Evolving with Subway Over the Decades

Here’s a snapshot of what running a restaurant franchise looked like 30 years ago. When Todd Carpenter began developing Subways in 1990, he didn’t have the option to use a cell phone in a single country he did business in. He had to lift a trunk phone/radio to make calls from the car.

As the industry transformed over the decades, though, something from those old days didn’t. Todd is still talking to Deb about Subway. The two met at a brand convention in Hawaii at the very beginning—Deb’s family was in the industry and Todd had just become a business development agent. They became friends and consulted one another from time to time.

A few years later, Deb sold her franchise in Texas and moved to Nebraska. They married in 2003 and now own 30 Subways, as well as overseeing 170 across a large part of Nebraska and South Dakota.

Todd and Deb chatted with QSR about the journey. Very little about the business looks like it did back in 1990.

Give us the Subway love story. What do you tell people when they ask, how did you meet?

Todd: We met in 1990 at a Subway convention in Hawaii. At the time, Deb’s family was in the Subway business, and I had recently become a Business Development Agent (BDA). We first became friends and would call each other occasionally to pick each other’s brains on business and share ideas—but we really both had crushes on each other.

Deb: After several years of long-distance friendship, Todd invited me to visit Nebraska; the rest was history. I was a Franchise Owner in Texas at the time and decided to sell that business and make the move to Nebraska. Today, we own 30 Subway restaurants and oversee 170 shops across a large part of Nebraska and South Dakota.

How long have you been married?

We’ve been married since 2003.

How often do you talk about Subway at the dinner table?

Deb: Too often! We talk about the business a lot, but we also make an effort to carve out time to unplug. We recently started ordering a meal kit delivery service and have made cooking together into date night.

Go back 30 years. What amazes you most about what’s discussed at conventions today versus three decades ago? For instance, what was the biggest topic of discussion then? What is it now?

Todd: Our founder, Fred DeLuca’s, passion for the direction of the brand in these early conventions was to capture shared entrepreneurial drive in franchise owners to achieve his dream of being the No. 1 [quick-service restaurant] in every market we served. Growth yielded us buying power to achieve even greater profitability and pooled advertising. I recall how exciting it was to see our very first SUBWAY MY WAY TV ad around that time. It did take a few more years to really gain that advertising critical mass, however, looking back, that was the beginning. We got to see the front end of the growth of what I now personally believe is the greatest franchise in franchising history.

This vision meant we needed to find the very best locations and outpace other chains in store counts. Subway was a relatively small chain in 1990, by store count and overall sales volume. We needed to learn how to grow profitable sites and grow rapidly to outpace the competition.

Today, I’m proud of the organization for refocusing the brand from growth in number of locations to a laser focus on developing the franchise owner’s skill sets to run better and smarter—from profitable operation of our shops, to hiring and training staff, to how we must use technology to achieve these goals. Integrating technology into our business is the biggest difference between our earliest meetings and today.

Subway

Subway is a brand in motion these days.

People often say it isn’t easy to run a business with your spouse. How do you all make it work?

Todd: We both clearly have our defined roles. I handle leases, for example, and Deb works closely with field consultants. We trust each other to handle our individual roles but are on the same page about our ultimate goals, which is key. And, she knows how to put up with me!

This work demands tremendous dedication, and long days and hours on the road given we are in such a large, rural territory—for example, I recently traveled 900 miles to finalize a lease deal.

Deb: It’s 24/7, so you need to find time step back and breathe. We have personal passions, too – for example, Todd likes running marathons. I’ve coached soccer. We go on walks with our four dogs. Ultimately, we have the same values and goals. We’re both high achievers, always looking to do things smarter and better. So, because we have the same mindset, the same passion, it works well. And when we encounter challenges, we have each other to get through them.

I’m a military brat, so I’m used to moving around and not really putting down roots and building close relationships. Todd really is great at that, and we treat our employees and operating partners as family. Our success is their success and vice versa. We brought some of them in as franchisee partners to buy into the business, so they have a part of it and are truly invested.

What are some consumer shifts and trends you’re seeing today, from the perch of overseeing 30 restaurants?

Todd: In the neighborhoods that we do business, the biggest shift is the customers’ categorization of “value” from the price point to the experience. Looking back, when we first built our shops in these small towns in rural Nebraska and South Dakota, we were the only [quick-serve] that had a presence in the community. There are now many options for customers in the area; competition has led the customer to expect more. And our sandwich shops must deliver a full ‘experience’ to keep us top- of-mind for consumers.

We must find and develop teams to staff our shops who can serve our sandwiches with simple manners and great customer service, providing the elevated experience that our higher-average-check fast casual competition can offer.

Deb: The smallest community in which we personally own a shop has a population of just 900. These guests are using the Subway ordering app just like our guests in the towns with a population of 40,000. That guest has the same expectation for an accurate order that is ready at their desired time. We’ve learned that customers are digitally sophisticated, regardless of the population of the county.

What do you think of all the digital changes in particular?

Todd: In 1990 as I began developing Subway restaurants, we didn’t have the option to use cell phones in a single county I did business in—I used a Trunk Phone/Radio to make calls from the car. I’m only 50 years old, yet I have lived this entire evolution. The restaurant industry has completely transformed with digital ordering/loyalty/payment—it’s wonderful.

It’s crucial for me to stay abreast of the changes and master how it will be integrated into our businesses. Entrepreneurial business owners who stay on the cutting edge of all available technology will not only survive but will thrive! It’s not optional, it’s a must.

How is Subway positioned to meet this changing guest? What is the brand doing to evolve?

Todd: Subway has evolved tremendously to meet the digital needs of today’s consumer, such as rolling out a robust third-party delivery program with four different partners. That’s been really critical as delivery is booming and guests want to get what they want, when they want it, where they are.

Concerning the sandwich category specifically, where would you say the biggest market-share battle is taking place right now?

Todd: Submarine sandwiches in the 1980s might have been “Pete’s Submarines” or a similar corner deli—some white bread delivered by a route driver at 7am, Monday, Wednesday, and Friday, with just a couple types of meat and cheese (which I actually cut on a slicer in my first little 1,000 square foot shop in 1989).

Now, we are testing artisan breads and a multitude of bread ovens. Multiple types of sandwich “carriers” are being used, which are far removed from simple submarine sandwich loaves. We have some strong competitors in this segment who are also technologically sophisticated brands with cutting edge menu innovations. And in our market, convenience is king.

Creatively using any and all successful industry themes and integrating those ideas into our operation will be absolutely paramount to have our shops thrive into the next phase of our business lives. Subway not only has integrated best practices; they have been on the cutting edge with their digital platforms. That is a fact, not a biased opinion.

For prospective franchisees, what do you think is the most important thing they should consider before getting in the business?

Deb: You truly have to love what you do. This is a 24/7 business. One important lesson we’ve learned that we suggest to others who are getting into franchising is to not get into the mode of just running the business, but also taking the time to stop and assess the business. That’s been really critical to our success—to look at what can we be doing better, more efficiently, and more strategically.