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 Fred
Deluca is founder of Subway Sandwiches and Salads.
With over 13,000 stores in 62 countries, Subway is
thought by many to be the most successful overall
franchise system in all the world!
The Subway "system" utilizes thousands
of owners, store employees and vendors providing the
system a net worth in the billions!
Entrepreneurship at an Early Age
Fred Deluca started with a single sandwich shop in
1965 at the age of 17. He was looking for a means
to supplement his minimum hourly wages. He discussed
his thoughts with family friend, Dr. Peter Buck. Buck,
a nuclear physicist suggested a sandwich shop as such
a business had been quite successful in his home town.
Fred
knew he needed some capital to finance the shop and
Dr. Buck provided Fred with $1000 in capital and thus
the partnership was made. The shop was even called
Pete's Super Submarines after Peter Buck!
About Subway and franchising
For Fred and Peter, it wasn't a free lunch! In fact,
the first store was struggling when the 2 decided
to open a second store. This second store struggled
as well. Instead of throwing in the towel, in a bold
move many experts would think ludicrous, a third store
was opened in a highly visible location. Three was
a charm for the partnership.
 The
rest is history with the first "franchised"
store opening in Wallingford, CT in 1974. The first
international franchise came 10 years later in Bahrain,
off the coast of Saudi Arabia.
Franchising was the plan created to provide exposure
to the brand, business expansion, and opportunity
for individuals wishing to open a "business system"
themselves.
Franchising is most notably associated with large
organizations such as Subway. But each of these businesses
started with a sound product that will be nationally
and internationally sought after. Of course, there
are very successful regional franchises as well.
 The
key is the KISS principle (Keep It Simple Stupid).
A franchise system must allow an owner to "stick
to the knitting" of the business. A successful
franchisee at Subway, for example, must be able to
provide an optimum eating experience for it's customers
as defined by the guidelines of the company. While
there are costs to franchise systems, franchising
is the most successful means to start a business and
franchise systems constitute more than 42% of all
retail sales.
Quotes
"It's not necessary to be so structured in this
world. With all the people who work here (Subway),
whether you are real structured or not, it is not
going to affect how much work they do. People have
inside of them a certain work ethic, and, if you appeal
to them nicely, they'll respond and give all they
can give".
"My parents didn't deprive me but we were poor-
poor isn't the right word. Back then I don't think
there was alot of expendable income, so kids pretty
much figured out how to make their own way"
Fred did make his own way even as a youth servicing
95 of the 108 customers in his paper route territory.
"I passed by lots of doors that were not my
customers. I have to sell to these people because
it doesn't take any more time to drop the papers in
front of these doors-I'm walking by anyway".
Key thoughts for entrepreneurs
Each one of us has the opportunity to be a Fred Deluca
or Peter Buck. We can each chose to set and reach
lofty goals. Fred could not have imagined that after
store number 1, 2, or 3 that Subway would become the
enterprise it is today. Not only should we understand
our own goals but we must also be open to the passion
and entrepreneurial drive in others. Fred Deluca needed
a start to pursue his vision. Most small businesses,
including Subway was financed by friends, family,
and personal funds.
 The
true "golden nugget" of knowledge inside
the estimated $3 billion in annual sales at Subway
is the concept above - KISS principle.
simplicity....simplicity...simplicity.
A member of Let's Talk Business Network was talking
about his service business and astutely made the comment,
"I charge extra for simplicity".
Subway developed a "system" such that barrier
to entry is relatively simple compared to other franchises
and business in general. Through economies of scale,
the system is able to provide tremendous cost savings
passed on to franchisees. The cost of the franchise
was relatively low per average store. The equipment,
financing, supplies, training and more is supported
by the franchisor to give the franchisee the best
opportunity for success.
Many entrepreneurs simply spend too much time on
tasks not associated with their overall mission. When
thinking about a franchise, buying an existing business
or starting from scratch, you must consider what truly
interests you! Franchise systems for instance, are
not for entrepreneur's who want to "create".
The franchise system as a whole is a turn-key system
designed for those who enjoy the products or services
(making and selling sandwiches in this case) and desire
a business with a track record for success. Keep in
mind that franchises demand tremendous effort no different
from any other business endeavor.
The next time you walk into a franchise or a business
that has stood the test of 12-20 years such as a Subway
Restaurant, notice the similarities. Value is seemingly
provided accurately, easily and consistently. To the
trained eye, such value is learned over many years,
countless failures, experience, knowledge and intense
effort.
Books by Fred Deluca:
Start Small, Finish Big : 15 Key Lessons to Start--And
Run--Your Own Successful Business by Fred Deluca,
John Phillip Hayes
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