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Secretary of Sandwich
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"It was really about going where the customers were," he said. "Huge military bases. Huge universities. So we had captive audiences and a clientele that was made for the sub sandwich sector. Sandwiches were literally a couple of bucks, back in the day."
Feldman now owns the rights to the District, Maryland, Delaware and Virginia territories and is responsible for finding franchisees to start every Subway shop.
DeLuca said Feldman's success is rooted in his desire to take on more.
"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."
They call the model the development agent concept, and it is designed to relieve the central office of sales and development and ensure the stores maintain levels of quality and profit.
"We find the franchisee, then we take them through the entire process, assisting in construction, development of plans, education, training," said Alan Warmund, the day-to-day operations executive for Subway Development of Washington. "Unlike other companies where they sell the franchise and disappear, we are required to do monthly inspections and evaluate food quality, preparation, services, marketing and advertising. Our income and my profit is based on the individual franchisee. If they do well, we do well. It's the beauty of this system."
But in the beginning, Feldman's mother wasn't sold.
"When I decided to leave the Hill, I called my mom," Feldman said. "Remember, I was the first in my family to go to law school. So I called my mom in Brooklyn and I say, 'I am no longer your son the minority counsel to the House. Now I am going to be your son the sandwich maker.' And I could hear the screaming all the way from Brooklyn."
By 1988, he owned 200 stores. By 2001, he ran 650.
Mom changed her mind after Feldman bought her a condominium in Florida.
Not every Feldman venture has been a home run. Feldman, whose father was a hair stylist, in 2000 launched a chain of specialized hair color and style salons called Haircolor Xpress. Starting in Florida, the company opened 70 stores and sold the rights to 200 franchises before Feldman sold out in 2003 to another group. He broke even on his investment and still owns two hair salons, in Boca Raton and Fort Lauderdale.
Warmund said the hair salon idea was distracting Feldman from his profitable Subway franchises. "It was more work than he anticipated and not worth the time," Warmund said. The chain fizzled out under the new owners.
