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.

Thursday, April 28, 2005

Compliance Issues at Subway - real or imaginary?

How is it that a franchisee who has been in the Subway system for well over a decade and who takes great pride in having a well run store gets threatening letters from Subway head office if he has just one incident of a problem. We are not talking about onging problems but, say one in a year.

Here is a typical letter sent to many of most faithful and hard working franchisees on a regular basis:

"Dear Franchisee:

All SUBWAY restaurants must operate in accordance with the strict

standards for quality, service and cleanliness as defined by

the Company. It is the responsibility of each SUBWAY franchise

owner to be knowledgeable of all company policies as well as applicable

health and consumer protection regulations concerning food preparation,

food handling, storage, etc. Health and safety regulations exist to

protect our employees, our customers and the Brand.

Your Store Evaluation & Compliance Report dated xxxxx

indicates that your restaurant is not operating in compliance with the

specified SUBWAY standards regarding the following compliance areas:

Food Safety / Glove Usage

Food Quality & Preparation

In addition, there were 6 areas with a critical rating of “0” or “1”

which require your immediate attention.

Improper food safety may cause illness, which may affect the reputation

of your restaurant, your investment and the SUBWAY franchise system.

It is imperative that you correct the aforementioned violations

immediately.

Please be advised, that if the next Store Evaluation & Compliance Report

indicates that your store is still not complying with Company standards,

we will have no recourse but to refer this matter to our Legal Department,

which could result in proceedings to terminate your franchise.

If you need additional direction and/or assistance on how to correct

the compliance areas in your restaurant, please refer to your

Operations Manual and/or contact your Development Agent or Field

Consultant immediately.

Sincerely,

Policy/Compliance Adm."

Nice wording, is it not?

Now put this in context of this very same person who wrote this letter and who makes a mistake at work. Do you think she would be very happy with such a letter or do you think she would contact human relations, a union, or some other similar body to complain about unfair treatment and abuse by her boss?

Now, consider the owner of a Subway restaurant. He has hundreds of thousands of dollars invested in this store. He also can not just fire anybody because they make a mistake. There is also no guarantee that another new employee will not make a similar mistake. What recourse is there? None at all. He can only hope that the same mistake is not repeated by an employee. It really does not matter how hard he tries to correct the problem as mistakes do happen.

I can understand if this was an ongoing problem so that a history of documented problems exist. In addition one would expect that there would be some history of poor reports from the local heath department. If none of these exist why is it necessary for such a threatening letter after only one such incident?

The interesting thing is that this is not unusual. DAI (Doctors Associates Inc - Subway) do this on a regular basis. They use form letters as they issue so many. In addition, it does not matter if the expiry date is out by a few minutes or days. You get the same letter. It does not matter if it is vegitables or meat. After all, a sliced tomato poses the same health risk as a slice of meat, according to Subway. It does not matter if the product is held at a very correct temperature and constant monitoring of these are done by the store or if this is not done.

What we have is the "No Tolerance" policy which is so rampant through out North America. You know the one where the policing officer does not have to think. There are no extenuating circumstances. I have never found that a no tolearance policy works in any situation. The underlying problem is not solver but just complicated. For example, the incident of drunk driver collisions have not declined in society even with a no tolerance approach. Similarly, you will not reduce the possibility of a person getting food poisoning by using a no tolerance approach.

What will happen is that some of the less hygenic operators will just hide the problem. They will not get caught and when they do have a problem they will point to the clean record from Subway to exonerate themselves.

What we need form Subway is more of a helpfull approach to any indetified problems. Maybe there is some training which is required, maybe there is some operational problems which can be improved.

The only way to correct any perceived problem is to study its root cause and correct it. If after this no major improvements can be made then one has to conclude that it was an error and it should be noted as such.

Take care.

15 Comments:

Blogger sideshow bob said...

Very interesting blog...it's good to know what's going on with Subway. It's a valuable service you provide.

5:43 PM  
Blogger Ivy said...

I live in Staten Island New York and have a friend that works at a Subway here. According to her she (1) did not fill out a W4 tax form, they did it for her; (2) when she works overtime she is paid in cash so the owner does not have to post it on his taxes; (3) does not sign herself out when she leaves, this is done by her manager without her knowledge until after the fact. Are these policies right? She doesn't even get a time sheet! What's wrong with this picture?
I hope you can give me some answers.
Ivy

11:20 AM  
Blogger wolleysegap said...

As Subway owner, I too feel victized by my field consultant. A termination letter was computer generated when over 4 months I had 2 perfect scores and on one inspection 4 bags of potato chips 2 day out of date and on the other one [during noon rush], the field consultant saw an "artist" ring up a sale and reglove without washing hands. Lordy, what is Subway coming to that they threaten to pull my franchise after posting 10% increases in AUV the past 2 years. N. B. SUBWAY FOR SALE!

1:25 PM  
Blogger SubwayMan said...

Another multi-store owner here. Yes, I had a couple stores of which neither had ever been out of compliance during a 4 year period. Never did I receive a letter commending me on total compliance. However, a new field consultant (hereafter referred to as The Natzi) was assigned to my stores. She came in like a crazy woman and found both out of compliance. Just like the previous poster, I received two NASTY notes threatening termination of my franchise. WOW!! I was very surprised.

Something definately needs to change!! I've busted my butt to be in these stores and I run a very good operation. I've made a lot of sacrifices and don't deserve this kind of treatment.

7:29 PM  
Blogger dan said...

I to was a multi store owner for ten years. I corrected my new field consultant 2 years ago over a minor issue. Since that time i have not been in compliance and have since sold my stores because i was facing termination. I also had to pay an additional 41,000.00 dollars in AUDIT fees in order for DAI to approve the sale of the stores. Keep in mind that my stores showed a consistent increase of 10-15% in sales for the past 8 out of 10 years. I was concidered a BAD operator. Now that I am out of the system I can really see the systematic abuse of the franchisees. Goodbye and good riddens

7:32 PM  
Blogger BendOveritsFred said...

OUT OF Compiance SFAF is out of compliance. Terminate. How dare they move from my watchful eye.

2:43 PM  
Blogger hella said...

This practise is an important tool for the DA to ease out unwanted franchisees.

DeLuca doesn't care. He just sits and waits for this bank statements.

12:28 PM  
Blogger subway-i-hate said...

SUBWAY COMPLIANCE TERMINATION LETTER I hate that.

We have received 2 compliance in April-2009 and another very simple for slight tempature off in Tamato in May-2009. After that we have received TERMINATION letter stating if this not sloved in 60th day and full compliance for next 60 days...if not your franchisee agreement will terminate.

I hate this filed consultant...who only works for multi-store operators and they knowling writes this compliance letter so other can take over that sore.

7:43 PM  
Blogger subway-i-hate said...

SUBWAY COMPLIANCE TERMINATION LETTER I hate that.

We have received 2 compliance in April-2009 and another very simple for slight tempature off in Tamato in May-2009. After that we have received TERMINATION letter stating if this not sloved in 60th day and full compliance for next 60 days...if not your franchisee agreement will terminate.

7:45 PM  
Blogger rod.staines said...

This comment has been removed by the author.

8:34 AM  
Blogger Adam said...

I know how you feel.
Termination letters after a cracked Translite cover!!!!

12:47 PM  
Blogger Rajan said...

This comment has been removed by the author.

11:49 PM  
Blogger hatesubway said...

I too tried to sell my Subway because of excessive bullying. Before 2007 this was a great Franchise. I never received those threatening notices until 2008...Subway started a massive effort to clear out the old and bring in the new owners that would be easily intimidated.

Freddy messed with the wrong boy.
When Subway began efforts to terminate my Franchise before I could sell it, I beat them to it...I terminated them. I completely tore my store out from top to bottom. Now, nobody is stupid enough to spend 200K to rebuild and Fred's error is costing him over $40K/year forever...I win!!!

If anyone has any questions please Email me at: subsold@yahoo.com

I hate this Franchise...and all franchises!!

3:41 PM  
Blogger Franbiznetwork Franchise business said...

Hi Admin,
After reading your post, I have received important idea about Subway franchises. Thank you so much for sharing your nice through.
Subway for sale

2:09 AM  
Blogger Kamal Farhat said...

Hi Egil and All,

I know this is an old post, do you see any improvement in Subway's bullying attitude or things are even worse now? does anybody have a recent experience as a Subway Franchisee and is willing to share his experience?

5:40 PM  

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