How Will Subway Scandal Affect Fort Lauderdale Billionaire Fred DeLuca?
Fred DeLuca, Fort Lauderdale resident and cofounder of Subway, has seen his fair share of controversies hit his sandwich-chain empire, from Hepatitis A contaminations and trademark court battles to questions about what the sandwiches are made from to the supposed false claims that the subs are actually 12 inches long. But nothing has rattled DeLuca's restaurant's cage quite like the latest controversy tied to his now-former spokesperson, Jared Fogle — the guy who became famous for losing hundreds of pounds merely from eating Subway sandwiches — who is currently being investigated by the FBI for child pornography.
DeLuca began his empire way back in 1965 in Connecticut when a family friend loaned him $1,000 to start it up. The business venture failed, but DeLuca opened another shop and dreamed of challenging McDonald's and other mega-fast-food joints by envisioning 32 shops within ten years. By 1978, Subway had its 100th store. By 1987, its 1,000th. The next phase is to have 50,000 by 2017.
More important, Subway has ingrained itself in American popular culture, with its "Five Dollar Foot Long" jingle and its "Subway, eat fresh" tag line. But it all began with Fogle, who became the face of the chain's healthier alternative to other fast-food restaurants. Fogle, who was once obese, was noticed by the company after a 1999 Men's Health article titled "Stupid Diets That Work" featured his eating nothing but Subway sandwiches to lose weight. Fogle was swooped up as the spokesperson and traveled the country with a pair of his old 62-inch pants to show how much weight he'd lost. Fogle became a wealthy man as Subway's face and was awarded a black card by the company, giving him free access to any Subway restaurant in the world.
Meanwhile, with its success, Subway began to take some hits in the public eye.
Most notably, when it was revealed that the restaurant's breads had been made with azodicarbonamide, a food additive that is also used for making foam plastics, such as yoga mats. More controversy hit DeLuca's company when Subway was sued for lying about the size of its 12-inch-long subs. Both incidents left a black public eye on the company, with Subway forced to release statements copping to their mistakes and pledging changes.
But the Fogle investigation is the darkest of the controversies. Since news of Fogle being investigated broke, Subway has cut off all ties with him and essentially wiped away any mention or reference of its 62-inch-pants-owning spokesman from the company's website.
Still, it's not like there weren't any red flags for DeLuca and his Subway co-owners, Doctor’s Associates, about Fogle.
Photo by Andrevruas via Wikimedia Commons
According to Gawker , Fogle was widely known in college for owning a porn-lending library. In fact, the Gawker article alleges that the reason Fogle ate nothing but Subway was because a chain opened up just below his apartment, allowing him easy access to food while he stayed home running his "black market" rent-a-porn business. Then, earlier this year, Fogle's Jared Foundation director, Russell Taylor, was arrested on charges of child exploitation, possession of child pornography, and voyeurism. Taylor would later attempt suicide in his jail cell.
On Tuesday, authorities revealed that Fogle's investigation included "commercially made child pornography from Eastern Europe similar to that seized on other investigations" and "revealed a document file with Taylor's employer listed in the file name."
So, as questions arise over whether Fogle can "weather the storm" of this investigation, the same question should be posed about DeLuca.
How will this all affect Subway and the Fort Lauderdale billionaire?
Of course, profits are likely to take some kind of hit. But DeLuca has proven to be a tough character. Not only from the beginning, when his first sub shop failed and made him more determined, but also recently, when DeLuca came back from the brink of death after having been diagnosed with leukemia in 2013. During his diagnosis, there were doubts about Subway's future, with DeLuca having to focus all his time on battling cancer. But in 2014, he announced that he had no plans to retire and was back to being "90 percent involved" with Subway's day-to-day operations.
In 2013, DeLuca announced that he had partnered with Palm Beach County developer Anthony Pugliese to develop Destiny, a 41,000-acre development in Central Florida. The development was to be "America’s first eco-sustainable city,” and DeLuca invested $111 million to get it off the ground. The project has yet to get anywhere, and in 2014, Pugliese was arrested on charges that he faked invoices to defraud DeLuca out of $1.2 million.
As of right now, DeLuca's net worth is at $2.7 billion.
An email to DeLuca asking for comment on this story has yet to be returned.
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