Fred DeLuca, the billionaire entrepreneur who founded Subway, is worried about the state of the economy and the future of small business. In addition to being the founder of what is now the largest restaurant chain in the world, DeLuca has direct access to tens of thousands of store managers and franchisees that provide valuable insight into day-to-day small business management and consumer trends.
In a recent interview on CNBC, DeLuca stated that sales are off about 2 percent at the chain and that other industry players are experiencing a similar reduction primarily due to the increase in payroll tax deductions from employee paychecks. He believes that isn’t a temporary blip but instead is a long-term trend that business will have to accept. DeLuca further indicates that his franchisees are extremely concerned about the costs of implementing Obamacare and that the current regulatory environment for small businesses is so stifling that if he had to start Subway today, instead of back in 1965, he wouldn’t be able to do it.
When it comes to the minimum wage, DeLuca believes that a small increase over time is warranted, and while it won’t affect hiring, it will lead to higher prices for consumers as employers cover their costs.
So has this negative environment dampened future entrepreneurs’ hope of starting a business? Apparently not when it comes to Subway. More than 200,000 requests for information were received by Subway last year, indicating that there continues to be robust interest in owning your own business.
Read more Finance Watch articles.
Photo: JONATHAN NACKSTRAND/AFP/Getty Images