SUBWAY Story: The SUBWAY Story

Summary

Subway, now a global fast-food giant, began in 1965 with a 17-year-old Fred DeLuca and a simple idea: to pay for college by opening a submarine sandwich shop. With the support of his family, Fred faced early struggles, including financial hardships and running the business with limited resources. Despite this, the company thrived after shifting to a franchising model. Fred set an ambitious goal of 5,000 stores by 1994, a target he exceeded. By 2011, Subway had grown to over 35,000 locations worldwide, driven by Fred’s unrelenting vision and strategic goals, now eyeing an even bolder target of 100,000 stores by 2030.

Takeaways

• 😀 Subway was founded in 1965 by 17-year-old Fred DeLuca, with an $11,000 loan from family friend Pete.
• 😀 Fred DeLuca's idea to open a sandwich shop stemmed from a conversation with Pete, who suggested starting a submarine sandwich business.
• 😀 The first Subway store was located in a poor location, but it sold out its inventory on the first day, signaling the start of its journey.
• 😀 Fred and Pete struggled with the business initially, working with limited resources and a small family team to keep things afloat.
• 😀 The DeLuca family played a crucial role in Subway's early success, with everyone, including Fred's sister, pitching in to help run the business.
• 😀 Vendors in Bridgeport, Connecticut, supported Subway by offering credit, helping the business survive its early financial challenges.
• 😀 Dick Pilchin joined Subway as the first marketing employee, playing a key role in advertising the brand and helping establish the Subway name.
• 😀 The name 'Subway' was chosen to create a simple, recognizable brand and was accompanied by a new logo for consistency.
• 😀 Subway's expansion efforts began with store number five, which became a successful, profitable location, marking a turning point in the business.
• 😀 In the early years, Subway struggled to become profitable, but Fred's vision of opening 32 stores in 10 years slowly started to take shape.
• 😀 Subway began franchising to accelerate growth and achieve their goal of 5,000 stores by 1994, which they surpassed by opening 10,000 stores by 1994.
• 😀 By 2011, Subway had grown to become the largest international franchise in the world, with over 35,000 locations in nearly 100 countries.

Q & A

Who were the founders of Subway and how did the company start?

Subway was founded in 1965 by Fred DeLuca, a 17-year-old, and his friend Peter Buck. Fred took an $11,000 loan to start the business with the goal of paying for college.

What was Fred DeLuca's initial plan for Subway?

Fred DeLuca's initial plan for Subway was to open a sandwich shop to help pay for his college education.

How did Fred's family contribute to the early success of Subway?

Fred's family played a crucial role in the early days of Subway. His mother worked at the store during the day and his father helped out at night, while his sister also pitched in by performing small tasks.

What role did the vendors play in Subway's early years?

The vendors were essential in keeping Subway afloat during its early years. They extended credit to Fred and Peter due to their honesty and regular visits to purchase supplies.

What was Subway's first significant marketing effort?

Subway's first significant marketing effort was when Dick Pilchin, their first employee, was hired to help with advertising. He played a role in creating the Subway name and developing marketing strategies.

Why did Fred and Peter decide to franchise Subway?

Fred and Peter decided to franchise Subway because they were struggling to open enough stores on their own, and they needed a way to expand rapidly and improve performance in stores further from their location.

What was Fred DeLuca’s ambitious goal for Subway in the 1980s?

In the 1980s, Fred DeLuca set an ambitious goal to have 5,000 Subway stores by 1994, a target that seemed unrealistic to many at the time.

How did Subway's growth compare to Fred DeLuca's goals?

Subway exceeded Fred DeLuca’s expectations by reaching 5,000 stores by 1990 and 10,000 stores by 1994, far ahead of the original goal.

What milestone did Subway achieve by 2011?

By 2011, Subway became the largest international franchise in the world, with more than 35,000 restaurants in nearly 100 countries.

What is Fred DeLuca’s latest goal for Subway?

Fred DeLuca's latest goal for Subway is to reach 100,000 stores by 2030, continuing his tradition of setting ambitious growth targets.