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Fast-Growing Subway Sandwich Chain Offers Taste Of American Dream

June 24, 1988 GMT

MILFORD, Conn. (AP) _ Entrepreneurs who believe the American Dream can be found in a foot-long submarine sandwich travel here each month to learn how to make mounds of money stuffing pounds of food into fresh-baked buns.

Their teacher and inspiration is Fred DeLuca, the man who would be, and is, the King of Subs.

Twenty-three years after DeLuca opened his first sub shop in nearby Bridgeport to raise money for college, his fast-food chain has grown to more than 2,200 stores, and new shops are opening at a rate of between 20 and 30 a week.

His company, Subway Sandwiches & Salads, is one of the fastest growing fast-food chains in the country and was recently named America’s top franchise by the magazine ″Entrepreneur,″ which compiles a Franchise 500.

Subway subs are being gobbled up at quite a clip. The chain says it is selling 1.5 million feet of sandwiches a week to customers who like to watch their meals take shape before their eyes and to their specifications.

Last year, gross sales totaled $360 million - an 89 percent increase over the year before, when there were only about half as many franchises.

Subway has its origins in Pete’s Super Submarine Sandwiches, a business DeLuca opened in 1965 at age 17 with the help of a family friend, Peter Buck. As the story is told, Buck suggested the idea to DeLuca as a way for him to make money for college, gave him $1,000 in starting capital and agreed to be his partner.

Aided by the decision in 1975 to start franchising, the company was able to meet its 10-year goal of 32 stores and begin expanding in earnest. Subway opened its first store in Alaska this spring and will soon have franchises in every state except Wyoming and South Dakota.

Subway shops can also be found in Canada, the Bahamas and Bahrain, and starting sometime this month folks Down Under will be able to try out such specialties as the Subway Club, a combination of roast beef, turkey and ham, when several stores open around Perth in western Australia.

The recent explosion in growth is the result largely of franchisees investing in additional stores, DeLuca said.

New franchisees learn about bookkeeping, hiring, management, cost-control and the finer points of making subs during two-week courses that begin every other Monday at the company’s headquarters here, now spread out over four locations but soon to be consolidated in a new building.


The students spend half their time at stores where the owners have agreed to help take part in training.

The students of submarine-making come ″from all walks of life and from all over the world,″ said Alexander Dembski, the director of training.

Many recent immigrants and other people who are short on cash and long on ambition are attracted to the relatively low start-up costs. A typical first store can be opened for about $65,000, or as much as $20,000 less if equipment is leased, DeLuca said. The franchise fee itself is only $7,500.

The students are typically a motley group. A salesman, draftsman, fast-food restaurant employee, computer consultant, Postal Service worker, and lumber broker were among the trainees enrolled in a recent class.

DeLuca addresses each class at least three times, drumming into the trainees’ heads the importance of such simple notions as increasing sales while decreasing costs. His dress and his manner are casual.

″Why am I here? Because they are really joining a new society,″ said DeLuca, as several students waited patiently to be photographed with their leader after class. ″It’s important people get an orientation as to what the company, and its president, are like.″

DeLuca knows why the trainees have come to his school - and it is not because they have always dreamed of making subs (or hoagies, heroes, torpedos, grinders or poor boys, as the sandwiches are variously called in different parts of the country.)

″Who, ever since they were kids, wanted to grow up and make sandwiches?″ he asks his class, prompting a wave of chuckles.

″OK,″ he continues, ″why do you want to open a sandwich shop?″ The trainees unabashedly declare their true motives: ″To make lots of money.″ ″To get incredibly wealthy.″ ″To be my own boss.″

Subway officials say much of the success of their business is due to the emphasis placed on individualized service, on letting customers watch as many stages of the sandwich-making process as is feasible - including the baking of the rolls, about four times daily, in ovens with glass doors.

″The visual appeal of the process is important. People want to be able to say, ’Can I have a little more lettuce,‴ said training chief Dembski. ″People like to see their food prepared expressly for them.″

Added DeLuca: ″Certainly our growth would not have been possible if it had not been for companies like McDonald’s leading the way and going out and showing the importance of eating continuously. But let’s face it, people get burgered out.″

End Adv Friday June 24