No. 1 With Everything

How Subway Continues to Grow

From all the action over at Subway, it's evident the sour economy hasn't squelched any of the company's aspirations for 2002; DeLuca doesn't even see it as an obstacle. "Maybe we just haven't been affected very much," he says. "We watch our sales closely every week to see if we're on trend, and we see the exact same sales trend after September 11 as before. That maintains franchisee confidence, so our current people are probably going to follow through [with opening new] stores they've had on the drawing board." With 15,594 stores in 73 countries at press time, DeLuca expects to add 5,000 stores to Subway's press-time domestic count of 12,946 units over the next four to five years.

Finding locations for newly purchased franchises is always a challenge, according to DeLuca, but saturation isn't necessarily the culprit. "There are huge opportunities," he says. "Almost the entire state of California and the entire Northeast are red, [representing low-density markets on Subway's growth chart]. Then there are large amounts of red throughout the country."

DeLuca says international markets are also strong, despite scattered anti-American sentiment following the bombing campaign on Afghanistan last fall. "I don't think being an American company is going to have a big impact [on Subway]," he says. "In fact, I'm not even sure that, in some parts of the world, people even know we're an American company."


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This article was originally published in the January 2002 print edition of Entrepreneur with the headline: No. 1 With Everything.

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