Subway : 9 spicy lessons on how a clueless poor student built a sandwich empire

Scan time: 3-4 min / Read time: 5-7 min

Hey rebel solopreneurs 🦸‍♂️🦸‍♀️

Think you're not ready to start your business? That voice in your head saying "I don't know enough yet"?

Here's your secret weapon: being completely clueless is actually your advantage.

Meet Fred DeLuca who knew absolutely nothing about business when he started Subway at 17 with a borrowed $1,000.

His parents never finished high school, he never worked in restaurants, and he didn't even know what a rental agreement was.

But how do you turn knowing absolutely nothing into a billion-dollar empire when people are telling you it's impossible?

🍹 The humble beginnings...

Fred DeLuca was born in 1948 in Brooklyn to second-generation Italian immigrant parents.

His mom finished high school but never went to college.

His dad never even made it to high school.

At age 10, Fred was already hustling - collecting empty bottles from his housing project and turning them in for two cents each.

When his family moved to Connecticut, he took a paper route to make money.

After high school, Fred wanted to become a doctor but his family couldn't afford medical school.

So he enrolled at Bridgeport University as a psychology major instead.

To pay for college, he worked at a hardware store making $1.25 minimum wage.

But the paycheck wasn't nearly enough to cover his expenses.

That summer of 1965, his parents planned a visit to see their old family friend Pete Buck.

Pete was a nuclear physicist at General Electric - successful, well-off, with his own house and two cars.

Fred figured Pete might have some advice for a broke college kid.

What Pete suggested next would change everything about Fred's life...

🤔 The desperate brainstorm

When Fred asked Pete for advice on paying for college, he expected maybe a loan or financial help.

Instead, Pete casually suggested: "You should open a submarine sandwich shop."

Fred thought Pete was joking at first, but Pete was dead serious.

Within five minutes of conversation, they'd sketched out an ambitious plan: 32 stores in 10 years.

They weren't picking random numbers - they'd heard about another guy named Mike who built 32 sandwich shops in a decade.

If Mike could do it, why couldn't they?

Pete handed Fred a $1,000 check and told him to get started.

Fred had two months before school started and zero restaurant experience.

But turning a casual suggestion into reality would test everything...

🏚️ The crumbling foundation

Fred's first store was bleeding money faster than he could count it.

After months of declining sales, he sat in his mom's kitchen with his partner Pete, staring at a cash register that couldn't even cover one employee's daily wages.

Pete wrote down "L T D A T A T K" on a napkin - "Lock The Door And Throw Away The Key."

Most people would've called it quits right there, but Fred had a crazy idea instead.

Instead of closing the failing store, he decided to open a second one.

Wait, what?!

What happened next changed everything about how he thought about failure...

🎯 The visibility breakthrough

Fred realized his first store had a fatal flaw - terrible location.

Hidden behind a shopping center, customers couldn't even find him.

Picture this: you're selling the world's best sandwiches, but nobody knows you exist. Frustrating, right?

For his second store, he picked a spot with heavy street traffic and a storefront people could see.

The moment customers could actually see his store, sales started picking up.

He learned that being seen is half the battle - if people don't know you exist, your product doesn't matter.

But just when things looked promising, he discovered a problem that nearly destroyed everything...

🕵️ The accidental spy mission

Here's the crazy part - Fred's car broke down and a stranger gave him a ride.

The guy pointed to Fred's store and said "Great sandwiches, plus you can get free soda!"

Fred was confused - they charged for soda.

The stranger explained how he'd steal sodas while employees made sandwiches with their backs turned.

Can you imagine? Fred had accidentally created a theft problem that was killing his profits.

One simple conversation revealed why his numbers never added up.

This lesson taught him something crucial about running multiple locations...

🧪 The research mission

Instead of guessing what customers wanted, Fred and Pete became sandwich shop spies.

They drove around visiting every successful sandwich place they could find.

They studied everything: ingredients, seasoning amounts, customer flow, pricing, even how much sauce each place used.

Fred even drove to Maine to study Amato's - Pete's childhood favorite sandwich shop.

They basically figured out what the competition was doing instead of trying to invent everything from scratch.

This research gave them things that already worked rather than costly trial and error.

But even with great research, cash flow was still brutal...

❄️ The cash flow wake-up call

Fred discovered his sandwich business followed a brutal pattern - bleeding money despite having customers.

Every winter, sales dropped and he lost money across all stores.

But here's the thing - this forced him to identify must-haves versus nice-to-haves.

He learned to strip everything down to the basics: great product, visible location, and paying customers.

When you're broke, you can't afford to waste money on things that don't actually make money.

This harsh reality became his greatest teacher about what really matters.

But surviving wasn't enough - he needed lifelines...

🤝 The relationship lifeline

Here's what's wild - Fred couldn't afford to pay his suppliers on time.

Instead of avoiding them (like most people would), he and his mom visited every vendor personally each Friday.

They'd bring partial payments and chat for 10 minutes about life, not just business.

These vendors knew Fred personally and trusted he'd eventually pay in full.

Those relationships kept him alive when money problems would've killed other businesses.

Personal connections became his credit line when banks wouldn't touch him.

Years later, when growth stalled, he discovered an expansion method that changed everything...

🚀 The accidental franchise formula

After 8 years, Fred was behind his goal of 32 stores by year 10.

He couldn't keep track of stores far away with not much money or help.

When his friend Brian lost his corporate job, Fred offered him a simple deal: "You can have the store near your house, I'll finance it, and if you don't like it, I'll take it back."

Brian became their first franchisee with no contracts, just trust.

This "franchise-lite" approach let Fred grow without tons of money or complicated contracts.

Simple, right?

The results of this simple approach were beyond anything he imagined...

🎯 The impossible goal that worked

When Fred had 200 stores, he announced his next goal: 5,000 stores by 1994.

Everyone thought he was completely crazy - that was 25 times bigger than their current size.

But Fred's logic was simple: they already knew how to run 200 profitable stores.

The formula worked - they just needed to repeat it at huge scale.

Having an "impossible" goal forced his team to think totally differently about growth.

They hit 1,000 stores by 1987 and never looked back. Bingo!

The transformation from that struggling teenager to billionaire was complete...

💰 The epic win

That 17-year-old kid who couldn't afford college tuition built something extraordinary.

Subway grew to over 40,000 locations across 112 countries, becoming the world's largest submarine sandwich chain.

Fred became a billionaire and proved that starting with nothing can be your greatest advantage.

The company that began with a $1,000 loan now generates over $9.5 billion in yearly revenue.

🥂 Your turn to light it up!

That's it, my fellow rebels!

Fred's transformation proves that clueless beginners often outperform people with tons of experience.

Your lack of experience isn't holding you back - it's your secret weapon against people who overthink everything.

I'm pretty sure you're gonna catch everyone off guard.

Let the good times roll for you! 🍨

Yours 'making your crazy dreams real with almost zero risk' vijay peduru 🦸‍♂️