I believe I am doing a public service by notifying the general public of the newest "scam" at SUBWAY HEADQUARTERS in Milford, CT.. Here's what they did to me: I put a $30,000 deposit down on a Subway Restaurant franchise located on East Tremont Avenue in the Bronx, NY. It was a successful franchise with over five years tenure. The restaurant was bringing in over $300,000 per year in sales. The people who run Subway Restaurants, a private corporation called Doctor's Associates Inc. invited me to attend a two week long training seminar at their headquarters in Milford, CT.. I paid them $7,500 for this priviledge and the franchise transfer fee.
After 8 days of training I had a 99 average in their course and had just graduated from the instore training program. It was a time to celebrate so I attended a cocktail party held at Subway Headquarters and I conversed and took photos with the guest of honor, Mr. Fred Deluca (CEO of DAI) and a lot of my training comrades from all over the world. I wasn't drinking like most but was asked by some of my classmates how I had acquired the funds necessary to buy my franchise. I really didn't want to talk about my past work experience so I handed out a business card from my adult entertainment agency. The card was not obscene nor did it have any advertisements of illegal acts or any nudity. The party was rather boring and I left early so I could rest up for the next day's training schedule.
The next morning I was promptly asked to leave class and go to the corporate security room where I was told that I was no longer eligible to be a Subway franchisee. I was told that I was not what they were looking for and was ushered off corporate grounds and told never to return. On my way out I informed the people from Subway that they had no legal grounds for the dismissal and that I would report them. I played my wild card and that was I have been a featured guest on many national talk shows like, "The O'Reilly Factor", "Hannitty and Colmes", "Judith Reagan Tonight", and Regis Philbin's show. I told the Subway people that I would go on television and cry about their mistreatment if they didn't allow me back into their training program.
By the next day they discovered I wasn't lying about my media connections and decided that the prudent move for them to make was to acquiesce. They told me that I could still be a franchisee if I could pass an open book final exam with an 80 score or above and if I would sign some agreement about conducting myself in what they considered a proper way as a Subway Franchisee. I told them I would sign anything they wanted me to and that I was going to be a good franchisee and that my adult entertainment days were coming to an end.
To make a long story short I studied the course material they gave me and passed the final exam with an 80 exactly. I took the exam off corporate grounds as I was still not allowed to be seen there. To be honest I missed a lot by being thrown out of the classroom program and I never really understood the complexity, or the conformity issues of running a successful franchise because I had no one to ask questions to. I was basically fed to the wolves and my attorney later explained to me that this was a case of "FRAUD" on Subway's part because they never really intended for me to be a franchisee for long. They wanted to get my money and that's all they wanted. Here's how the con works: Since I had no restaurant experience except the limited training I received during my aborted training seminar; I really didn't know such things as business slowed down in the northeast during the winter months because of decreased foot traffic due to the cold and the effect of the Holiday Season on a Subway Restaurant business.
I was clueless and every business move I made was a knee jerk reaction to whatever complication was heading my way. I raised prices at my franchise and the district manager was irate over it; although according to the franchise agreement I signed it was my choice. Four months into my tenure I was written up for a number of violations of the "Franchise Agreement" I signed and I according to the agreement was given specific remedy periods to correct the mistakes I had made. On March 10th 2008 I received two seperate termination notices through registered mail. The first violation was for being behind on the rent and I was given ten days from receiving the notice to pay up in full or be disenfranchised. The other termination notice was for improper wall displays, and uniform violations and according to the franchise agreement I was allotted 60 days to correct the deficiencies.
I was prepared to catch up on the back rent and follow the rules but before I had a chance to remedy anything I received another registered letter of termination; this one arriving on March 11th 2008. This one was different than the other registered letters of March 10th, 2008. This one declared that I had broken the terms of a completely different agreement I signed after training and according to Subway I was terminated upon receipt and this was automatic and superceded any other other termination notices. The registered letter was from DAI's legal department and was carbon copied to 3 top executives at Subway. The meaning of that registered letter could not be misconstrued; it said I was catagorically dismissed (No ifs ands or buts).
I immediately gave up on any remedy of the franchise's ills and made plans to find a new store front to move my Subway equipment to. I had bought the equipment and I was bound and determined to keep at least my equipment from this horrible experience. My number one fear was since I was behind on my rent and I was subleasing from Subway they would confiscate my equipment. It was bad enough that they had found a way to disenfranchise me without giving me a chance to remedy but stealing my restaurant equipment would be the ultimate slap in the face. So I quickly found a store front a few doors down from my franchise and I hired a crew of men to transform a furniture store into a deli/ice cream shop. The money I would have used to pay the back rent at the franchise was used for this endeavor. I rationalized that by starting this new business venture at least I could make a living and could later sue DAI for this very shady situation.
Something about the whole automatic dismissal didn't seem kosher but I had no time to investigate the matter because I had 9 short days to pay the rent and I wasn't going to pay the rent if I was being disenfranchised. I thought paying the back rent would be a complete waste of money since according to Subway it would not alleviate my problems with them. I had to take Subway's word that I was disenfranchised effective immediately. At least a month later my other business venture was ready to get started. All I had to do was move the Subway Restaurant equipment into the new business location and pray for the best. So imagine my shock when I was faced with the District Representative for Subway Restaurants at the old franchise door and he told me that he was here to rescue me. I asked him the million dollar question, "Did I really sign an agreement with your company that gave you the right to terminate me without remedy?" His reply, "Well not really but it doesn't really matter now." "What do you mean?" I asked dumbfoundedly.
"Well you didn't remedy anything so you broke the terms of the franchise agreement you did sign," he smirked and then added, "but I'm going to buy the restaurant from you anyway. How much did you pay for this joint?" he asked kicking the front door of my old franchise restaurant. Still in shock as I realized that I had been duped I replied, "$200,000. You want to give me $200,000?" I inquired disheartened. "Well I can't give you that--you've been disenfranchised; this equipment is worth nothing unless you're a franchisee; which you're not; so I'll do you a favor and buy the place complete for $100,000. If I were you I wouldn't hesitate," he pontificated. I told him he best leave while he still had teeth in his mouth. He told me, "Come on sell to me. What are you going to do with this used equipment? It's worthless to you." I told him I would do anything but sell to him and allow him and his corrupt company to defraud me and sweep their dirt beneath the carpet.
I said I was going to move the equipment to a new location and start up in business again. He then forewarned, " You'll be sorry if you move the equipment out of this restaurant. You have no idea how sorry you'll be." That was the last communication between John Musco and me. He was right though I was sorry that I moved the restaurant equipment since I was then sued by DAI for Federal Trademark Infringement and was compelled to participate in some "mandatory arbitration" that was called for by the terms of the franchise agreement I signed with them. Their arbitrater assigned fault to me in a breach of contract matter and awarded them close to $15,000 and the Federal judge awarded them close to $100,000 for my trampling of their trademark rights. That should have been the end but doesn't something about this matter sound seriously unfair. Why were they allowed to bring me to court but I had no recourse except arbitration.
The United States 9TH Circuit Court of Appeals ruled in Nagrampa that a clause in a franchise agreement giving the franchiser a unilateral right to go to court was "unconscionable". You see there are remedies for "injunctive relief" through arbitration so the court found no good reason for the franchiser to be able to take matters to court. Therefore the arbitration awarded Subway will be found to be contrary to public policy and negated and this will effect the foundation of their federal lawsuit against me so that will be negated too. It sure looks like a trial by jury is where this lawsuit of mine against Subway is heading. Subway will get their day in court at last and will get what's coming to them for their illegal and unethical actions. $2 million dollars is what we're suing DAI for and I'd be willing to bet that they don't want to see that jury. Scam fresh.