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.

Tuesday, August 10, 2004

I’m no Don Quixote.

Who was Don Quixote you may ask? He was a character in Cervantes' masterpiece which narrates the travel adventures of an old gentleman who thinks he is a knight errant. After going insane from misreading tales of chivalry, he abandons his home to search for adventure on the highways and in the rural landscape of imperial Spain. The first part of the novel takes Don Quixote from his small village in La Mancha to the forests of the Sierra Morena, and then returns him to his village where he recuperates from exhaustion and various and sundry injuries. His encounters with other characters often take place at roadside inns which in his madness he believes to be castles. His goal is to right all manner of wrongs and to gain fame for his valorous deeds. Don Quixote meets a wide variety of characters from peasants to noblemen, from criminals to priests, from prostitutes and insane lovers to wronged women and jealous men

At least he had a reason for taking on impossible tasks – he was insane.

I can’t offer insanity as an excuse for the impossible task of getting a fair deal from DAI. The only way that can be done is if franchisees band together as a unified group to demand changes in our relationship. From observations over the past four years I have come to the conclusion that this may be an impossible task. I thought that NAASF would offer a solution but this has not been the case.

I understand that franchisees with multiple stores have a substantial investment in the current system and certainly do not want to jeopardize this investment. New owners want a piece of the pie also and will do almost anything to build their business with more Subway stores and greater profits and wealth. This poses a serious impediment for change. Only a franchisee that has had serious run inns with DAI or their DA is prepared to stand up and be counted. They probably feel that by this point they have little to loose. Unfortunately they are branded as trouble makers, complainers, sore losers, etc. They should be looked on as risk takers and heroes who are prepared to effect change in the system even if DAI do not want this.

How then can NAASF effect any change? When you talk to individual members and the Board you will find that overwhelmingly the majority want change and better representation. All want to see a stronger and healthier relationship between the franchisee and the franchisor. How this can be accomplished is the major bone of contention. One would think that after half a decade of no change that NAASF and the franchisees would opt for a new approach. This does not appear to be the case! We are still being used by DAI to do surveys of our members to effect changes to the operation. This was done before NAASF ever existed. NAASF had nothing to do with this being done today. We are still asked to participate in decision making procedures but this is just to placate the franchisee and has little to do with improving the system. Sure the system has to be improved when you see the difficulty our staff is having in coping with an ever increasing complex operation. This is recognized by DAI as it is starting to affect sales and profits.

We are being ‘asked’ to install a ‘speed’ oven which will make our sandwiches more desirable by the public. I’m sure they will but wonder if better tasting bread would not have done this? The oven will affect our through put inversely to the success of its implementation. What I mean is that the more customers ask for a toasted sandwich the more difficult will be our ability of serving our customers. Our line will slow down! Then there is the hanging question posed by the fact that Fred wants us to serve a pizza product. This oven offers DAI the perfect vehicle to do this. Rather than simplify or menu you will see new products offered.

I don’t want to sound like a habitual complainer but saying nothing when I see an injustice is just not my style. I have been asked by some NAASF board members to lighten up and let them do their jobs. I was also accused of not contributing to the Board meetings when I was a board member. My posts on the NAASF Discussion Forum have been 'edited' by an unamed individual even though they contained no offensive language.

All I can say to that is that I contributed fully and offered many comments for improvements and change. I also wanted NAASF to engage the franchisee community more by doing surveys and research using a very good web site which I found for this. I also wanted NAASF to set up a database of information for all franchisees. This would include, but not limited to, legal advice and procedures for dealing with DAI or a DA. I wanted the Communications Committee to be a bigger part of this process but what happened? They terminated the Communications Committee!

What do I want NAASF to concentrate on?

1. Truly representing the wishes of the franchisee community. I’m sure doing surveys for DAI is not on top of this list.

2. Set up a database for the use of the franchisee to help them in legal disputes.

3. Make recommendations on how to proceed when DAI is telling us one thing but we suspect they are wrong.

4. Take a stand on issues and make all aware of the stand.

5. Set a goal which includes actually improving the franchise agreement.

6. Expect better performance and value from employees.

7. Keep funding of NAASF 100% independent of any influence of DAI.

8. If DAI wants NAASF to do surveys on their behalf charge them for this service.

9. Improve communications.

10. Continue to improve communications and feed back to effect positive change in the system

There are my 2 cents worth. Guess I’m insane after all!

Take care, Don Quixote.

Sunday, August 01, 2004

I have attached a link to a short video. The video, in full, was sent to HQ and subsequently to the DA by HQ so it will not be news to them.

The purpose of the video was to demonstrate the two standards being used by the Development Agent and also DAI in monitoring Subway stores. In this case one store was being threatened by termination as it was poorly run, in disrepair and dirty, etc. In other words such a disgrace to the Subway system that termination of the franchise was necessary to preserve the good name of the brand! You have all seen Compliance Reports and understand how impossible it is to pass any test if the Field Inspector wants to implement the white glove treatment. My point in creating this video was to show that this policy was not being fairly applied to all stores.

As a follow up: The store owned by the Development Agent still is in poor repair and poorly run. It is also in the yellow color scheme even though other stores have been threatened with termination if they did not remodel immediately. I also note that there continue to be other stores in the area which are in the yellow color scheme. I suspect that there is 'special' circumstances which has little to do with need but rather relationships.

As an aside but still related to 'special' relations: If a new franchisee wants to buy a Subway store they are required to relocate if they live outside the immediate area to the neighborhood of the store. This is required before they are even granted an interview with the Development Agent. They are also required to work full time in the store. However; exceptions have been observed in recent store development where an individual continues to live well outside the area of the new store and also continue to work in another job. The store is being run entirely with staff. The individual continues to be a Field Inspector of Subway!

Here is the link to the video again. You may have to right click and 'save as' then play it later.

Take care.

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