NEW YORK CITY — Subway co-founder and CEO Fred DeLuca was staring death in the face less than a year ago.
But the leukemia diagnosis that turned his life — and the future of his $19 billion, privately held sandwich chain — upside down last summer, has blinked.
His deep hazel eyes reflect the stress he's endured in the past 11 months, but in an interview on Tuesday afternoon with USA TODAY at a bustling Subway store in Midtown Manhattan, DeLuca says he's now 90% back on the job after many months away.
"I was really out of commission," he says, in his signature soft voice, referring to the bone marrow transplant he underwent last October, followed by chemotherapy, for what was then a fast-spreading cancer in his blood. In the early stages of his illness, DeLuca says, he had an emotional moment of clarity when he recognized, "This is something people can die from."
For the first several months of his illness, DeLuca says he was "zero percent" involved with the Subway business, but in the past several months, he's back to "ninety percent." Even then, he says, "like anyone with any kind of cancer, they have to keep checking up on you for the rest of your life."
But he has no plans to retire. No plans to publicly discuss specifics on an eventual successor. No plans to sell the chain or go public. No plans to do anything other than grow the 41,783-store behemoth to 50,000 by 2017.
And by some quick calculations he did on the spot, he says the chain could reach 100,000 locations worldwide within about 20 years.
"Getting to 100,000 is something a chain will do," says the 66-year old billionaire. "I don't know if we will be the first."
The chain is a rip-roaring industry success by any standards with its $5 sub deals, its glow of better-for-you offerings and more locations domestically and globally than McDonald's. But beneath that luster is a chain now facing serious issues of leadership succession, an increasingly difficult growth environment and killer competition from a bunch of smaller chains that all want to be the next Subway.
Both DeLuca and Subway find themselves at a tricky crossroads, widely watched by a highly competitive industry and a curious public.
For DeLuca, who lives in Fort Lauderdale, but typically spends most of the year on the road visiting franchisees, the question is whether he can fully resume his former pace. For Subway, which celebrates its 50th anniversary next year, the question is whether the chain can successfully take the growth formula that's worked so well domestically and extend it globally.
While Subway already is in more than 100 countries, the ongoing pace of international expansion will be three, four, even five times that of domestic growth, says DeLuca.
But growing internationally is far more complex, he says, because it can mean trying to change cultural habits. Most of Subway's international expansion potential will be in Brazil, Mexico, the U.K., India, China and Japan. But rice-based cultures such as China and Japan, he says, are far less accustomed to bread.
DeLuca could hardly have imagined any of this in 1965, when, as a 17-year-old freshman at University of Bridgeport in Connecticut, he got a $1,000 loan to open Pete's Super Submarine Sandwiches. The shop was named for Dr. Peter Buck, a physicist and family friend who loaned DeLuca the money. Buck remains a 50% owner of Subway. DeLuca says that he owns the other 50%.
Subway has been secretive about its management structure and, as a private company, doesn't have to divulge the details. DeLuca declines to specifically discuss a succession plan, other than to say, "We have a succession plan in place that's always evolving."
That plan, DeLuca says, does not include his 41-year-old son, Jonathan, who runs an investment business in Boca Raton, Fla., and is not involved with Subway.
Nor does it include Jared Fogle, the familiar Subway spokesman, who 16 years ago, lost 245 pounds on a diet of Subway subs and has starred in Subway commercials. Fogle still recalls meetings with DeLuca in 1998, when Fogle was just beginning to evolve into the face of Subway. DeLuca took Fogle to dinner and advised the then-college student to save some of the money he was making.
Then, out of the blue, Fogle says, DeLuca told him, "You've done a lot for us. I want to buy you a car." Which he did — a $25,000 Mitsubishi Galant.
"That was amazing," says Fogle. "I'd never had a car."
Like its founders, Subway has always been a "secretive company," says Malcolm Knapp, an industry consultant. The key to Subway's success is DeLuca, he says. "He is the brand. He runs it."
But in the past year, DeLuca has been "mostly invisible," notes Ron Paul, president of research firm Technomic, and the company hardly missed a beat. Says Paul, "I suspect their secret sauce is strong organization."
The organization was seriously tested last June, shortly after DeLuca visited stores in Montreal and Toronto. One moment he was at a breakfast meeting with franchisees, and the next, DeLuca recalls, he was overcome with chills and shivers. He saw a doctor in Toronto, and tests soon confirmed that he had leukemia.
DeLuca says his reaction to the diagnosis wasn't dramatic. "I said, 'Tell me what that means, and tell me what I have to do.' "
He was taken by air ambulance, back to New Haven, Conn., where treatment soon began. He was ordered by doctors, he says, "to stay away from germs," while under treatment, so he mostly stayed home.
For DeLuca, who visits up to 400 to 500 locations annually, this wasn't easy. When he visits Subway restaurants, he says, he prefers to go alone and unannounced. "I don't have people coming in advance saying, 'Fred is coming.' " He often goes unrecognized, he says.
For a guy in remission from leukemia, DeLuca has quite an appetite. For lunch on Tuesday, he polished off a foot-long with turkey, cheese and veggies that he personally made while having his photo taken. Store employees swarmed DeLuca and waited in line to pose for selfies with him.
And why not? He's an American success story. Raised in a Bronx public housing project, Forbes estimates his net worth at $3 billion. DeLuca says he doesn't know how much he's worth. But when asked what else he hopes to accomplish in his lifetime, DeLuca thinks hard, then smiles before answering. "I don't have much of a bucket list," he says. "I don't have a lot of needs and desires."
Except one. And that's been taken care of. While recuperating at home, his wife of 45 years and high school sweetheart, Elisabeth, relented on something that she's fended off for years: a big-screen TV in the middle of the house.
"I guess that's one of the benefits of being sick," jokes DeLuca. "Your wife lets you have a big-screen TV in the living room."