From Zero to Hero

Fred DeLuca's Perspectives on Franchising

Entrepreneur magazine: How has the reputation of franchising changed?
Fred DeLuca: I think it's improved quite a bit. Fifty years ago, people didn't know what it was. Twenty-five years ago, people knew what it was, but they were kind of uncertain as to how good franchising could be. And today, franchising is well-known and accepted.

Entrepreneur magazine: What year do you consider to be the golden age of franchising? Why?
Fred DeLuca: Actually, I think right now is the golden age of franchising, because there are a lot of choices out there for potential franchisees. There are a lot of opportunities in so many different industries ... and a lot of people who will be well-served by joining a franchise company.

Entrepreneur magazine: What one fact/event over the last 25 years improved franchising?
Fred DeLuca: The disclosure documents that are required. Back when we began franchising 30 years ago, there wasn't a required disclosure document. Sometimes there would be misunderstandings-people didn't get all the information they needed. [Those requirements] have been very helpful, because not only do franchisees get the detailed information they need, but there's also a cooling off period in the sense that they can't buy until they've had that information for two weeks. So that's been very healthy and positive for franchising.

Entrepreneur magazine: What one fact/event over the last 25 years hurt franchising?
Fred DeLuca: I don't think anything has actually hurt franchising. There has been growth in franchising-a lot of new companies have started franchising. And, as with anything, not all these new companies do well. But I don't think that's a negative. I think that's actually-netting out everything-a positive, because the innovation that that brings leads to better franchise concepts. Kind of like that Darwinian approach to franchising-the survival of the fittest. It's good for consumers and good for franchising.

On Target
A dozen no. 1 finishes is the magic number for Subway. See where they've placed since the Franchise 500� first began:
#1 12 times
#2 '92, '97, 2000
#3 '99
#4 '98
#25 '87
#73 '86
#90 '85
#124 '84
#130 '83
#170 '82
#308 '81
#219 '80
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This article was originally published in the January 2004 print edition of Entrepreneur with the headline: From Zero to Hero.

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