Subway: How a clueless poor kid built a billion dollar sandwich empire

Scan time: 2-3 minutes / Read time: 4-5 minutes

Hey rebel solopreneurs 🦸‍♂️🦸‍♀️

You're stuck thinking "I don't have enough money to start anything meaningful" while watching others seem to have endless capital to build their dreams.

You could be running a multi-million dollar empire that started with just $1000 borrowed from a family friend.

Here's how Fred DeLuca proved this transformation is possible when he built Subway into a $9.5 billion powerhouse with nothing but a tiny loan and massive determination.

But first, you need to hear about the moment when Fred almost threw away the keys...

🧘‍♂️ Poor kid with big dreams

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

His mom finished high school but never went to college.

His dad never even made it to high school.

At 10 years old, Fred was collecting empty bottles in their housing project, getting two cents each just to make some money.

Can you imagine being that young and already hustling?

When his family moved to Bridgeport, Connecticut, Fred had his sights set on medical school.

But reality hit hard.

His family couldn't afford college tuition, and his $1.25 minimum wage job at a hardware store wasn't cutting it.

Sound familiar?

You're grinding away at something that barely pays the bills while watching others seem to effortlessly build businesses.

Ever catch yourself thinking, "I don't have what they have"?

Little did Fred know, his broke college kid status was about to become his biggest asset...

🧩 The unexpected conversation

Summer of 1965.

Fred's parents planned a social visit to their family friend, Pete Buck - a successful nuclear physicist with a nice house and two cars in the garage.

Fred thought maybe Pete could help him figure out how to pay for college.

He was hoping Pete would just hand him a stack of hundreds and tell him to pay it back after graduation.

Instead, Pete said something completely unexpected: "You should open a submarine sandwich shop."

Fred was 17 and thought Pete was joking.

(Can you imagine your reaction if someone suggested that to you?)

But Pete was dead serious.

"You rent a little store, build a counter, buy some food, open for business, and customers give you money for sandwiches."

It sounded almost too simple.

But here's the thing... when you're desperate, simple starts to sound brilliant.

But here's where most people would have made the fatal mistake...

🎪 The $1000 leap of faith

Most 17-year-olds would have laughed it off.

"Me? Run a business? Yeah right..."

But Fred was desperate and running out of options.

Pete offered to become his partner and put up the initial money.

They made a plan right there at the picnic table: 32 stores in 10 years.

Why 32?

They'd heard about Mike's Submarine Sandwiches upstate - a guy who started with nothing and built 32 stores in 10 years.

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

(See what Fred did there? He found proof that regular people could build something big.)

Pete wrote Fred a check for $1000 and told him to get started.

College was starting in September, and it was already July.

Most people would have said they needed more time, more planning, more everything.

Not Fred.

But Fred was about to discover just how unprepared he really was...

🕵️‍♀️ Building with duct tape and determination

The next Monday, Fred borrowed his dad's car and drove around Bridgeport looking for a store to rent.

He found one right around the corner from his hardware store job.

$165 a month rent.

When the landlord mentioned needing a lease, Fred asked what that was.

"It's a document that spells out our deal," the landlord explained.

"Does it cost money?"

"Just $50, we can split it $25 each."

Fred calculated that $25 was 2.5% of his entire $1000 budget.

He told the landlord he'd take it without a lease to save the money.

The landlord agreed and handed him the keys.

Talk about bootstrapping!

Fred built the counter himself with a partition that didn't even touch the ceiling.

No fancy contractors or design consultants.

He bought used household refrigerators for ten bucks each by placing ads saying "Student needs refrigerator."

Pretty scrappy, right?

But nothing could have prepared him for what happened next...

⛳️ Almost closing before they started

Two weeks before opening, disaster struck.

Fred discovered he needed a special sink for health code compliance that would cost $550.

He didn't have the money.

Imagine the panic... you've invested everything and suddenly there's another expense you never saw coming.

Pete came to the rescue and financed it, but Fred was already learning that everything costs more than you think.

Then opening day arrived: August 28th, 1965.

Fred had an English exam that morning, so he taught a friend how to make sandwiches and rushed off to school.

When he returned, there was a line of customers out the door.

They sold 300 sandwiches and were sold out by 6 PM.

Fred thought they'd hit the jackpot.

"We've got this figured out!" he probably thought.

But those customers never came back.

Week after week, sales dropped.

They tried advertising.

Nothing worked.

By winter 1966, they were literally counting pennies in the register and didn't even have enough to pay their employee for the day.

Fred and Pete met at Fred's mom's kitchen table to figure out what to do.

Pete took out his notepad and wrote: "L T D A T A T K"

"What's that?" Fred asked.

"Lock The Door And Throw Away The Key."

They were 17 years old and about to become another failed business statistic.

Instead of quitting, they made a decision that seemed completely crazy...

🌈 The counterintuitive solution

Most people would have closed that failing store.

Fred and Pete did the opposite.

They opened a second store.

Their logic? If the first store had a bad location, they could test a better location and close the first one later.

Instead of throwing good money after bad, they were testing their hypothesis.

This time, Fred chose a spot with high street traffic and better visibility.

He'd learned from watching customers (or lack thereof) at the first location.

Something magical happened.

The second store started doing well, and somehow the first store's sales improved too.

Brand recognition was building!

So they opened a third store in September 1966.

Then winter hit again and all three stores struggled.

That's when Fred realized the business was seasonal.

People didn't want cold sandwiches in winter - makes sense, right?

But instead of panicking, he learned to work with the rhythm.

Lose money in winter, make money in summer, and plan accordingly.

Most business owners would have quit during that first brutal winter.

Fred kept opening stores.

He figured if he could survive the winters, the summers would make it worth it.

And that's when Fred discovered the secret that would change everything...

🎁 From survival to empire

By 1978, after 13 years of grinding it out, they had 100 stores.

By 1982, 200 stores.

Fred's original goal of 32 stores? Crushed.

Now he set a new goal that made everyone think he'd lost his mind: 5000 stores by 1994.

His team was dumbfounded.

"Fred's finally cracked," they probably whispered.

But Fred had learned something powerful: once you figure out the formula, it's just about scaling it up.

They had systems, training, and a proven way to make money.

They just needed to build more of them.

A lot more.

By 1987, they hit 1000 stores.

They were averaging 1000 new store openings per year after that.

Today, Subway has over 40,000 locations in 112 countries.

Fred DeLuca went from a broke college kid borrowing $1000 to building a $9.5 billion empire.

He never had an MBA, never raised venture capital, never had connections in the restaurant niche.

He just refused to quit and kept solving problems one at a time.

When cash flow was tight, he'd visit suppliers personally with his mom to maintain relationships.

When stores failed, he'd analyze why and try again.

When growth stalled, he'd pivot to franchising.

🥂 Your turn to break the rules!

Fred's "disadvantage" - having only $1000 to his name - became his strength because it forced him to be resourceful and creative with every dollar.

His willingness to start with almost nothing led to a $9.5 billion empire.

Your hunger is your edge - just like Fred proving that $1000 and determination beats endless capital and fancy plans.

Something tells me you're gonna build something amazing.

Keep zoooming 🚀🍧

Yours 'helping you build a biz with almost zero-risk' vijay peduru 🦸‍♂️