February 13, 2019 Hartford, CT

We are urging all franchisees of Subway branded restaurants to review their leases and franchise agreements without delay.

As many Subway franchisees know, Alderman & Alderman has been  representing owners and operators of Subway franchisees in disputes with the franchisor, formerly Doctor’s Associates Inc (“DAI”) and now known as Doctor’s Associates, LLC (“DAL”) in arbitrations and litigation in state and federal courts for many years.    Historically, the majority of the disputes that we saw related to actions by DAI to terminate franchises for alleged non-compliance with the terms of the franchise agreement.   Recently, however, we have seen an increase in the number of calls related to the  real estate leases.

As Subway franchisees know, most acquisitions of Subway franchises come with  Subway Real Estate, LLC (“SRE”) requiring the  landlords to enter into leases with SRE and then SRE subleasing the premises to the  franchisees.

Over the past 18 months we have seen an increase in the number of franchisees contacting our firm with complaints about SRE.  Those complaints include claims:

  1. That SRE claimed that the form of written lease that was acceptable when the franchisee purchased the franchise, was unacceptable when the franchisee went to sell that same franchise;
  2. That SRE renewed a lease at a monthly rent above the rent  Landlord had agreed to accept from the franchisee;
  3. That SRE  renewed a lease despite the franchisee’s desire to close or relocate the restaurant;
  4. That SRE refused to renew a lease required to complete the sale of a franchise; and
  5. That SRE failed to pass along to the franchisee legal notices received from the franchisor.

Unfortunately, in some cases the franchisees discovered the problem after certain critical dates had passed, limiting the options available to them.

If you are a franchisee and you have not had your franchise agreement and lease reviewed by counsel recently, we urge you to ask your attorney to review them for you now.    In most cases, a lawyer can review your franchise agreement, your lease and any addendum to it for less than $800.

If your attorneys have questions, please encourage them to contact Myles Alderman.

Subway Franchisees Urged to Review Leases and Franchise Agreements
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