Thinking now about our conversation it’s almost unbelievable. We were just two guys at a Sunday afternoon barbecue, speculating, really, about something we knew little to nothing about. Under similar circumstances I can imagine a teenager thinking Pete’s idea was impractical, or impossible. Or another teenager might easily have shrugged him off and quipped, “Good idea, Pete, but not the idea I was looking for.”
The more Pete talked about the sandwich shop the more I could see myself opening such a shop. Pete recognized my enthusiasm and eventually said, “Fred, you sound like you’re interested in this idea. If you want to do it I’m willing to be your partner.”
Pete’s offer caught me by surprise, but it didn’t take me long to figure out it was a great opportunity for a kid from “The Projects.” Of course I was interested! Besides, I didn’t have any other ideas, or any better offers to choose from, so I said, “Sure.”
Next thing I knew Pete walked into his house and returned with a clipping from an upstate New York newspaper. It was that clipping, I would soon understand, that got him thinking about the sandwich business. We moved from the yard to the picnic table to include the other adults in our conversation. We all listened as Pete read an article that a year or so earlier featured Mike’s Submarine Sandwiches, a familiar name to all of us because when we lived upstate we had frequently enjoyed Mike’s sandwiches. The story explained how a hardworking entrepreneur named Michael Davis opened thirty-two restaurants, mostly submarine shops and a few roast beef sandwich restaurants, in ten years. He started with almost nothing and created a mini-empire in upstate New York. The reporter related some of Mike’s struggles as well as his many triumphs as king of submarine sandwiches in his part of the world. When Pete finished reading the article he looked up at us and wondered: “If Michael Davis can do this, why can’t we?”
I now know that the question didn’t come out by accident. Pete wanted to set a long-term goal beyond the opening of one store. When no one could think of a reason why we couldn’t perform as well as Michael Davis, we began discussing what we could accomplish. That’s how we set a goal to build thirty-two submarine sandwich shops in ten years!
The importance of that goal didn’t immediately register with me. I was still thinking about how to open the first store. I just wanted to get through college. I didn’t really plan to make a career of the sandwich business. But nonetheless, we set our long-range goal, and eventually the significance of those numbers would become meaningful.
During that night we also spent several hours discussing our menu. We thought Mike’s menu was a good one. It consisted of seven foot-long, cold sandwiches, and we decided to offer a similar menu. However, Pete then told us about Amato’s, his favorite sub shop in his hometown of Portland, Maine. Pete thought Amato’s sandwiches had a better taste profile than Mike’s. At Mike’s, they only put onion, lettuce, and tomato on their sandwiches, along with meat and cheese, but Amato’s included pickles, peppers, and black olives, without the lettuce. We talked about visiting Amato’s in the near future.
Amazingly, we even established the prices for our sandwiches! Like Mike’s, our prices ranged from 54 cents to 69 cents. It just never occurred to us that it didn’t make sense to set these prices before we knew a thing about our food and operating costs.
As we were getting ready to leave the Bucks’ home that evening, Pete asked us to wait for a second. He then pulled out his checkbook and he wrote a check for $1,000. That was his investment in our new venture.
On the drive back to Connecticut with my family, little did I know that if I succeeded at opening a submarine sandwich shop I would accomplish more than funding my college education. Success would mean financial independence and everything that comes with it, not just for me, but for many other people around the world. Success would mean adventure and excitement on a nonstop roller coaster that would eventually be called Subway. But on this particular ride home, I wasn’t looking very far into the future. I was thinking about the next morning when I would set out to find our first location.
Getting Started
When I tell people about my backyard conversation with Pete Buck, explaining that I had agreed to open a submarine shop even though I didn’t know how, they frequently ask me, Weren’t you afraid of failing? Failing never entered my mind. If other people had opened submarine sandwich shops I thought there was a reasonable chance I could do the same thing.
The next morning I drove my dad to work so that I could borrow his car. Pete said the first step was to find a small store, and while I really didn’t know how to do that, it didn’t take me long to find exactly what I thought we needed. It was right around the corner from United Hardware, where I was employed as a stock clerk. I called the landlord and arranged to inspect the shop on Saturday, when Pete could join me. That afternoon I reported to work at the hardware store as I did every workday until we rented the first location.
It would take a few months before Pete and I realized that I hadn’t done a very good job of finding our first location. When I looked for available shops, I just drove up and down the familiar streets without even considering other parts of town. I simply didn’t know any better. I didn’t know there were certain characteristics that made one location better than another. Consequently, I didn’t know what was wrong with the location we were about to inspect, and neither did Pete. I had worked at the hardware store for several years and never noticed the location before. I should have realized that if I hadn’t noticed the location customers would have a difficult time finding it, too.
On Saturday the landlord met us at the shop shortly before noon. We walked inside and found approximately 450 square feet of space. Pete and I were impressed: The store was clean and neat and we wouldn’t have to do much to get the place ready for business. The ceiling and tile floor were in good shape. We would have to add a counter for making sandwiches, and build a partition to block off the storage space in the back of the store, but we had already figured as much. Otherwise, the shop looked acceptable to both of us.
“What do you think, Pete?” I asked my partner in earshot of the landlord.
Pete said, “How much is it again?”
“One sixty-five a month,” the landlord responded.
Pete nodded yes. He liked it.
“Okay, let’s have a lease drawn up,” the landlord continued.
“Lease? What’s that?” I asked.
The landlord explained that the lease was a legal document that spelled out the terms of our agreement and would establish the rent at $165 a month for two years. It was a protective measure for both of us, he said, adding that it would cost about $50 to hire a lawyer to prepare the document. “We’ll split it,” he said.
Neither Pete nor I knew anything about leases, and all I could think about was the $25 that we’d have to pay the lawyer. That was 2.5 percent of our capital, and that was more money than we could afford.
“I think we’ll just take it without a lease,” I responded.
The landlord didn’t object. Of course, he was a guy with a crummy location that he needed to rent. On the spot we paid him $330, the first month’s rent and a month’s security deposit. He handed us the keys, and that’s how we rented our first store. It took about five minutes.
As soon as the landlord collected his money he was on his way and Pete and I were left to design the restaurant. That took us another five minutes. We knew we needed a spot for the cash register, space to prepare the food, a partition to block off the storage area, and a counter for customers to lay down their money. I would recruit a friend from high school to help me with the construction. Pete reminded me that we’d also need an outdoor sign, a cash register, and some miscellaneous