Subway franchisee association files suit against DAI

CORAL GABLES, Fla. — The North American Association of SUBWAY Franchisees Inc. (NAASF), acting on behalf of more than 14,500 SUBWAY restaurants in North America, announced it has filed suit against Doctor's Associates Inc. (DAI), the franchisor of the quick-service restaurant chain.

 

NAASF's lawsuit, filed in Connecticut Superior Court in New Haven, Conn., seeks to prevent DAI from violating the established rights of Subway franchisees to transfer and renew their franchises under the terms of their franchise agreements.

 

According to a news release, the plaintiff's goal is to prevent DAI from depriving franchisees of the benefits of their independent national advertising program, guaranteed to them under a 1990 Trust Agreement signed by their franchisor and the Trustees of SFAFT. Under the provisions of the Trust Agreement, Trustees elected by franchisees control the advertising program, which also is funded by franchisees.

 

The NAASF lawsuit comes on the heels of another suit filed against DAI June 26 by the Subway Franchisee Advertising Fund Trust (SFAFT). That suit seeks to block SUBWAY founder Fred DeLuca and DAI from violating the terms of the SFAFT Trust Agreement by improperly attempting to usurp control of the national advertising program from the franchisee-elected Trustees, to whom DAI gave complete stewardship of the program in the 1990 Trust Agreement.

 

"We respect our franchisor and its founder, Fred DeLuca, for what they have built," said Kevin Brough, chairman of NAASF. "The new franchise agreement introduced by DAI on April 1, 2006, however, threatens to erode the foundations of the Subway system, by destroying franchisees' trust in the good intentions of our franchisor, and violating one of our foundational documents, the 1990 Trust Agreement."