The History of Subway

Overview

Having been in business for more than 40 years, Subway has become one of the world's leading chain restaurants. In fact, Subway has more locations in the United States than McDonald's does. Subway offers a variety of sub sandwiches, chips, vegetables, salads and even personal pizzas.

Fred DeLuca

Fred DeLuca, a 17-year-old youngster fresh out of high school, was the initial creator of Subway Restaurants. DeLuca's goal was to pursue a college education, but he knew his minimum wage hardware store job that paid him only $1.25 an hour would not be close to enough funding for an education.

Initial Funding

On a hot summer day in Bridgeport, Connecticut, the DeLuca family phone rang. On the opposite end was Dr. Peter Buck, a close family friend. Dr. Buck said he would be changing jobs and moving his family and having a cookout to celebrate. Fred thought to himself that he should ask Dr. Buck for advice on how to fund his education. Dr. Buck told Fred that he should open a sub sandwich shop, and by the end of the night had given Fred a check for $1,000.

Plans for Expansion

The restaurant, at one point called "Pete's Subway," took off rapidly and business thrived. Buck and DeLuca had a goal that there would be 32 Subway locations within 10 years. In 1974, there were 16 Subway locations in Connecticut. DeLuca's No. 1 priority, however, was still expansion.

Franchising

Buck and DeLuca met with their attorney in 1974 to discuss franchising Subway. DeLuca figured the fastest way to expand was to simply go out and find a franchisee. He offered a franchise position to his good friend, Brian Dixon, and after Dixon's employer went bankrupt, he couldn't turn the offer down.

Subway Today

Subway quickly began to expand, and in 1984 opened its first international location in Bahrain, a small island country off the coast of Saudi Arabia. Subway passed McDonald's as the United States' largest restaurant chain in 2002. Subway continues to expand and become increasingly popular. It is difficult to turn on the TV without seeing a Subway commercial, or drive through a city without seeing at least one Subway. Nearly 3,000 of Subway's 31,000-plus locations are found in places such as stores, malls, truck stops, universities, hospitals and airports.