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Answers To Questions Commonly Asked By Subway Franchisees.

Q:  I just received a bad evaluation of my Subway™ Restaurant, should I worry?
A: Perhaps.    Every year Doctor’s Associates, Inc. (“DAI”) terminates a lot of subway franchises.    In most cases, the termination process starts after a series of evaluations that show the franchise is out of compliance.   Obviously, some forms of non-compliance are more problematic than others.  After you get a bad evaluation of your store, try to resolve all the issues.   If you continue to get negative evaluations, it is probably time to worry.

Q:  I was marked out of compliance for something that was previously acceptable.  What should I do?
A: Speak with your field consultant.   If you can correct the issue during the visit suggest that the item be marked in compliance or just marked with a warning.

Q:  I haven’t changed how I run by Subway™ Restaurant, isn’t that good enough?
A:  No.  From time to time, Doctor’s Associates, Inc. will make changes to what it expects from Subway™ franchisees.  Further, changes at the DA or changes in the field consultant may change how your store is evaluated.

Q:  I just received a letter warning me that my store was out of compliance.  What should I do next?
A:  There are two things that we recommend that franchisees do when they receive a notice of alleged non-compliance.  First:  We recommend that you speak with your lawyer.   If your lawyer is not familiar with the process by which your franchise is evaluated, the process by which evaluations trigger warnings and the process by which warnings trigger terminatinos, we recommend that you or your lawyer contact a lawyer in Connecticut familiar with the process by which Doctor’s Associates, Inc. terminates franchises.   DAI has a  team of lawyers and para-professionals who work on the process of terminating Subway franchises, you should also have representation.

Q:  I just received a termination notice.  What should I do next?
A:  The first thing you should do is speak with your attorney.   A termination notice is  the beginning of the legal process by which Doctor’s Associates, Inc. seeks to take a franchise away from a franchisee.  As we said above,  DAI has a  team of lawyers and para-professionals who work on the process of terminating Subway franchises, you should also have representation.
Q:  I received a termination notice, but Doctor’s Associates, Inc. has offered me an interim arbitration agreement that will give me time to solve the problems,  should I sign the Agreement?
A:  Not without first speaking with an attorney who has experience with negotiating these agreements and arbitrating and/or litigation alleged violations of these interim awards.   Doctor’s Associates has often asks Subway™ Restaurant franchisees to sign probation agreements and/or an interim awards that contains language that waives substantial rights.  We recommend that Subway™ franchisees not sign any probation agreement or interim award without first speaking with a Connecticut  attorney with substantial experience with these agreements.

Q:  What’s wrong with signing an interim arbitration award to avoid the cost and expense of arbitration?
A:  There is nothing wrong with the concept.  The problem can be with the language of the agreement.  For example:  The standard franchise agreement may allow DAI to terminate a franchise if the franchisee is “out of compliance,”  but the interim award may allow DAI to terminate the franchise if the franchisee is “marked out of compliance.”  Under the franchise agreement language to terminate the franchise, DAI would need to prove that the franchise was actually out of compliance.  Under the language commonly used in the interim award, DAI would only need to prove that the franchisee was “marked out of compliance.”  This is just one example of substantial rights that can be lost with the change of a word or two.

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NOTE: Subway™ is a registered trademark of Doctors Associates, Inc.  The author is not affiliated with  Doctors Associates, Inc., Franchise Word Headquarters, Subway Real Estate, LLC or any other entity related to the franchisor of Subway™ Restaurants.

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