The North American Association of Subway Franchisees, Inc. filed suit against the franchisor of the restaurant, Doctor’s Associates Inc. claiming the recently proposed contracts negated their rights.
August 7, 2006 (Press Release) --
(CONNECTICUT) The North American Association of Subway Franchisees, Inc. filed suit against the franchisor of the sandwich shops, Doctor’s Associates Inc., on July 17, 2006. NAASF sued the franchisor on behalf of the 14,500 Subway Restaurants claiming that the recently proposed contracts negated franchisee ownership rights promised in previous contracts.
Subway franchisees fear terms of the most recent contract will not allow them to renew or transfer their franchises under their original terms of agreement, according to NAASF. They are also concerned DAI will revoke their rights to their Subway Franchise Advertising Fund Trust, the independently-run advertising program, assured to them by the 1990 Trust Agreement.
Under the original agreement, franchisees funded the advertising program and elected franchisees as trustees who controlled the allocation of the advertising dollars. The new agreement gives the Subway franchisor complete control of the funding.
With further legal action pending, franchising expert Joe Mathews, author of Street Smart Franchising (Entrepreneur Press, July 2006), says it’s more than a legal issue. “A successful franchisee-franchisor relationship isn’t a business relationship; it’s a deeply committed personal relationship built on a foundation of trust. When that trust is violated, both parties will divert time, money and energy away from achieving their mutual goal of driving revenues and building the brand towards fighting each other. When you consider the amount of money which is at stake and the number of lives impacted with a company the size of Subway, if the franchisees and franchisor go to war, it will be a blood bath.”
“Subway founder Fred Deluca has done more for franchising than any other person, living or dead. He practically invented a food category called ‘sandwich shops’ and probably helped create more millionaires than any other franchisor in history. The chain has experienced 20 years of exponential growth. It would be a shame to break what doesn’t appear to be broken.”-Joe Mathews, author of Street Smart Franchising & CEO of The Franchise Performance Group.
Mathews can discuss:
• Why NAASF is suing the Subway franchisor
• What those looking into franchising can learn from Subway
• The unique relationship between franchisees and franchisors
• “Street smarts” for making it in the franchise game
Mathews is founder and CEO of The Franchise Performance Group. As a franchise executive, he has worked with Subway and several other thriving companies such as Blimpie, Motophoto and the Entrepreneur Source. In his new release, Street Smart Franchising (Entrepreneur Press, July 2006) which he co-wrote with former International Franchise Association (IFA) President, Don DeBolt and franchise development expert Deb Percival, the authors take an in-depth, look at the naked truth about franchising from the inside-out. The authors offer an in-depth look into what happens during the investigation and ramp up of a franchise business as well as “real world” tactics and strategies for succeeding in franchising. They also demonstrate how humanity impacts franchising.
Subway franchisees fear terms of the most recent contract will not allow them to renew or transfer their franchises under their original terms of agreement, according to NAASF. They are also concerned DAI will revoke their rights to their Subway Franchise Advertising Fund Trust, the independently-run advertising program, assured to them by the 1990 Trust Agreement.
Under the original agreement, franchisees funded the advertising program and elected franchisees as trustees who controlled the allocation of the advertising dollars. The new agreement gives the Subway franchisor complete control of the funding.
With further legal action pending, franchising expert Joe Mathews, author of Street Smart Franchising (Entrepreneur Press, July 2006), says it’s more than a legal issue. “A successful franchisee-franchisor relationship isn’t a business relationship; it’s a deeply committed personal relationship built on a foundation of trust. When that trust is violated, both parties will divert time, money and energy away from achieving their mutual goal of driving revenues and building the brand towards fighting each other. When you consider the amount of money which is at stake and the number of lives impacted with a company the size of Subway, if the franchisees and franchisor go to war, it will be a blood bath.”
“Subway founder Fred Deluca has done more for franchising than any other person, living or dead. He practically invented a food category called ‘sandwich shops’ and probably helped create more millionaires than any other franchisor in history. The chain has experienced 20 years of exponential growth. It would be a shame to break what doesn’t appear to be broken.”-Joe Mathews, author of Street Smart Franchising & CEO of The Franchise Performance Group.
Mathews can discuss:
• Why NAASF is suing the Subway franchisor
• What those looking into franchising can learn from Subway
• The unique relationship between franchisees and franchisors
• “Street smarts” for making it in the franchise game
Mathews is founder and CEO of The Franchise Performance Group. As a franchise executive, he has worked with Subway and several other thriving companies such as Blimpie, Motophoto and the Entrepreneur Source. In his new release, Street Smart Franchising (Entrepreneur Press, July 2006) which he co-wrote with former International Franchise Association (IFA) President, Don DeBolt and franchise development expert Deb Percival, the authors take an in-depth, look at the naked truth about franchising from the inside-out. The authors offer an in-depth look into what happens during the investigation and ramp up of a franchise business as well as “real world” tactics and strategies for succeeding in franchising. They also demonstrate how humanity impacts franchising.
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