Subway Sandwiches Company History

The Subway Sandwich Company has been in business since the 1960s, and is the world's biggest sandwich chain in 2009. Subway's founders have formed Doctor's Associates Inc, a corporation whose only responsibility is to oversee Subway restaurants. DAI is the second largest restaurant management company in the world, while Subway is one of the fastest-growing franchise chains. The company has an interesting history, where smart planning and marketing over several decades have brought it to its level of success.

Company Founding

In 1965, Fred De Luca, a 17-year-old high school student from Connecticut, was looking for ways to raise money to pay for college. He was working part-time at a hardware store, and getting paid $1.25 an hour. At that rate, it was unlikely he'd ever manage to pay for school. At a family picnic that summer, a friend of De Luca's parents, Peter Buck, suggested that Fred open a submarine sandwich shop. To encourage De Luca to give the idea a try, Buck offered him $1,000 to help finance his first store. De Luca agreed and the two became partners, opening their first sandwich shop that same year.

The Company Name

In honor of Peter Buck, who provided the initial financing, the first Subway sandwich shop was called "Pete's Submarines." As they began to set up radio ads, they learned that listeners were misinterpreting the name of the store as "Pizza Marines." To solve this, they quickly changed the name to "Pete's Subway." As the store grew and other locations were added, the name was shortened simply to "Subway."

Ownership

With the success of their first store, De Luca and Buck were eager to expand their chain. By 1974, they had a total of 16 successful stores, though their goal was always to have 32 stores within their first ten years of operation. As their ninth year approached and they were only halfway to their goal, they visited with a lawyer to explore their options. The lawyer suggested franchising, and De Luca and Buck agreed. They chose their initial franchisees individually, approaching friends and family. As of 2009, the company had expanded to over 30,000 franchise locations in 90 countries.

Products

The main product at Subway stores has always been the submarine sandwich. While there are a few specialty sandwiches at regional stores, the company's menu is for the most part fixed throughout the chain. In 2001, Subway added a line of specialty rolls, allowing customers to choose from half a dozen seasoned breads. That same year, they added a specialty line of salads. In 2003, to keep up with competitor Quiznos Subs, Subway added a line of toaster ovens. This gives customers the choice of eating their sandwiches cold or toasted.

Healthy Eating

In 1999, a college student named Jared Fogle lost almost 250 pounds by eating Subway sandwiches twice a day. This diet plan was Fogle's own, and was not sponsored by the company in any way. When Subway learned of Fogle's success, they created a marketing plan around his weight loss, emphasizing the healthy aspects of Subway's sandwiches. This marketing plan gave Subway a reputation as a healthy fast-food provider, which has lead to their continued growth.

Resources

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