Subway founder Fred DeLuca poses at a Subway branch in central London January 26, 2012.STEFAN WERMUTH/Reuters
Fred DeLuca, who co-founded the Subway sandwich chain to finance his college studies before it grew to overtake McDonald's Corp. in size, has died. He was 67.
He died on Sept. 14, according to an e-mailed company statement. In 2013, the company said DeLuca was receiving treatment for leukemia. In June, Suzanne Greco, his sister, took on his role of president.
Along with Peter Buck, DeLuca opened the company's first restaurant in Bridgeport, Connecticut, in 1965 and expanded it to include about 42,000 outlets worldwide over the next five decades. As a 17-year-old high-school graduate, he went into the sandwich business with Buck, a family friend and nuclear physicist, after asking him for a $1,000 loan. Buck came up with the idea to help DeLuca pay his way through college.
DeLuca and his partner turned the privately owned brand, initially called Pete's Super Submarines, into a franchise in 1974 and took the business nationwide with its BMT sandwich, named after the Brooklyn-Manhattan Transit company, and the "Snak" sub sandwich, later known as the "6-inch." In 2002, Subway overtook McDonald's in number of restaurants globally, according to a Wall Street Journal article.
'Big Limitation'
"Once you get a name brand and traction, it's relatively easy to expand" DeLuca said in a Bloomberg interview in 2013. "The big limitation when we start to grow quickly is location."
DeLuca had a net worth of $3.5-billion, ranking him 259th in the U.S., according to Forbes magazine.
Subway, which is owned by the holding company Doctor's Associates Inc., became known as a healthy fast-food alternative to McDonald's and other chains, such as Kentucky Fried Chicken and Burger King. Helped by marketing "Jared the Subway Guy," who lost 245 pounds with his own Subway diet for almost a year, the Milford, Connecticut-based company became the first quick– service restaurant to gain the American Heart Association's Heart Check Certification for some of its low-calorie, low– sodium meals in 2012, according to Subway's website.
The company cut its ties to Jared Fogle, the Subway Guy, in 2015 after he was charged with engaging in sex acts with minors and receiving child pornography. He agreed to plead guilty to child exploitation and child pornography, the Associated Press reported Sept. 1.
Running Costs
A Subway franchise, which charges about $5 for a foot-long sandwich, costs $15,000 in initial fees and 8 per cent of weekly sales in royalties to its owners. Franchisees also pay 4.5 per cent toward advertising. The company's first international franchise was granted in 1984 in Bahrain, according to Subway.
"They were ahead of the curve with the health positioning, they have a halo in the mind of the consumer, and they have a franchising model that's been very aggressive," David Henkes, a vice president at Chicago-based research firm Technomic Inc., said in a 2010 interview in QSR magazine.
Frederick A. DeLuca was born in 1947 in Brooklyn, New York, to parents Carmela and Salvatore DeLuca. He grew up in the Bronx and lived in public-housing projects before the family moved to Schenectady, New York, when he was 10, according to a Subway profile. His family then relocated to Bridgeport, where he attended Central High School. He earned a degree in psychology at the University of Bridgeport in 1971.
While working in the local hardware store to save money for college, DeLuca approached Buck for a loan at a barbecue.
'Doing Well'
"I thought, 'He's doing well. I'm going to ask him if he has any good ideas for college,' kind of really hoping he's going to reach in his pocket and pull out a big stack of $100 bills and just give them to me," DeLuca said in an interview with CNBC about his meeting with Buck.
Buck pitched the idea of Subway stores to DeLuca after recalling the Italian sandwich shop, called Amato's, that he and his father had visited on Sunday evenings when Buck was a child, according to a 2009 article in the Washington Post. DeLuca and Buck then drove to Maine to study Amato's sandwiches before opening their first store weeks later.
"I've been doing this for 45 years," he said in the 2010 interview with QSR magazine. "Sometimes I think, 'If I just keep at it for another five years, I could say I've done it for 50. When I hit 50, I'll probably say, 'You know, I could do this for 100 years.'"
DeLuca was married to his high-school sweetheart, Liz, and had a son, John, according to a 1993 article in the Los Angeles Times. They survive him. They had a house in Orange, Connecticut, and one in Fort Lauderdale, Florida, the Times reported.