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The rags-to-riches story of Subway's late founder

HuffPost logo HuffPost 9/16/2015 Dominique Mosbergen

Subway co-founder and CEO Fred DeLuca, who transformed a small sandwich shop he started as a teenager into the world’s largest fast-food empire, died on Monday night. Cause of death was not released. He was 67.

Born in New York City in 1947 to second-generation Italian immigrant parents, DeLuca didn’t have a charmed childhood. He first lived in a low-rent basement apartment in Brooklyn before his family relocated to public housing in the Bronx.

Moving to “the projects” had been “a step up [for us],” DeLuca recalled years later.

When DeLuca graduated from high school at the age of 17, he worried about how he was going to put himself through college. His parents had instilled in him the value of a good education and he harbored dreams of becoming a doctor.

“The problem was that I couldn’t afford my dream,” DeLuca wrote in a 2005 essay. “My job at the local hardware store paid minimum wage, a mere $1.25 an hour. For me, a college education seemed as far-flung as the prospect of a man walking on the moon.”

DeLuca’s life would soon take an unexpected detour.

That year, 1965, he approached a family friend named Peter Buck about borrowing some money to pay for his college education. But Buck had something else in mind. 

“I think you should open a submarine sandwich shop,” Buck told him. He lent DeLuca $1,000 to do just that.

As DeLuca later wrote in his 2000 book, “Start Small Finish Big,” he knew “nothing about making sandwiches, nor the food industry,” but followed Buck’s advice and opened a small store in Bridgeport, Connecticut.

The plan was to run the sub shop and use the proceeds to help pay for college.

“It wasn't intended to support me forever,” DeLuca wrote.

He named the sandwich store “Pete’s Super Submarines” after his benefactor. In 1968, DeLuca changed the name to “Subway.”

DeLuca's company “grew phenomenally after 1974, when it began using franchises to expand," The New York Times reported. In 1978, Subway opened its 100th outlet. By 1987, it had 1,000 stores. 

Today, Subway has 44,000 locations around the world. The privately-held company, based in Milford, Connecticut, doesn't publicly disclose its financial performance, but Forbes estimated that it had a revenue of $18 billion in 2012.

DeLuca was estimated to be worth about $3.5 billion.  

The Subway co-founder had a reputation for being a “gregarious, hands-on chief executive.” He used to personally sign company checks and would travel incognito to Subway outlets nationwide to try the food and speak with franchise owners and customers, The Times reported.

In 2010, DeLuca told QSR Magazine: “I work every day, and I can’t figure out why I enjoy it so much.” 

After DeLuca was diagnosed with leukemia in 2013, he began scaling back on his role at the company. Earlier this year, he named his sister, Suzanne Greco, president to run Subway's day-to-day operations. The company has not said if Greco will take her brother's place as CEO. 

Other than DeLuca's ill health, Subway has faced some challenges in recent months.

The company cut ties with its longtime spokesman Jared Fogle in August of this year amid a child pornography investigation. Fogle later pleaded guilty to sex acts with minors and distribution of child porn.

Subway also come under fire for overextending itself with the sheer number of locations, per The Associated Press. The company has been accused in the past of employing questionable tactics to achieve its success, such as underpaying its staff.

DeLuca said in 2010 that the greatest challenge facing Subway as it continued to expand was the need to be consistent in its quality. 

“I tell my team all the time, ‘The biggest chain in the world used to be Howard Johnson. Now no one eats at a Howard Johnson,'" DeLuca told QSR Magazine. “The world doesn’t stand still and we don’t deserve to be where we are unless we stay ahead of things and take the necessary steps to remain competitive.”

According to the Times, DeLuca received a degree in psychology from the University of Bridgeport in 1971. In 2002, the institution granted him an honorary doctorate.

DeLuca is survived by Elisabeth, his wife of almost 50 years, and their son, John. 


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