DeLuca, Jonathan DeLuca, and Suzanne Greco, Fred’s sister.
The Fred DeLuca Story
Through hardships and successes, DeLuca and Buck left an indelible mark on franchising with Subway. Weeks after the iconic franchise’s 50th anniversary in 2015, DeLuca passed away at 67 from Leukemia, but his legacy and impact can still be felt throughout the franchise industry today. The Fred DeLuca story is about a man of meager means becoming the billionaire co-founder of a world-famous sub shop. Who wouldn’t be inspired by that?
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