View From the Top

The Rise to Success

This all-for-one attitude makes sense when looking at Subway's rise to success. DeLuca notes that he didn't necessarily set out to make Subway the number-one franchise in the world. "I was focused on understanding how much we could accomplish," he explains. "What I would always do is say, 'OK, what's possible five years from now? Ten years from now? How many stores might we have? What rate of growth is attainable?' It was like the art of the possible-trying to figure out what's possible and going ahead and doing it."

The lure of possibility that helped Subway claim the top spot in our Franchise 500® for the 13th year and counting is the same driving force that will build the system's future. DeLuca notes that one long-term goal that Subway hopes to achieve by 2010 is growing to 30,000 locations worldwide. In addition, Subway has opened regional offices around the world to spark international growth, and hopes to grow to 7,500 international stores by 2010.

The domestic agenda is a continual focus on individual store profitability as well as adding stores in nontraditional locations such as convenience stores, airports, hospitals and schools-Subway already touts about 4,300 of these nontraditional units.

While DeLuca confesses that the Subway team feels pressure to maintain their tradition of excellence, he notes that the company's strength is largely due to the franchisees. "It's the entrepreneurial spirit of the franchisees," says DeLuca. "It's a bit like representative government; it's a system of a lot of people working together, making a lot of decisions, doing some things incorrectly but making more right decisions than wrong ones."

Subway's decisions on distribution and growth have had a large impact on the franchising community as a whole. "With so many outlets in so many places, we give people a different perspective on distribution and [on] how large a company can become," DeLuca says. "The distribution patterns we're following create new learning [models] for other people."

Learning, growth, possibility, goal-setting-it's the way DeLuca is shepherding Subway into the 21st century. And why not? It is, after all, his personal philosophy as well. "After 39 years of business, I'm still learning. I go through this every year-identifying new strategies that are extremely important. And when you're finally ready to invent it, you hit yourself in the head and say, 'Why didn't I do that before?'" he says. "I'm amazed that, wow, we've really accomplished a lot, and I'm also amazed at how much more there is to learn all the time." Spoken like a true king.

Way to Grow

Over the years, Subway has grown by leaps and bounds to become the No. 1 franchise. See how the company's franchise numbers have increased since 1979.

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This article was originally published in the January 2005 print edition of Entrepreneur with the headline: View From the Top.

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