Subway on a fast roll to success

By IRENE CHAPPLE

The global might of Subway, the sandwich fast-food giant that turns over US$7 billion a year - was a happy accident, according to its founder, Fred DeLuca.

Well, its first store was, anyway. These days, when territory managers sign their contracts, "they start out with a mission", DeLuca said during a quick visit to New Zealand.

That mission is "to become the number one fast-food chain in their territory in store count and customer satisfaction".

"If they don't think that can be accomplished we don't take them on."

For four decades, Subway has been slapping salads on fresh breads.

In the past five years, it has ridden a rising tide of enthusiasm for fresh, healthy fast-food.

And that, says DeLuca, 56, was a case of being in the "right place at the right time".

The trend towards healthier foods is now being followed by chains such as McDonald's and KFC - better known for their fried foods - as concerns about obesity cut into sales. McDonald's is now promoting healthy alternatives such as salads and muesli. KFC's chicken wraps have reportedly sold well.

Subway opened its first store in Connecticut in 1965 and now has 20,942 franchised stores around the world, 100 of them in New Zealand.

DeLuca muses on the chain's success. "We never thought of it as healthy food or fast healthy food ... we just thought of it as a kind of food we might be able to sell. We just kept doing the same thing and I think the trend has caught up with us."

The story has a simple beginning: DeLuca, who grew up in a New York housing project, was a kid who kept his eye on the money. He financed his baseball card and comic purchases through newspaper routes and selling bottles.

The DeLuca family became friends with Peter Buck, a nuclear physicist. Some years later, when DeLuca asked for advice on how he should pay his way through medical school, Buck's reply was: open a "submarine sandwich" (filled roll) store. Buck enjoyed the taste of his local submarine sandwiches and wrote DeLuca a cheque for US$1000. The first store opened and the Subway empire begun.

DeLuca continued his studies, but discovered a distaste for science classes. He switched to psychology "and that probably sealed my fate. You can't get a good job in that [field] so I kept on making sandwiches".

DeLuca, who still owns the company in partnership with Buck, franchised the concept in the mid-70s and the Subway brand sprawled across the world. It came to NZ in 1995.

Introducing the brand here was difficult, and in the first few years the business just broke even.

But the brand is now well established and other submarine stores have opened.

In the past five years, says DeLuca, store sales across America have doubled as concerns about health are highlighted. But he won't talk profit, nor say what he is worth.

"But my wife thinks I'm worth my weight in gold."