A few months ago at the International Franchise Association (IFA) annual conference, I had the chance to catch up with Fred DeLuca, founder and owner of Subway Sandwiches, the number one franchise on the All Business AllStar Franchise ranking for 2009. We talked about how business success does not necessarily—or even usually—happen right out of the gate.
Many entrepreneurs expect success right off the bat. Surprisingly it took DeLuca a while to recognize that Subway, now one of the most successful franchise companies in the world, was going to be a success. “When I opened the fifth store, business was so much better on day one, I had a feeling we would be able to stay in business, “ he told me. “Finally, the company I created had stabilized. Up until then, it was more a hand-to-mouth existence.”
Not many business owners would have kept expanding in the face of financial losses. But DeLuca pushed on based on a possibility. He said, “Early on I thought it might be possible to survive as a business. And for the first three years I didn’t know enough not to survive. I opened my second store because I thought it would help decrease my losses from the first store and to create the appearance of success.”
DeLuca made some mistakes right from the start. He kept expanding his nascent chain propelled by faith, patience and ignorance, a factor rarely associated with success. It’s not that ignorance is bliss, but sometimes the numbers don’t tell the whole story. If you rely solely on them, you might be discounting other positive factors, which promise success. No entrepreneur gets everything right from the start (or ever really), so make sure keep learning as you go and correct your mistakes.
In fact the very first Subway was actually named “Pete’s Submarines” after the family friend who lent the then 17-year old DeLuca $1,000 to start a business. However a radio ad promoting the restaurant made it sound like the place was called Pizza Marines, so he changed the name to Pete’s Subway. Eventually when the small chain started franchising, DeLuca shortened the name to Subway.
Check back next week to when DeLuca reveals the kind of vision entrepreneurs need to succeed.