SUBWAY - Who started that franchise?

SUBWAY was founded by a 17 year old student, Fred DeLuca, to help pay his college tuition. From humble beginnings in Brooklyn public housing, he grew one of the world’s largest quick service restaurant chains.

How it all started

When he needed money for college, Fred approached family friend Dr Peter Buck. Instead of just giving him the money, Buck pitched the submarine sandwich idea to Fred and invested $1000 to open a restaurant, based on an Italian sandwich shop that Dr Buck had visited. Fred agreed and ‘Pete’s Submarines’ opened in 1965, serving fresh, affordable, made to order sandwiches. 

The name was changed in 1968 to Pete’s Subway and later simply to SUBWAY.

The first year of business was a learning experience and a challenge. A year later they opened their second location, having realized that visibility and marketing were key factors to success. Fred believed that the biggest mistake he made was the ‘crummy location’ of his very first shop. Although initially the restaurants did not do as well as expected, by 1974 Fred was operating 16 stores.

Fred had difficulty keeping all 16 locations cohesive and meeting the same standards, so he decided it was time to franchise the business model. Fred believed franchising was the future, and convinced a friend, Brian Dixon, to become the first SUBWAY franchisee.

Franchise growth

Fred offered Dixon a franchise for no down payment and told him he could give the business back if he didn’t like it. Dixon had a steady job and turned Fred’s offer down, however, he changed his mind a few months later after his employer went out of business. 

The two friends made a deal over a cup of coffee and the first SUBWAY franchise was opened in Wallingford in 1974.

In the same year another 14 franchises sprung up and the business continued to expand exponentially. By 1982 there were some 300 outlets in 30 states, and in 1984 SUBWAY saw its first international expansion when a franchise opened in Bahrain. 

Two decades after the first franchise opened, DeLuca was the president and CEO of a company that had more than 8,000 stores worldwide.

Ahead of the health curve

SUBWAY was ahead of the curve when it comes to health positioning and became known as a healthier fast-food alternative to McDonald’s and other chains such as Kentucky Fried Chicken and Burger King. 

Fred DeLuca followed the KISS (Keep It Simple Stupid) theory and was regarded as an intense, hands on executive known for making surprise visits to franchises throughout the country. 

Fred passed away in 2015, leaving an impressive legacy in the SUBWAY brand. Today it’s the world's largest submarine sandwich chain with more than 44,000 locations around the world.