Secretary of Sandwich

Former House Lawyer Grows His Subway Empire to 1,000-Plus Locations

The cost of food is increasing. A slumping economy is forcing Americans to eat out less frequently. Home values are dropping. Gasoline is rising. Starbucks is shuttering stores.

And Larry Feldman -- the Subway King of the mid-Atlantic -- has just opened his 1,019th shop in the region.

Business, says the 58-year-old, is excellent.

"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."

Feldman is also going to open the first Subway Cafe, aimed smack at the Starbucks crowd. The new upscale concept, which will debut in Alexandria next month, will be a hybrid between sandwich shop and coffee bar. The stores will feature brick or wood-paneled walls, comfortable armchairs, gelato, baked goods and panini.

Feldman is planning five Subway Cafes in his territory the next couple of years.

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.

"I am blessed," Feldman said over a recent lunch at the Palm, a swanky white-tablecloth restaurant that is around the corner but, economically speaking, miles away from the closest Subway shop.

Fred DeLuca, Subway president and co-founder, said Feldman is "the largest and most successful development agent in the Subway company." He gets special projects, like Subway Cafe, "because he has a good team and we know he will preserve the Subway brand," DeLuca said. Subway, based in Milford, Conn., has 29,483 restaurants in 86 countries.

The story of how Feldman got exclusive Subway rights in this area began in 1977, when Feldman was an assistant minority counsel to the House Banking Committee. He wanted to turn a vacant space steps from the U.S. Capitol, on First Street SE next to Congressional Liquors, into part of a chain of sandwich shops that were the brainchild of a buddy from the University of Bridgeport. The buddy? DeLuca.

"I was always a frustrated entrepreneur. And congressional food is not very good, as you can imagine. In the morning, I would be at hearings, whispering in congressmen's ears. Then at lunch, I would run across the street, put on my apron, and stand behind the counter. These lobbyists who were at the hearings would look at me and say, 'You look very familiar.' Then I would take off my apron and run back across the street and continue the hearings."

The Capitol Hill Subway store quickly become one of the busiest in the chain, so Feldman took his profit and rolled it into a second store, at Andrews Air Force Base, and then a third, at the University of Virginia.