Subway founders’ heirs could join U.S. richest ranks in $10B sale deal

Subway founders’ heirs could join U.S. richest ranks in B sale deal

The late co-founders of Subway, Fred DeLuca and Peter Buck, envisioned a few decades ago that their sandwich shop in Bridgeport, Conn., would become one of the largest restaurant chains in the world. But now, their heirs will become some of the richest people in America.

The sandwich giant is exploring a sale that could value it at more than $10 billion and has kept advisers with that in mind, according to the Wall Street Journal, citing people familiar with the situation.

A Subway spokesperson wrote to Fortune, “As a privately held company, we do not comment on ownership structure and business plans. We remain focused on moving the brand forward with our transformational journey to help our franchisees be successful and profitable.”

In 1965, a teenage DeLuca asked Buck, a family friend and nuclear physicist, for advice on financing his college education, according to Insider. This prompted Buck to loan him $1,000 to open a sandwich shop—a move that eventually made both billionaires.

DeLuca led the company for decades as it expanded rapidly in the US and internationally. Buck became a silent co-owner after the company switched to a franchise model in 1973.

From its humble beginnings as a Pete’s Super Submarines store—which actually paid for DeLuca’s University of Bridgeport education—the company went on to dwarf McDonald’s (and every other restaurant chain) in terms of number of U.S. outlets. Its roughly 21,000 domestic locations recorded $9.4 billion in sales in 2021, up 13% from 2020, and it had about 37,000 stores worldwide, according to the Journal.

Subway has always remained a private business with two families behind the scenes. After DeLuca was diagnosed with leukemia — he died in 2015 at age 67 — his sister Suzanne Greco became CEO, until she retired in 2018.

In 2019, the company finally brought in an outsider, choosing former Burger King CEO John Chidsey to take the helm.

According to the Gazette’s sources, a sale of Subway could attract both private equity firms and corporate buyers.

Because Subway never went public, its finances — and how much money went to DeLuca, Buck and their relatives — have never been open to public scrutiny.

But as Bloomberg reported Thursday, hints have popped up here and there. Buck, by the time of his death at age 90 in 2021, had become one of the largest landowners in the US, and he won a fight with the IRS over gifting the land to his sons at a steep discount.

DeLuca collected $1 million a day in royalties in the early 2000s, according to a filing by banker Fran Saavedra in 2017, as reported by Insider. He remained frugal with all his wealth, to the surprise of some relatives.

Now, if a sale of the company happens, both men’s families could become significantly richer. It’s unclear who in the family is in line to receive a windfall, but DeLuca, for one, is survived by his son Jon, who serves as director of the Frederick A. DeLuca Foundation and, according to an article in 2021 in Fort Lauderdale Illustrated, is raising children with TV personality Kavita Channe.

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