International Law

Unhappy Subway Franchisee

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Interesting letter to Bob Purvin, the Chair of the AAFD, posted at BMM:

"I am a multi-unit Subway franchisee, writing to you with hope that you will kindly offer me some common insight. 

I have been in the dark. 

I'm certain I'm not the first who has been at your door step.  

As you might guess, I am dealing with gross encroachment. 

I have successfully fought off three previous attempts, but have recently lost the battle over a proposed Walmart site. 

I will spare you the rest of the particulars since, the fact is, I am aware that I signed an agreement, and thus understand that, on my single issue at least, I appear to have no further recourse."

The multi unit owner goes to note that

"The Franchise agreement points out risk of competition, even from within, but it does not point out the certainty of such relative to its goal of indefinite, aggressive growth. In doing so, DAI has, in my opinion deceived, not some, but all of us.

From the outside, one would look at Subway's growth over the years as impressive, and as a sign of success--certainly a sound investment. It is not until one is on the inside, until after one is invested, however, that one can truly grasp the gross manner in which Subway has multiplied and intends to continue doing so."

Again, this points out the value of a sophisticated franchise attorney - someone who will do more than read the contract back at you.

Subway's aggressive expansion is well known. Their litigation style is also well known.

If you are going to be an multi unit operator, then you had better get some amendments to your franchise deal - otherwise you are going to get run out of town.

If you can afford a number of units, then you can afford proper legal representation. (I will also bet the this franchisor has cross-default clauses.)

Full post as published by Misleading Advertising Law on July 21, 2008 (boomark / email).