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Subway Operators Blame Founder's Scandalous Behavior for Chain's Downfall

The late billionaire Fred DeLuca reportedly laid a shaky foundation that's led to Subway's drama today.

By now, it's no secret that Subway has been experiencing some trouble. While recent months have seen hundreds of Subway franchisees locking horns with the company's executives, a new report suggests that today's problems are simply emblematic of Subway's history, starting with its founder. If these insider claims are true, it seems that the fast-food chain—which became the world's biggest, based largely on its guilt-free menu and virtuous branding—was actually a soap opera behind the scenes.

The smell of Subway's bread has always been so fresh-from-the-oven, but recent reports suggest that for years, fishy business was going on inside Subways' headquarters. This, according to a new report from Business Insider, in which two unidentified sources hint that the world's biggest fast-food chain wasn't so squeaky-clean, as much of the public might believe.

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The sources reportedly told Business Insider that Subway founder Fred DeLuca, who partnered with scholar-physicist Peter Buck to create the company in 1965, was quite a character. At Subway conferences and conventions, DeLuca reportedly pursued some wives of his franchisees and was known to have girlfriends. "If you wore a skirt and had a pulse, he would chase you," one source said.

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Business Insider reports that other sources corroborated those claims. In the 1990s, DeLuca's wife stayed living at their home in Connecticut while DeLuca relocated to Florida to circumvent a law on taxes that had just been passed. DeLuca's former daughter-in-law is said to have revealed that she asked her then-father-in-law not to bring his girlfriends around his children and grandchildren "out of respect for [his wife]." Business Insider states: "DeLuca got away with 'infidelities' because his success and wealth trumped any bad behavior, even within his own family. [His former daughter-in-law] said, 'Fred could do anything that Fred wanted to do and everybody would just agree, turn their head to the other side.'"

It seems those indiscretions didn't stay confined to DeLuca's personal life. The report also states that in the year 2000, "a calendar was distributed to employees featuring partially nude male executives posing in the shower, a conference room, and other bizarre settings." DeLuca reportedly participated in several of those calendar shoots over the years, and sources have said that it made employees "uncomfortable" to receive them.

Meanwhile, some involved with the company are sharing that before DeLuca passed away in 2015 at the age of 67, he hadn't set up a succession plan. Also, after all those years he'd run Subway with an iron fist and a reportedly tight budget, the company's direction has been unclear. According to recent accounts, as Business Insider says: "Now, rumors are flying that DeLuca's widow, Elisabeth, and his cofounder, Peter Buck, are desperate to cash out and sell the chain."

Though the reports are perhaps somewhat unappetizing, it's meaty scoop that might help explain what's happened in recent years to the brand, which grew from 200 locations in 1982 to become the world's largest fast-food franchise with almost 34,000 locations in 2010.

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Krissy Gasbarre
Krissy is a senior news editor at Eat This, Not That!, managing morning and weekend news related to nutrition, wellness, restaurants and groceries (with a focus on beverages), and more. Read more