(Fortune) - The late co-founders of Subway, Fred DeLuca and Peter Buck, had little inkling decades ago their sandwich shop in Bridgeport, Conn., would grow into one of the world’s largest restaurant chains. But now, their heirs stand to become some of the richest people in America.
The sandwich giant is exploring a sale that could value it at more than $10 billion, and has retained advisors with that in mind, according to the Wall Street Journal, citing people familiar with the situation
A Subway spokesperson wrote to Fortune, “As a privately held company, we don’t comment on ownership structure and business plans. We continue to be focused on moving the brand forward with our transformational journey to help our franchisees be successful and profitable.”
In 1965 a teenaged DeLuca asked Buck, a family friend and nuclear physicist, for advice on funding his college education, according to Insider. That led to Buck lending him $1,000 to start a sandwich shop—a move that eventually made both men billionaires.
DeLuca ran the company for decades as it rapidly expanded in the U.S. and internationally. Buck became a largely silent co-owner after the company switched to a franchise model in 1973.
From its humble beginnings as Pete's Super Submarines shop—which did indeed pay for DeLuca’s University of Bridgeport education—the company went on to dwarf McDonald’s (and every other restaurant chain) by number of U.S. outlets. Its roughly 21,000 domestic locations registered $9.4 billion in sales in 2021, up 13% from 2020, and worldwide it had about 37,000 stores, according to the Journal.
Subway has all along remained a private business with two families behind the scenes. After DeLuca was diagnosed with leukemia—he died in 2015 at 67—his sister Suzanne Greco became CEO, until she retired in 2018.
In 2019, the company finally brought in an outsider, picking former Burger King CEO John Chidsey to take the helm.
According to the Journal's sources, a sale of Subway could attract both private equity firms and corporate buyers.
Because Subway never went public, its finances—and how much money went to DeLuca, Buck, and their relatives—have never been open for public scrutiny.
But as Bloomberg reported Thursday, hints have emerged here and there. Buck, by the time of his death at age 90 in 2021, had become one of the largest U.S. landowners, and he won a tussle with the IRS over gifting land to his sons at a steep discount.
DeLuca collected $1 million per day in royalties in the early 2000s, according to a deposition from banker Fran Saavedra in 2017, as reported by Insider. He remained frugal despite his wealth, to the consternation of some relatives.
Now, if a sale of the company comes to pass, the families of both men could become substantially wealthier. It's unclear who in the families are in line to receive a windfall, but DeLuca, for example, was survived by his son Jon, who serves as director of the Frederick A. DeLuca Foundation and, according to a 2021 article in Fort Lauderdale Illustrated, is raising children with TV personality Kavita Channe.
This story was originally featured on Fortune.com
By Steve Mollman
