Do the Math

What's Next for Subway

While he wasn't particularly surprised by the fact that Subway was Entrepreneur's No. 1 franchise of 2003 (he keeps a close eye on the company's franchise numbers in relation to competitors), DeLuca was pleased. "A couple of years ago, we put in a few changes to our operation that really boosted the store sales and profitability," he says. "Existing franchisees started building more stores, and a lot of new people wanted to join the company. It's just a fortunate set of circumstances. It's amazing how many people contact us every week now for franchise information."

The past few years of Subway's history have been hugely successful. DeLuca notes that in 2001, the number of new franchisee leads they received grew by 75 percent. In 2002, it grew another 40 to 50 percent.

And the Subway advertising machine doesn't appear to be getting ready to slow down, either. The Jared Fogle campaign has helped increase brand awareness and has spawned Jared's Friends, a group of people who've also lost weight eating the healthy 6-under-6 Subway sandwiches (the 6 Subway sandwiches with 6 grams of fat or less). "We're doing incredibly well [with our advertising]. What's great about our team is that they keep analyzing the marketing and the commercial contents--they do a lot of research and testing," says DeLuca. "I don't know if they're going to be able to improve much on where they are now, but they are working hard to do just that."

Now that Subway has conquered the U.S. market, is true worldwide domination its next milestone? DeLuca reveals that Subway has just created a strategic plan to manage its international growth. The plan calls for having 7,500 stores open internationally by 2010--right now, they have about 1,500 stores outside of the United States and Canada. "We're basically looking to lay a really strong international foundation," he says.

Laying a strong foundation appears to be a theme that runs throughout the DeLuca mystique. "I'm a regular guy and just have a very simple approach to business," he says. "I just love Subway, and I want to keep focusing on the company for the benefit of all our franchise owners. I'm kind of married to the job. I know this business; I know the people. It's fun. For me, it's very satisfying."

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This article was originally published in the January 2003 print edition of Entrepreneur with the headline: Do the Math.

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