House Lawyer Grows Subway Empire to Thousand-Plus Stores

A 58-year-old franchise owner of some 1,019 Subway shops says that costs are high, Starbucks coffee sales waning, gas prices rising; in short, it is a perfect environment for low cost sandwiches. Larry Feldman will open 60 new Subways this year mainly in non-traditional locations and start a new upscale Subway cafe concept next month that features sandwiches and a coffee bar to compete with Starbucks.

"In this economy, people can always withhold from the white-tablecloth restaurant, from the more expensive meal, and eat at Subway for $5," said Feldman, relaxing in a leather chair at one of his busiest stores, at the corner of L Street and Connecticut Avenue NW in downtown Washington. "It's an ideal time for our products. Average unit volume is up about 20 percent."

The Washington Post features Feldman Feldman's journey from lawyer to the Subway King of the mid-Atlantic in an article yesterday, Secretary of Sandwich, as well as an online video interview.

Feldman is the classic entrepreneur, a lawyer who found his niche in fast food. He came from Brooklyn and became a multimillionaire, gives generously to Democratic politicians and has a weakness for Bentleys. He has a primary home in Boca Raton, Fla., and spends summers at his residence in Vail, Colo. Feldman visits Washington for about a week every month to oversee his burgeoning empire.

Feldman obviously is top-notch when it comes to managing the franchisor relationship. Listen to Fred DeLuca, founder of Subway, a franchise system of 29,483 restaurants in 86 countries, on what qualities have brought him such a closeness with the franchisor.

He [Feldman] gets special projects, like Subway Cafe, "because he has a good team and we know he will preserve the Subway brand," DeLuca said.

". . . The reason Larry Feldman got such a huge territory was his basic answer was, 'Yes. I will do that,' " DeLuca said. "Most people say, 'I don't know if I can do that.' Some people obsess about it. He took a very top-level view and was able to immediately make a decision. It's like free land. Here is a bunch of acres for your ranch, now go do it."

Trust is obviously very important in managing the franchisor relationship. Feldman earned such trust by being bright and capable. He earned it by being successful. He earned it by speaking the Subway way. He earned it by being engaged and with having a strong relationship with the very top. In fact, it looks like he may have had DeLuca's ear from the beginning as a college buddy. 

"He wanted to turn a vacant space steps from the U.S. Capitol. . . into part of a chain of sandwich shops that were the brainchild of a buddy from the University of Bridgeport. The buddy?  DeLuca."

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Related read:

 Interview With Subway CEO about chain's double-digit growth, BrandWeek