World of Franchising - SUBWAY & NAASF

A discussion of issues affecting franchisee operators in the Subway franchise system and how the system may be improved. If you have any comments and wish to contribute to this web page; feel free to email the author.

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Location: Canada

My background is in Research and Development (Science) as well as Economic Development (Business). Currently managing my own businesses. My degree; B.Comm, Finance Major.

Sunday, April 25, 2004

Just a few points and observations to ponder:

"An arbitration clause may not be an invincible shield against class action litigation, but it is surely one of the strongest pieces of armor available to the franchisor."
  • American Bar Association

  • "I'd just like to basically say that, with the Franchise Rule as it is now, I think it is wrong that this FTC rule is not enforced as I feel properly. Subway in fact itself after admitting on several occasions that they were violating the FTC Rule, was able to avoid prosecution from the FTC, which sends a signal to all franchise opportunities out there in America that the FTC has no teeth, no courage, or no ability. The way it is right now, requiring franchisees to sign away all of their legal and constitutional rights is not fair to the franchisees. And evidently it seems to be a serious problem all across the board because why are so many franchisees filing class action suits in the majority of the franchise concepts, which is taking place.

    I would hope that the FTC would require that the franchisor play fair, and if these issues were addressed, then we wouldn't have the problems in the franchise industry that we have today.

    I would appreciate the support of the FTC to either uphold and pursue violations when they take place or either abolish the Franchise Rule, the FTC Rule, altogether and give franchisees the right to bring the franchisor into court when they participate in the abuses that they do."
  • Mike Johnson, a Subway franchisee

  • "It's not necessary to be so structured in this world. With all the people who work here (Subway), whether you are real structured or not, it is not going to affect how much work they do. People have inside of them a certain work ethic, and, if you appeal to them nicely, they'll respond and give all they can give".
  • Fred Deluca

  • And then there is our staff (what they really think?):

    "Anyway, the trials and tribulations of subway work politics is a little off-topic, so we'll now move on to the tale of my first idiot customer. I was out the back of the store, doing nothing, as we often did, when the door buzzer went off, as it does. Al and his well trained side-kick who I was working with tonight immediatly shouted "SHOTGUN NOT". Apparently this indicated that they could not be bothered from their eating and newspapers to serve, so it was left up to me. I made my way out to the front where I began to set up the work bench as I greeted the customer. The customer was about thirtyish, with two adorable little brats. He stared at our various signs posted around about our different deal and such, and slowly deciphered some kind of sense from them, and formulated that into an order. I took the order and began making the sub, then as I cut open the bread, I asked If there would be other subs being ordered tonight for his kids. This was quite possibly the stupidest action I have ever undertook. He launched himself into a thirty minute speach about how his snotty little shits are allergic to everything from Acorns to Zylene as they ran about behind him attempting to destroy the postmix machine, the drink fridge, the straw dispencer and the potato chip rack. All I could do, being the polite numb nut that I am, was nod and smile and tell him that his sugestions that we do away with normal gluten conating bread and replace it with some freak-o bread would be brought up at the next staff meeting. This guy was the first paying asshole I ever had to serve, but he sure wasn't the last."
  • Submitted by Despiadado, a Subway employee

  • And then there are our franchisees (funny if it was not so sad): "When local Oneonta, NY firefighters became dehydrated while snuffing a fire down the street one hot night in August, thoughtful Subway restaurant employees gave them some of the restaurant's cold water. About four cases, it turns out. They even called their owner during the late hour to get his permission, which he granted.

    Next thing your know, the thoughtless owner (perhaps by some misguided desire for profits) told the good Samaritan employees they'd have to pay him for the water they gave to the firefighters. While the initial gift of water did not make the news, the "take back" attitude of the franchise owner hit the local paper - big time!"
  • Thompson Group on a case study

  • And to conclude for tonight:

    "Another manager of a Subway Restaurants franchise in Edmonton has come forward with a complaint of religious discrimination, alleging an official of the sandwich chain refused to let him wear his turban while serving customers.

    The complaint is the second made public recently by Sikh Subway franchisees and managers against Dan Mohan, the sandwich chain's development agent in Calgary. Mr. Mohan has not returned several calls.

    Harminder Pandher said Mr. Mohan was discourteous, made fun of his religion and told him he could not wear his turban, a key article of his Sikh faith.

    "I did the training course in Connecticut [Subway head office] with the turban on and worked in stores there and never had a problem," said Mr. Pandher, 41, who managed a store owned by his wife.

    "Then in the year 2000, I was told I must wear Subway visors or baseball caps. I said, 'Why is this coming up now?' "

    Mr. Pandher decided to air his complaint publicly after Hardip Singh Brah, another Sikh franchisee in Edmonton, made his religious-discrimination case public earlier this month.

    Mr. Brah complained that Mr. Mohan referred to his turban as a "diaper on his head," and filed a complaint with the Alberta Human Rights Commission. Mr. Mohan has denied making the derogatory remark.

    Subway requires employees who wear turbans or other religious coverings to apply in writing for waivers of the company dress code, a policy that Mr. Brah and Mr. Pandher say is discriminatory and infringes on their freedom of religious expression.

    "The waiver policy is neither necessary nor fair," said Mr. Pandher, who is considering filing a human-rights complaint as well. "On the one side, Subway is claiming to be an international company. I should be able to wear my turban without special permission."

    The Pandher family decided to buy Subway franchises in the 1990s. Mr. Pandher's wife purchased two Subway outlets in 1998 and 1999, and the couple travelled to Connecticut for training.

    Mr. Pandher was permitted to wear his turban in Connecticut and in Edmonton until May, 2000, when a field representative cited him for being "out of compliance." He was not wearing the requisite company baseball cap.

    Mr. Pandher says he attempted to resolve the matter for more than two years, leaving several telephone messages with Mr. Mohan and finally travelling to Calgary to see him in person in the spring of 2003.

    "They were very rude to me," said Mr. Pandher, who finally hired a lawyer. "This has been very frustrating for me. I was scared to work in my own stores." The family ended up selling the two Edmonton stores, and Mrs. Pandher bought another one in High Level, Alta.

    Mr. Pandher's lawyer, Barinder Pannu, wrote a letter to Subway in March of this year outlining the "denigrating and humiliating" attitude of company representatives in Calgary:

    "Finally, I come to the not-so-subtle message which is being conveyed to Mr. Pandher that his wearing a turban is contrary to the dress policy of the company," Mr. Pannu wrote.

    He noted that his client did not feel he had to make a special request to wear his turban as "the exemption already exists in law."

    David Cousins, a Subway lawyer in Connecticut, responded two months later that he would treat the letter as Mr. Pandher's waiver request: "This letter may be used as a grant of the uniform waiver to him," he wrote.

    Kevin Kane, a Subway spokesman in Connecticut, said the company's uniform-waiver policy worked well until the two recent complaints from Edmonton.

    "The point of the policy was to make things easier, not make life difficult for people," Mr. Kane said.

    "I'm not sure if this is pushing up the need to review the policy. Someone will probably take a look at it."

    He said franchisees' disputes with local Subway development agents may be resolved through the company's head office, which has the ability to suspend or discipline the agents.

    He could not say whether Mr. Mohan has been disciplined.

    There is a large body of jurisprudence establishing a person's Charter right to freedom of religious expression, said Shirish Chotalia, the lawyer representing Mr. Brah in his human-rights complaint."
  • By Marina Jimenez, Globe and Mail, Friday, Dec. 26, 2003

  • Has anyone ever seen a DA disciplined by DAI in recent memory? I know I have had run inns with my DA and talked to many people at Head Office, including the Ombudsman's Office. I even have a written reply from the Ombudsman, a rare document, which states that it appeared I was in the right. Did it make any difference? No!

    Obviously there has to be a better way to resolve problems. Litigation by individual franchisees is not easy. To quote Fred: "if you appeal to them nicely, they'll respond and give all they can give." What has happened to this mindset? Possibly Fred does not consider franchisees as people? All we ask it to be treated with respect and fairness.

    Take care.


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