Labor Day in the life of a Zee

Ever ask a zee how they feel about holidays?  Just what goes through the mind of an average person versus the franchisee owner when “holiday” is discussed?  Ever wonder how a zor spends their holiday? In the Americas, the word is “vacation”.  Every paid worker spends their year planning and imagining the relief those two or three weeks truly bring to the family and one’s own inner balance of family vs work vs quality of life.  In Europe, it’s holiday and it’s twice as long as the Americas because most Euro holiday packages are four to six weeks.  The European has come to expect holiday and due to the lack of opportunity, in some respects holiday is one’s privilege.

In the thinking of the blue collar or the white collar or the Euro or anyone else who has never truly owned and run a business, let alone a franchised business, there is no reference or association as to what a holiday brings to a zee.  Their impression is that a small business owner who owns a high-profile franchise operation must already be rich.  They do not know that the life savings and the mountain of debt needed to serve them their 15 second servings of fast food heart attack will never allow me to enjoy another holiday.  The reference of outlay at the onset of such purchase of franchises is referred to “sunk costs”.  Oh how bloody true is that depiction!

Here are just a few interesting problems of the zee during holiday:

• Workers are off, zee gets to stay and keep the doors open (bills don’t do holidays)
• Workers are off, doors have to stay open, otherwise the revenue of the holiday revelers will be lost
• If it’s a day in which stores are closed due to law, I’ll stay and catch up on books and admin as the workers aren’t in
• If it’s a party day where retail is open, I get to stay and help the skeleton shift (who bitch and moan that they have to work)
• Leading up to the holiday, everyone leaves early, meaning I get to stick around to make sure everything is set because I own this mess
• And finally, the schedules are all mine to own and fix and work with due to the fact that no one owns anything but me (the R word means nothing to the hourly worker)

And last but not least, I can visualize and imagine the wonderful times the zor is having attending special events as grand marshall (the honor and respect he purchased with my life savings and ongoing royalty abuses).  After all, his ad fund, his marketing fund, his kickbacks from vendors and his admin, his legal support are all coming from the money I gave, will give him and am generating while working over this glorious holiday!

Bloody

Freddy Crosses Over to the Dark Side…

It was all innocent at first.  Freddy borrowing money ($1,000) from Dr. Peter to start a sub shop.  Try as he did, Freddy couldn’t make it work.  Maybe two would work instead of one?  So Freddy labored all day and all night to become the quintessential entrepreneur.  But just as one didn’t work, two didn’t work.   Just like throwing your last wad of cash onto a single number at the roullette wheel, Freddy opened a third store.  Voila!  It worked.  Three was a charm!  After a number of years, Freddy knew there had to be a better way.  The hours were too long, payroll was tough and working to manage the whole mess was a juggling act at best.

So Freddy learned about the most lucrative business model ever conjured up by man – where you could use other people’s money to grow your business!  It’s called FRANCHISING!  So it was in 1974 that Freddy moved over to the dark side.  On the shirt tails of Ray K, Freddy started selling franchises to any and all who would show.  He especially loved immigrants who were entering the country with their life savings.  Freddy never told them his model wouldn’t work for just one store. But then, Freddy wasn’t running sandwich shops, he was selling franchises.  And should they figure it out, he could sell them more.  The ones that didn’t, could be sold to new marks.

Interestingly, the Reagan administration relieved the entrepreneurial establishment from common law and allowed arbitration to be the governing entity.  This gave Freddy and his band of merry con men the final authority on any and all contract negotiation and interpretation.  If things went wrong, the arbitration firm could be paid off.  And God forbid anyone sue Freddy.  Should that happen, Freddy simply uses their own royalty fees and vendor kickback monies to nail their puny little pitiful sorry asses to the unemployment line.  Don’t eff with Freddy or he’ll take you to the poor house in a body bag.  Who needs a mafia when one can use the government and one’s own money against him!

And so you have it.  The day the richest man in South Florida decided working to make a legitimate business was for the birds.  Taking advantage of the unkknowing and trusting immigrant and displaced corporate schmuck is a far easier way to become a billionaire and playboy.  And just remember Mr. Schaden, Freddy’s war chest makes yours look like a kindergartner’s piggy bank stash.

Bloody

Who Pays for TV and Radio Advertising?

Turn your television on and for a single hour, jot down the commercials you see on any of the major broadcast or cable channels (ABC, NBC, CBS, ESPN, CNN, etc.).  On major channels, there are three main categories of advertisers.  (Check the bottom of this post to find out what those three are.)

Though it cannot be proven, franchising advocates continuously quote that 40 to 50% of all retail is franchised.  (The data is owned by too many people and influenced heavily by pro-franchisor predatory bigots.) When you analyze the data of your one hour’s worth of major network advertising, it will become apparent just what the three verticals are that spend the lion’s share of advertising dollars with Madison Avenue agencies.

But that’s not the question or the purpose of this post.  The question is: Where is the money coming from?  First of all, some history.  McDonald’s ignored all conventional wisdom over three decades ago when they surpassed the 100 million dollar mark in advertising spend in a single year.  Most could not fathom the thought of such.  How did they justify it?  Simple, it wasn’t their money!  It is the money of hard working franchisees who pay exorbitant royalties to franchisors who spend it freely and with reckless abandon.  McDonald’s practices are truthfully depicted in in Fast Food Nation, author Eric Schlosser.  They pioneered the principle of going after your children, the pester power method.  But that again, is not the issue.  The real issue is that many franchises are B2B and not B2C.  Nearly all of the franchises that are offered at low entry fee are B2B.  These predatory franchisors have no intention of doing anything with the hard-earned  money they collect for advertising from your profits.  When asked the question of where that money is spent, or better yet when reading an FDD or UFOC, it is up to the sole discretion of the franchisor whether or not those funds are even earmarked for advertising.  Read an FDD and if you can even find the subject covered, you will see that the money can be used for advertising or any other thing the franchisor chooses.  Many simply use if to fund their playboy lifestyles.

So the next time you see David Brandon bragging that he’s giving money back to Main Street, don’t believe it.  He’s spending the money of the franchisees as though it is his.  When you watch a Subway commercial, remember that Fred DeLuca is the slimiest franchisor in the world, fighting more lawsuits than McDonald’s, Dunkin Donuts and Pizza Hut combined.  Fred gladly sells single franchises to unsuspecting immigrants (all they need is a pocket full of cash) when he couldn’t make it until he owned three!!!  When you see a Quiznos (seedy and poorly thought-out million sub giveaway campaign), know that Rick Schaden and his staff of flunkies approved the campaign and then fired the VP of Marketing (who came from telecommunications – how ignorant and cheap is Schaden for even hiring her) as a scapegoat.  (It’s only a matter of time until Quiznos loses the pricing game, thus driving all of their franchisees out of business.  Freddy D. has 6 or 7 times the number of franchisees, thus a war chest of over 400 million dollars a year at his disposal (pun intended).  Ricky hasn’t a chance of winning a price war.

So the next time you watch a Nascar race (if you can stand the fact they never learned to turn right;), count the number of advertisers who sponsor a car and then see how many are franchises.  Then realize that Ricky and Freddy and Davey are all spending 4 to 5 MILLION per car to put their brand on the hood of a race car!  That’s right, the hard-earned money of your relatives or friends or immigrants (who are unaware because they’re probably working 7 days a week just to make ends meet) is being spent so Ricky and Freddy and Davey can sit in the infield or in VIP boxes,  get special privileges at the expense of those who labor just to scrape by.

The three vertical leaders in advertising are auto, beverage and food.  (Yes, they are all franchised; GM not for long – they are soon to be owned by you and your Commander-in-Chief, who by the way, operates just like a franchisor.  He spends your money and you have absolutely not one damn iota of say in any of those decisions!)

Bloody

“Franchisees – Shut Your Mouth or Lose Your Livelihood”…Rick Schaden

The president of a group of disgruntled Quiznos franchisees says the fast-food chain has been granted a court injunction, forcing him to close his three Oakville-area restaurants. Doug Johnson said the injunction, effective yesterday, was ordered within days of another court ruling allowing the franchisees’ lawsuit against Quiznos to proceed as a class action.

The Toronto Star
May 1, 2009

Quiznos closes plaintiff’s stores
After being certified to pursue class-action suit, owner of three outlets in Oakville shut down
Dana Flavelle

Quiznos closes plaintiff’s stores
After being certified to pursue class-action suit, owner of three outlets in Oakville shut down
Dana Flavelle

The president of a group of disgruntled Quiznos franchisees says the fast-food chain has been granted a court injunction, forcing him to close his three Oakville-area restaurants.

Doug Johnson said the injunction, effective yesterday, was ordered within days of another court ruling allowing the franchisees’ lawsuit against Quiznos to proceed as a class action.

The class-action certification represents a major step forward for the franchisees, Johnson said.

“Without the ability to bring this case forward as a group, franchisees face insurmountable obstacles in enforcing their legal rights. We now have a real chance to fix the problems of the past and help franchisees in the future,” Johnson said.

Once again to quote the now deceased Harold Brown’s book (published in 1980 and updated until Release 32, 2001), Franchising: Realities & Remedies, 1.01 [1]

Background of Franchising

[1] –New Concepts

…..As franchising has grown, however, the growth has been acompanied by a number of disputes between franchisors and their franchisees.  While legal disputes are to be expected in any long term relationship, franchisor/franchisee litigation has resulted in franchisors drafting progressively worse franchise agreements for new franchisees to sign.  Ironically, even a franchisee who prevails in litigation or arbitration ultimately harms prospective franchiseees in his system.  The losing franchisor is faced with two options: (1) alter its wrongful conduct, or (2) draft a more one-sided franchise agreement that states that the franchisor is permitted to act in any manner it sees fit.  Remarkably, franchisors almost always choose option number two, and  written franchise agreements reflect an even greater imbalance in power between franchisees and franchisors from year to year.  Franchisee advocates are forced to argue tougher and tougher cases each year as many courts refuse to recognize the imbalance in the relationship and, instead, enforce the language thrust upon the franchisee.

What a phenomenal business model!  Write a one-sided contract, if they sue you, shut them down!  If you lose, change the agreement to make sure they can never sue you in that manner again and cripple the incoming franchisees even more!  Hello franchisees – are you there!  Do you not understand yet?  You cannot fight a crook using a system run by the crook’s buddies (the courts)!  Call it naivete or ignorance or whatever, but the very reason most end up in arbitration is so that the courts could let the franchisors do “what they please”.  If your case makes it to court, then you’ll only end up with a class action or civil case in which you’ll only receive a small portion of your investment (the lawyers take the lion’s share) and then you get to start over!  Cool!  Awesome!  Wage your entire life savings and lose it.  Borrow more (now you’re waging your children’s and fellow taxpayer’s future lives) and fight the good fight against the enemy on their turf!  While you’re fighting, you cannot make a wage because the franchisor can shut you down!  If you win, you might get a tiny fraction back, if you lose, you lose two lives worth of investment.  Either way, you get to start over and fighting on prinicple, doesn’t pay the bills.  Doesn’t sound like a battle much worth fighting.  (I much prefer finding legal ways to make the franchisor’s lifeso bloody miserable, he has to change or suffer the wrath!)

Bloody

Steinfort Gone

Damn, real data does tell the true story!  (See previous Bloody post.)  Rumor has it that Ms. Steinfort has been let go.  On Bluemaumau, a recent anonymous commentor claims Ms Steinfort has been used as a scapegoat by Mr. Schaden.  I doubt that!  If one checks her background, one can tell that she doesn’t have a clue on how to market, nor a record worth putting into print (might be why her LinkedIn profile lists Level 3 as a restaurant concern when it’s a telecommunications company – and a very unhealthy one at that).  Feel free to comment if you have more info!

Franchisee Recourse

Many of you have faith in the system.  This is why you bought into a franchise, are looking at buying into a franchise or sadly, have been burned and turned into ash by a franchisor.  Some have said that those of us who have been burned simply want to rant and throw the whole system out (the baby with the bathwater).  This is true if franchising stays in its current condition.  Franchising could be a great model, but not until there is recourse on behalf of the franchisee.  Today, recourse is non-existent.  As a franchisee, here are your options:

Scenario:  You’ve run into a snag.  No matter the snag (financial, operational, marketing, sales, functional or strategic), you are at a point where you don’t have the resources or the knowledge to go it without some assistance.  The normal course goes something like this:

1. Call the franchisor, who gets back to you a week later and simply says “You’re just not doing what we told you to do, keep trying”.  Or perhaps “You’ll need to buy another franchise to increase your revenue”.  (This isn’t an option because you’re already up to your eyeballs in debt.)
2. You call other franchisees to get support and find out they’re in the same boat and they have no answers. (Bitch and moan sessions break out.)
3. You seek out help from your friendly neighborhood lawyer, all to find out he has no expertise in this area and getting any advice from him is just plain stupid and doesn’t apply. (I pity those of you who trust main street lawyers with your livelihood.)
4. You read your contract and find out just how lopsided it  truly is and you now realize you’ve been effed (or “had” if you aren’t yet mad as hell by now).
5. Now you’re really in a pinch and you start thinking about any other recourse you might have.  Let’s just say you’re not an evil person so sabotage or ambush are not considerations of your recourse.
6. Considering you feel you’re very resourceful, you call your local franchisee association (assuming there is one – which means you’re in the minority).  After six months of feeling these people out, you realize its rife with lukewarm blowhards who have no clue as to how to get anything accomplished, while there are slight glimmers of hope from a few conversations, only to realize that corporate has infiltrated the association and everything submitted is “taken under advisement” never to see the light of day again!
7. Finally, you’ve done all of the nice guy things that can be accomplished, so you pull all the stops and you seek out franchisee-only law firms.  After several confusing discussions, you realize that the lawyers will cost you a fortune in hourly fees considering most will not take a contingency case.  Contingency cases must be a slam dunk and this rarely occurs when the UFOC/FDD is written 99% in favor of the franchisor.  The UFOC/FDD is loaded with intangible statements including “good faith” and “disparaging” types of words which do not and will not do the franchisee any favors with most judges.  The law firm will ask you enough questions to figure out whether the case is egregious enough to be considered a contingency or a class-action or you are stuck with arbitration. (Class action suits only benefit the firm and in almost 100% of all cases, the franchisee will only get a partial portion of their initial sunk costs back, about 5 years after engagement if one wins the suit.  The judge in these cases now holds all the keys to your future.)
8. Let’s just say you read the FDD and you ask your competent lawyer about the clauses of “arbitration”.  You find out that you cannot even go to court because you don’t have a case large enough, or it cannot be monetized and you are therefore subject to arbitration.
9. At this point, you either have to have the reserves to hire the firm on a retainer basis ((you now have to take a second or third or pull all of your life savings together (provided you have any left) to defend what you’ve already sunk into the venture)).  If not, you simply give up and either suck it up and swallow the franchisor’s bullshit or you close up shop and walk away a “loser”.  The franchisor can simply put you into the loser’s category and in court, you haven’t a chance in hell of ever convincing a judge or jury otherwise because he has statistics of successful franchisees and unless you can refute them, his word is way more viable than yours.  After all, he’s a successful franchisor and you’re just a low-life franchisee.
10. Maybe you do have a rather egregious case and the firm takes your case on a contingency basis.  First, they will need a retainer.  If you don’t have $50,000 to throw into a retainer, then you have to fund it with a loan or even worse, you ferret out other franchisees to see if you can rally the troops.   (You know from previous conversations that you’re not alone, but for fear of retribution, most are not as ballsy as you and you will have to do this with great fear and trepidation to avoid this getting back to the franchisor making you vulnerable to having your franchise terminated with/without cause).
11. Once you take action with a firm, regardless of contingency, retainer, class-action or some combination thereof, you now are going to be terminated and marked.  You will have to go out and find another way to make a living in the meantime.  Wasn’t buying into a franchise the alternative to having to go back into the corporate hell hole in the first place?

Conclusion:  There is no viable recourse for franchisees.  Even with a settlement (see the previous post about a Quiznos franchise awarded in favor of the franchisee over a 4 year period), you are subject to appeal.  And trust me, the franchisor has more time and money (your money I might add) and will pursue any and every possible remedy (with your money I remind you) to keep you from exposing them.  See the post below placed on Bluemaumau.com by the owner of a franchise when I called him on the carpet for being a dishonest franchisor:

hello all….bloody franchise is a nameless, shameless liar and malcontent. he/she seems to be hell-bent on trying to destroy the institution of franchising with malicious and false attacks on franchisors and their people at his blog and with persistent emails to people in organizations he wants to attack.

he/she attacks real people with real words but all the time refuses to expose hie/her real identity. my caution to you is to be very wary of any communications you have with him/her. his/her ONLY agenda is to destroy all who are part of the franchise family of franchisors and service providers.

hello bloody….we will find you. we will find out who you really are. and because of your malice, libesl and other counts we will seek all remedies the courts allow. you are a coward to hide behind an alias and attack real people. we will find you. and we will crush you. you are a coward. you are a liar. you are a loser. and if you have anything left to lose…you will lost it, too. that’s a promise.

So franchisees, there are no conventional recourse options.  Legal is in it for the money.  Franchisee-only lawyers are in it for the money – they have to be!  If they play both sides of the fence, they cannot be trusted!  The courts don’t have a clue and with the changes in franchising, the laws of the court have been replaced with franchisor-friendly arbitration firms who schmooze the franchisors to get the cases.  You have no options there either.

“So what are my options?” asks the franchisee.

“Aside from criminal, civil or libel actions against the franchisor, going to the press or organizing other victims of your franchise brand to bring grass-roots marches on the front steps of the franchisor, there are none!”  – Bloody

David Slays Goliath (Quiznos)

So you think you cannot fight the big guy?  You think the big guy has it over on you and there is no way to win?

I think not!  It’s about time we all stood up and rallied together to put these people in the graves they are digging for us!  See a recent settlement below where owners of a Quiznos (Rich Piotrowski, Ellen Blickman) beat the blokes at Quiznos who are at this very moment, selling naive mom-and-pop franchisees down the river:

http://www.docstoc.com/docs/document-preview.aspx?doc_id=3311106

Once again, wake up America and tell the world “I’m Mad as Hell and I’m not going to take it any more!!!!!!”

A Day in the Life of Becoming a Franchisor

Now for the perfect job, the franchisor:

1. Hijack a concept that sells (regardless of profit), create an alternative product with not a creative bone in your body or differentiator (other than price) to separate yourself from the leader.  Good models are Subway/Quiznos, Dunkin Donuts/Tim Hortons, Gold’s/Curves, Taco Bell/Taco Johns, McDonald’s/Burger King, Red Lobster/Long John Silvers, Dominos/Papa Johns, Midas/Meineke, Kinkos/UPS Store, Carvel/Baskin Robbins.
   
2. Find a big franchisor law firm that writes bullet-proof UFOCs/FDDs.  “Put in two CYA clauses for every claim your broker will make.”
   
3. Get a referral from your law firm for that less-than-respectable banker that can build a contract based on UCC and not common law.
4. Sell the concept to unsuspecting franchisees who are naive and in a place of vulnerability (immigrants mostly, displaced corporate America , mom and pop hopefuls) to finance your venture (mostly because anyone with a brain won’t touch such a business plan).
   
5. Then watch the money come in.  Schedule your 12 weeks of vacation per year, buy your VIP box at your favorite stadium and start shopping for yachts.  It’s only a matter of time until you have the cash flow to live like a king.
   
6. With some of that initial franchisee deal money, hire some bloke who can’t otherwise make it in the real world to be your marketing officer (sort of like Quiznos hired Steinfort, some young 30 something who’s only experience was in telecommunications!).
   
7. Introduce them to the other brilliant creative minds on Madison Ave. and the party will now begin!  All you have to do is attend dog-and-pony shows, make a decision and whatever you choose is paid for by the franchisee!
8. If you need more ad money, simply raise the rates on your ad royalties and make it retroactive to every FDD/UFOC (that confirms it’s coming out of the franchisee pockets of course). No one can object because if they do, you can pull their franchise!
   
9. Cut an ironclad kickback agreement with your vendors and dictate to each franchisee that they have to buy from that vendor.  If they refuse, threaten to pull their franchise and thus their livelihood.
   
10. Hire average salespeople (yes men) who will do exactly as you instruct them in coloring the truth just enough to the franchisees to get them to sign.  Those from the mortgage industry, timeshare sales, car sales and any other large ticket, one time products make great fits.  They’re used to instilling the confidence necessary to maket the sales and because it’s only one-time, they don’t have to worry about repeat sales.  Salespeople with integrity and honesty are considered bad prospects.
    
11. Spend all your time building your marketing programs to sell more franchises, letting the other stuff work itself out.  You don’t need rockstars for this, average blokes from the local community do just fine.  If you hire too much IQ, you suffer someone questioning your motives and the long term.  Remember, your job is to sell franchises, not worry about how they do as a business.  If they fail, you have the opportunity to sell another in the same region.  And because you the majority of your money on the initial sale, their success or failure is absolutely of no concern to you.

Stop by tomorrow to learn how to build your internal staff to accommodate your new high roller lifestyle.  We’ll teach you just what type of people can help you build your kingdom with the life savings of the naive who are seeking to survive.

Bloody

Quiznos Torpedoes It’s Franchisees!

Quiznos wasn’t happy with giving away its franchisee’s money with the unannounced 1,000,000 free subs, they’ve now risen to an all new low by dropping the bar on sandwiches from $5 to $4.  So how did this come about?  Well, it starts with your young and less than knowledgeable (no clue on human nature, past historical ramifications of such actions) marketing person, Ms. Rebecca Steinfort:

“The reality is that we are a challenger brand,” Chief Marketing Officer Rebecca Steinfort said in an interview. “Our main competition is Subway, which is an 800-pound gorilla. We may be 200 pounds, but they’re 800.” – AdAge article by Emily Bryson York

Now who pays for the reduction in profits?  Why the franchisees of course!  Check out the next statement:

At Quiznos, marketing failed to drive traffic and closed stores. The chain now has about 4,500 locations worldwide, by Ms. Steinfort’s estimate. The company is private and does not disclose sales figures. – – AdAge article by Emily Bryson York

What a great job!  I can try and try and try until I get it right, because I don’t have to absorb the cost of my actions!  The franchisees take all the grief.  I get to sit in the VIP box at the Yankees games while those miserable blokes deliver sandwiches 24/7!  The franchisees are simply collateral damage.

Question for Ms Steinfort: If stores go out of business selling a $5.00 sub, then how many more will go out selling a $4 sub?  Let’s view Ms Steinfort’s experience/profile on LinkedIn:

When one scans education, it’s quite respectable (Princeton, Harvard Business), though still wet-behind-the ears on experience.  But look a little further and you see Ms Steinfort came from Level 3 Communications claiming a title of corporate strategy, and it’s labeled as (Restaurants Industry).  Folks, Level 3 is a telecommunications firm which barely survived the dotcom bust, the telecom meltdown (thanks to a billion dollar bailout by Warren Buffett).  IT’S NOT in the RESTAURANT BUSINESS.  Can you spell L-I-A-R?  Does this speak volumes as to how desperate Quiznos is and how no one will work for them who does have a brain?  Ms Steinfort has found a place to play with absolute immunity from prosecution!  Obviously, she couldn’t make it in the telecommunications market as Level 3’s stock topped out at $120.00 about the time Ms. Steinfort started, immediately dropped below $10 in a freefall, never to recover.  Today Level 3 is selling for a paltry $.95  (having realized a low of .76 the last 12 months).

So tell me people, wouldn’t you rather have someone selling your sandwiches whose background is in telecommunications?  And wouldn’t you rather it be someone who ran the previous company into the toilet (stock prices from $120.00 to $.016!)?  When is America going to wake up and realize that the franchisors and Madison Avenue are no different than Wall St., AIG or Bernie Madoff!  They’re the elite and you, main street America are the idiots falling for the ruse!  Prediction:  Quiznos will continue to be the “Sprint” of sub shops without any hope of being purchased (there’s only one Wal-Mart folks).  They will die a wikid slow death at the likes of boneheads like Ms. Steinfort and Mr. Schaden.

Bloody

Why “Subway is the biggest problem in franchising….Dean Sager”

Though this report was written some 10 years ago (and Fast Food Nation in 2001-2), the infractions and arbitration have only increased exponentially.  In 2006, Fred took control over all of the marketing funds (400 million) by changing his contracts (was formally under control by the 14,000 member North American Association of Subway Franchises or the NAASF) and now simply markets whatever he thinks will sell sandwiches even if he chooses to give them away for free at the cost of the franchisees.  When they sued Fred in court, his counsel claimed that arbitration was the venue.  The judge told them to “kiss and make up” and let Fred go.  Fred DeLuca has spread his wings to more franchises and invested in others in an effort to heap riches upon himself (billionaire already) while destroying the little guy through his predatory model.–Bloody

The U.S. House of Representatives’ small-business committee studied the franchise industry for six years, and staff economist Dean Sagar concludes: ‘Subway is the biggest problem in franchising and emerges as one of the key examples of every abuse you can think of.’ Says Cliff Marshall, a franchise consultant for more than 30 years: ‘If anyone in my family ever asked whether they should buy a Subway, I would say absolutely not, no way.’

FORTUNE MAGAZINE – MARCH 16^TH 1998

–Judges and juries in several cases have found that the company has conned or misled landlords by using shell companies.

–Legal disputes disclosed in an annual report required by the Federal Trade Commission total 160–more than the combined total listed by Subway’s seven largest competitors (McDonald’s, Burger King, KFC, Pizza Hut, Wendy’s, Taco Bell, and Hardee’s). The number has nearly doubled in four years and doesn’t include 50 cases in Milford, Conn., the company’s hometown, against various dummy entities DeLuca has used to conduct business.

THE LEADER IN LAWSUITS

The FTC requires franchisors to provide prospective franchisees with data about relevant litigation. Here are the numbers of pending and concluded cases* for the eight largest fast-food chains over the past decade.

*Includes arbitrations.

Pizza Hut 4 Taco Bell 5 Wendy’s 10 Hardee’s 25 McDonald’s 26 KFC 28 Burger King 29 Subway 160

From the Mar. 16, 1998 Issue

The defacto standard of publications depicting the true nature of the fast food industry:

Fast Food Nation – Eric Schlosser