Subway Founder: Impossible To Start Major Business in Today’s Business Climate

ANCHOR Fred Deluca joins ░░░░░░░░ at post 9 tonight ░░░░░░░░ DELUCA Good to be ░░░░░░░░ Thanks for having me ░░░░░░░░ All this discussion about ░░░░░░░░ tax increases and sequestration ░░░░░░░░ consumer angst Is it ░░░░░░░░ day to day Is ░░░░░░░░ showing up in the ░░░░░░░░ DELUCA It is Everybody ░░░░░░░░ the payroll tax increases ░░░░░░░░ caused sales to decline ░░░░░░░░ Characterize how bad it ░░░░░░░░ been and how direct ░░░░░░░░ impact and how long ░░░░░░░░ expect it to last ░░░░░░░░ I tell you I ░░░░░░░░ heard from people in ░░░░░░░░ industry they say about ░░░░░░░░ percentage points off sales ░░░░░░░░ re seeing the same ░░░░░░░░ ANCHOR Do you think ░░░░░░░░ is going to be ░░░░░░░░ that the consumer gets ░░░░░░░░ to or do you ░░░░░░░░ this is a permanent ░░░░░░░░ in spending because they ░░░░░░░░ t have that in ░░░░░░░░ paycheck DELUCA There s ░░░░░░░░ lot of pressure on ░░░░░░░░ consumers I think business ░░░░░░░░ adjust to it ANCHOR ░░░░░░░░ how Is it about ░░░░░░░░ innovation Do we keep ░░░░░░░░ at other McDonald s ░░░░░░░░ another example where people ░░░░░░░░ worried about the pipeline ░░░░░░░░ new items especially here ░░░░░░░░ the States to try ░░░░░░░░ drive traffic and keep ░░░░░░░░ under control DELUCA I ░░░░░░░░ for consumers it s ░░░░░░░░ all about value nowadays ░░░░░░░░ have limited amount of ░░░░░░░░ to spend They have ░░░░░░░░ get good value wherever ░░░░░░░░ spend their money ANCHOR ░░░░░░░░ you are at the ░░░░░░░░ end of the market ░░░░░░░░ what do you feel ░░░░░░░░ the proposal to raise ░░░░░░░░ minimum wage The NBC ░░░░░░░░ this morning says 55 ░░░░░░░░ Americans support raising that ░░░░░░░░ 9 an hour Is ░░░░░░░░ good or bad for ░░░░░░░░ business Kind of on ░░░░░░░░ sides DELUCA I think ░░░░░░░░ minimum wage has to ░░░░░░░░ up over time I ░░░░░░░░ a sharp raise all ░░░░░░░░ once is probably a ░░░░░░░░ idea You know people ░░░░░░░░ at minimum wage levels ░░░░░░░░ to make more So ░░░░░░░░ little bit of an ░░░░░░░░ makes a lot of ░░░░░░░░ to me ANCHOR Do ░░░░░░░░ pay what are your ░░░░░░░░ level workers earning DELUCA ░░░░░░░░ depends on the market ░░░░░░░░ some markets they get ░░░░░░░░ at minimum wage they ░░░░░░░░ earn 10 or 12 ░░░░░░░░ hour ANCHOR Do you ░░░░░░░░ that this would put ░░░░░░░░ on the franchisees to ░░░░░░░░ hire more if the ░░░░░░░░ wage went up DELUCA ░░░░░░░░ will cause the franchisees ░░░░░░░░ increase prices there is ░░░░░░░░ question about it Wages ░░░░░░░░ translate to price increases ░░░░░░░░ The other pressure on ░░░░░░░░ could be ObamaCare Do ░░░░░░░░ think they will expand ░░░░░░░░ in employees but no ░░░░░░░░ what is the impact ░░░░░░░░ you see DELUCA That ░░░░░░░░ the biggest concern of ░░░░░░░░ franchisees They don t ░░░░░░░░ enough information They don ░░░░░░░░ know what they are ░░░░░░░░ forward to It s ░░░░░░░░ a lot of concerns ░░░░░░░░ will also be passed ░░░░░░░░ consumers Whatever cost ANCHOR2 ░░░░░░░░ it be a big ░░░░░░░░ DELUCA a single store ░░░░░░░░ about a dozen employees ░░░░░░░░ someone who has 4 ░░░░░░░░ 5 stores would be ░░░░░░░░ ANCHOR It s been ░░░░░░░░ years since you wrote ░░░░░░░░ book Start Small Finish ░░░░░░░░ which was about grass ░░░░░░░░ entrepreneurship Do you think ░░░░░░░░ the environment for those ░░░░░░░░ are chasing the American ░░░░░░░░ by setting up their ░░░░░░░░ business has gotten worse ░░░░░░░░ better in those 13 ░░░░░░░░ DELUCA It s continuously ░░░░░░░░ worse because there s ░░░░░░░░ and more regulation and ░░░░░░░░ s tougher for people ░░░░░░░░ get into business Especially ░░░░░░░░ business If I started ░░░░░░░░ today Subway would not ░░░░░░░░ Because I had an ░░░░░░░░ time with it in ░░░░░░░░ 60s when I started ░░░░░░░░ I see a continuous ░░░░░░░░ in regulation.”