We've called the race . . . and this time there's no dispute. In this year's Franchise 500, Subway is No. 1.

Once upon a time, in the land of hamburgers and pizza, a submarine sandwich came on the scene--charming everybody in town with its fresh-baked bread and savory meats. Steadily, the submarine sandwich grew to prominence in the land and proved itself to be a formidable competitor to typical fast-food fare, all while courageously defeating the evil queen.

Sound like a beautiful fairy tale? It really happened to Subway, the leader in the submarine sandwich franchise business (OK, everything except the evil queen part).

It was 1996 when Subway last found itself in the coveted No. 1 position in our listing. At that time, when founder Fred DeLuca was asked to look into the future and predict where he thought Subway was going, he said, "We'll see truly explosive growth." And from the looks of it, DeLuca was right on the money.

So what is Subway doing to ensure a bright future five, 10, even 20 years from now? "We're focused on building our customer base further through product improvements and increased store distribution," says DeLuca.

Explosive growth has indeed occurred: Subway saw the addition of more than 600 new franchises last year, as well as a 16 percent increase in store sales volume. "We made our menu more exciting than it's been in years," says Subway director of franchise sales Don Fertman. "[We have] our new Subway Select line of gourmet sauces and sandwiches and our low-fat line of sandwiches, as well as the increased [presence] of our advertising, which has made people notice Subway all over again."

Nobody could have possibly missed, for example, the prominent Subway ad that ran last year featuring Jared Fogle, who lost 245 pounds eating Subway sandwiches. "We're the kings when it comes to eating healthier," says Fertman, "and [the food] tastes good." With the popularity of the "7 Under 6" menu (seven sandwiches with 6 grams of fat or less), many see Subway as a fresh and healthy alternative to greasy burgers.

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This article was originally published in the January 2001 print edition of Entrepreneur with the headline: Sub-Liminable.

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