(Bloomberg)—Peter Buck was a nuclear physicist. Fred DeLuca, a 17-year-old high school graduate needing a $1,000 loan. Together, the pair went into the sandwich business together. Over the next five decades, they went from one store in Bridgeport, Connecticut to tens of thousands of Subway franchises in more than 100 countries.
Now the chain is potentially exploring a sale that could turn their heirs into some of America’s richest people.
A sale could attract private-equity firms and value the closely held business at more than $10 billion, Bloomberg News reported Wednesday, though the plans are still in an early stage. Subway responded that it doesn’t comment on ownership or business plans.
DeLuca, who grew up in New York, was just a teenager when he teamed up with Buck, a family friend, to open a sandwich joint in 1965 to pay for his college tuition. After Subway moved to a franchise model in the 1970s, Buck largely became a silent co-owner, according to Insider, though he stayed on the board until he stepped down before his death at age 90 in 2021.
DeLuca remained the company’s hands-on front man until he died from leukemia in 2015 at 67. His sister, Suzanne Greco, took over from him as chief executive officer and retired in 2018. The following year, Buck and the board chose former Burger King CEO John Chidsey to become the first outsider to lead the firm, with a goal to reverse declining sales and store closures.
It’s not clear just how much money the founders collected from Subway over the decades. Unlike many other restaurant chains, Subway never went public. Observers only occasionally could catch glimpses of its finances through stray public filings or select bits of information published by the company.
But some clues have emerged over the years. In a 2017 deposition, a private banker named Fran Saavedra said DeLuca collected $1 million per day in royalties in the early 2000s, Insider reported.
As to Buck, he had become one of the largest US landowners by the time of his death, according to the Land Report. In 2014, he sued the Internal Revenue Service after the agency challenged his gifting of land to his sons at a steep discount from what he’d paid just days before, a move that lowered his gift tax bill. Buck won the suit.
To contact the author of this story: Anders Melin in Kuala Lumpur at [email protected].
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