Industry News | June 26, 2006

Franchisee Advertising Fund Trust Sues Subway

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The Subway Franchisee Advertising Fund Trust, acting on behalf of more than 10,000 franchisees worldwide, today announced it has filed suit against Doctor’s Associates Inc., owner of the Subway brand.

The suit against Doctor’s Associates was filed in Ansonia-New Haven Superior Court in Connecticut and seeks to block Subway founder Fred DeLuca and DAI from "seriously diminishing the control and protection that Subway franchisees currently have over where and how their advertising contributions are spent on advertising and marketing programs that help grow the business," according to a release issued by SFAT.

The current issue stems from a new franchise agreement introduced on April 1, 2006. The SFAFT claims that terms in the new franchise agreement are in direct conflict with the 1990 trust agreement that established SFAFT. SFAFT is asking the court to bar DAI from including the new terms in its revised franchise agreement and to require DAI to live up to the commitments it made in the 1990 Trust Agreement.