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Subway Founder Fred DeLuca Dies, Leaving Behind Vast Sandwich Empire

It all started with a kid from New York City who wanted to be a doctor.

Posted on September 15, 2015, at 2:14 p.m. ET

Diane Bondareff/Invision for SUBWAY / AP Images

Fred DeLuca, co-founder of the world's biggest restaurant chain Subway, died Monday night after being diagnosed with leukemia in 2013. His sister, Suzanne Greco, was named president earlier this year to run the day-to-day operations of the company.

DeLuca was born in Brooklyn, New York, grew up in public housing in the Bronx, and later moved to Connecticut. There, he started a sandwich shop in 1965 with a $1,000 loan from a family friend and physicist Peter Buck that would eventually become Subway. Only 17 at the time, DeLuca had originally started the shop as a way to help pay for college.

The restaurant, in Bridgeport, Connecticut, was called Pete's Super Submarines and it had a menu of subs costing roughly 49 cents to 69 cents. On the first day, it sold 312 sandwiches, although the store lost money when it first opened.

Still, DeLuca and Buck opened more locations, and in 1968, the partners opened the first Subway, which performed better than the other locations.

Subway / Via subway.com

Subway started franchising in the mid 1970s. This model of licensing the business to independent restaurant owners would pave the way for it to grow into a chain of more than 44,000 restaurants globally by 2015 — the world's largest fast-food franchise.

The company that owns Subway, Doctor's Associates, got its name from the fact that Buck had a Ph.D. and DeLuca aspired to be a doctor.

Many of the menu concepts Subway consumers see today started decades ago: In 1977 it launched the smaller "Snak" sub, now called the "six-inch"; in 1983, it started baking bread on-site; in 1985, it added wheat bread. The chain opened its first international restaurant in 1984 in Bahrain.

Since the 1990s, Subway has allowed franchisees to open outlets in many nontraditional locations such as gas stations, convenience stores, truck stops, and rest areas, which has helped it expand quickly. Sales growth was driven by its successful marketing of subs as a lower-calorie health food, and the $5 Footlong campaign launched in 2008 to compete with dollar menus at other fast food chains.

But all is not well at Subway, which like many old-school fast-food chains has been struggling to keep up with a new class of competition that emphasizes fresher, higher-quality ingredients. In August, the company's longtime spokesman Jared Fogle agreed to plead guilty to charges of sex with minors and distributing child pornography; the company on Friday said an internal review had found a serious complaint about Fogle was directed to Subway in 2011 but "not properly escalated or acted upon."

The company now has about 27,000 U.S. locations, with U.S. sales of about $11.9 billion. Globally, it is in 110 countries. The chain just celebrated its 50th anniversary in August.

A BuzzFeed News investigation, in partnership with the International Consortium of Investigative Journalists, based on thousands of documents the government didn't want you to see.