It was the summer of ’65. "Help Me Rhonda" was blasting from the speakers of newly minted Mustangs and T-Birds. Lyndon Johnson was in the White House and The New York World’s Fair was offering a hope-filled but commercialized glance into the future.
It was that very future that Fred DeLuca was concerned about. Having just graduated from high school, young DeLuca turned his thoughts toward achieving a higher education. An education would no doubt be the key to success; the type of success that not even Fred himself dared to dream about. At this moment in time, a college education seemed as far-flung as the prospect of a man walking on the moon.
It was a typically hot and humid summer day in Bridgeport, Conn., when the DeLuca family’s phone rang. Dr. Peter Buck, a family friend called to announce that he had changed jobs and was moving his family to Armonk, New York, only 40 miles away. It was time for celebration, indeed, for it had been almost a year since the Buck’s and the DeLuca’s parted company.
Plans were quickly made for a reunion. It was on that fateful Sunday afternoon in July, 1965, during a barbecue at the Buck’s new home, that a business relationship was forged between young Fred DeLuca and Dr. Buck that would forever change the landscape of the fast food industry.
During the summer of ’65, there wasn’t that much hope that the eldest DeLuca child would have enough money to pay for his college tuition. He was a hard-working, competent and dependable young man but the $1.25-per-hour minimum wage job that he had at the local hardware store wouldn’t begin to pay for an education. As they pulled into the Buck’s driveway, it occurred to Fred that perhaps he could ask Pete for some advice. He half expected Dr. Buck to offer to loan him the money. After all, they had known each other for years and when Pete would learn how badly Fred had wanted to go to college, to study to become a medical doctor, there might be a good chance that he would offer to help.
"I think you should open a submarine sandwich shop," said Buck.
"What? What an odd thing to say to a seventeen-year-old kid," thought Fred.
Before Fred could respond or express his surprise, he heard himself say, "How does it work?"
Pete explained the submarine sandwich business. He said that all one had to do was to rent a small store, build a counter, buy some food and open for business. Customers would come in, put money on the counter and Fred would have enough to pay for college. To Pete, it was just as simple as that, and if young Fred was willing to do it, Pete was willing to be his partner.
As the DeLuca’s were getting ready to leave, Dr. Buck pulled out his checkbook and wrote a check for $1,000. That was his investment in their new venture.
On the drive back home, little did Fred know that if he succeeded at opening a submarine sandwich shop, he would accomplish more than funding his education. Success would mean financial independence and everything that comes with it, not just for him, but for many other people around the world. Success would mean adventure and excitement on a non-stop roller coaster ride that would eventually be called SUBWAY® Restaurants.
The duo had worked hard over the years. In fact, they had a goal of opening 32 submarine sandwich shops within 10 years. By 1974 they owned and operated 16 units throughout the state of Connecticut. Although it seemed unlikely that they would double that number in two years, DeLuca concentrated on expanding SUBWAY® Restaurants.
On a Monday night in 1974, Buck and DeLuca met with their attorney. With him, they discussed the future of their business. As they evaluated their options, talk turned to franchising. Franchising, they had previously thought, was for the big companies and had dismissed the idea. Now, being behind schedule, they were willing to look into it. All there was to do was recruit people who would invest their money and use Pete and Fred’s management system to open and run SUBWAY® restaurants in their hometown.
Rather than hiring consultants, DeLuca figured that the fastest way to expand the business was to go out and find a Subway franchisee. That’s when he spoke to his friend Brian Dixon. DeLuca made him an offer that he couldn’t refuse. He told him about their franchising plans and offered to loan him the money to buy their restaurant located in Wallingford, Conn. DeLuca even said that if he didn’t like the business, he could return it to them and owe them nothing.
Dixon refused. He was used to getting a paycheck every week and didn’t want to risk going into business. DeLuca devoted his time to managing their existing restaurants and decided to worry later about franchising.
One day, Brian Dixon changed his mind. When he reported to work that morning, he was shocked to discover a padlock on his boss’s office and a sheriff’s note that stated that the business was closed. It was bankrupt. Brian didn’t panic. Somewhere in that sheriff’s notice, he saw the word "opportunity" and decided to call DeLuca and take him up on his previous offer to become the very first SUBWAY® franchisee. From that day forward, not only did Dixon’s life change, so did the way that SUBWAY® did business.
In the year 2004, the SUBWAY® chain entered its 39th year of operation. It is the world’s largest submarine sandwich chain with more than 21,000 Subway franchises in 75 countries. As a matter of fact, the SUBWAY® chain operates more units in the US and Canada than McDonald’s® does. Countless awards and accolades have been bestowed upon Fred DeLuca and the SUBWAY® chain over the past 39 years. The SUBWAY® name and its products have even appeared in numerous television and motion picture productions. Not bad for a seventeen-year-old kid from “the projects”!