10 ms·

Subway Got Too Big – Franchisees Paid a Price

166 points by sharkweek 7y ago

_ah 7y ago
On my college campus Subway was the only "outside" food option that used the campus meal plan. All the rest was different storefronts for the same undistinguished catering company. I ate a lot of Subway in those days.
- shuckles 7y ago
  Same story at Stanford. There was an Ike’s but the catering cartel killed them.
  - mrosett 7y ago
    That was sad.
lanrh1836 7y ago
I don’t think anything about Subway has changed in 20+ years. Everything, including the distinct colors of every vegetable and shape of every meat, is exactly how I remember when I was a little kid.
alasdair_ 7y ago
"Subway, in an email, said that the franchisees who alleged misconduct were “anomalies,” and that its surveys and “listening tours” found that 80 percent of franchisees in the system want to keep working with the company." This was used to indicate how happy franchisees are but, to me, indicates the opposite. If one in five francisees don't want to work with Subway again, that's a huge red flag.
armitron 7y ago
Not really surprised that Subway is rotten in many ways. Absolutely terrible food, only fit for the garbage. Even the bread is loaded with carcinogens. I get depressed when I see these corporate behemoths treat people like cattle and literally feed them toxic waste earn billions.
geoffmunn 7y ago
I had Subway for lunch for over a year until one day I thought a bit too much about how the pork riblet sandwiches were extremely uniform in appearance, and I didn't like the way it was obviously processed to death. Subway is ok, but you can get much better, fresher options elsewhere.
- lamby 7y ago
  > you can get much better, fresher options elsewhere Of course and it's almost a cliché to say it for all chains :) What one needs to keep in mind is that such places are actually selling minimising regret and lack of cognitive overhead via consistency of output and menu options, not maximising pleasure or variety.
sureaboutthis 7y ago
First, I need to say I was a multi-unit Subway franchisee for 33 years until late last year. When Subway field agents inspected our stores, we would be marked up "out of compliance" but that statement sounds more serious than it actually is. Yes, you could technically lose your franchise for a handprint on the glass but, unless it was a constant problem, agents would only point it out with a remark on the form of "need to pay more attention to the glass". I need to call out the article treating the slicing thickness of cucumbers being a minor problem. It's not. It's sloppiness that should never happen but yes it happens to the best of us. We had a problem with one older store where some of the ceramic tile was breaking and coming loose. It took a while to get to it--like months--because we were shorthanded, extremely busy, and the tile was a type that was difficult to find. While our field rep would constantly get on us about it, because it was in the customer area, he was also understanding of our issues. Something to point out. You needed to be written up on compliance issues three times before you could get into trouble. We were inspected monthly so you had three months to fix issues. I never felt threatened about losing our franchise. I always felt respect from our DA. Most of the groaning I would hear at meetings was more from newer owners than "original owners" as we older franchisees sometimes called ourselves. Other groaning came from other areas not mentioned in the article. One was about marketing that didn't work including pricing of advertised deals. The other is the remodeling of older restaurants which would cost around the $200,000 level. If you owned 10 restaurants, that's a $2 million investment that someone of my age would never recover. Fred DeLuca was stuck in his ways and wouldn't change with the times. His sister, when she took over, was more amenable to change but didn't have the respect from higher ups in the system. That she "retired" is not the right word. The problems for most of us was marketing not competing well with the new competition causing sales to falter over the last several years. I sold out for that reason and because I didn't want to spend the money on remodeling. So the problems with this one development agent (DA) in California is something I never heard of before so it really is an anomaly to me, at least.
- pgrote 7y ago
  >First, I need to say I was a multi-unit Subway franchisee for 33 years until late last year. Thanks for for sharing your experience. Why did you leave? What was the process for selling the stores? Did you sell to someone new or someone already a Subway franchisee?
Operyl 7y ago
Side note: I can’t get NYT to load anymore. It’s convinced I’m in “incognito” when I most definitely am not. Same behavior in Chrome and Firefox. Has anybody else had it break on them?
- amelius 7y ago
  You could try a VPN.
- kjar 7y ago
  Yes. An imperfect hack, but at least you can read TFA: curl -O nyturl open local html
- croisillon 7y ago
  I had the same problem from work, where I definitely don't use incognito or ad-blockers
- OBLIQUE_PILLAR 7y ago
  NYT has a dollar per week online plan, you can afford it.
  - badfrog 7y ago
    > you can afford it You don't know that
  - uptown 7y ago
    Where?
    - deleted 7y ago
      [deleted]
- chupasaurus 7y ago
  Check out Bypass Paywalls[0] extension (Firefox and Chrome supported). [0]https://github.com/iamadamdev?tab=repositories https://github.com/iamadamdev?tab=repositories
Hypx 7y ago
Subway is just the lowest tier of sandwich shop I can think of lately. Could easily see them going the way of Quiznos and forced to restructure at some point in the future.
- TheAceOfHearts 7y ago
  They're alright for a quick salad if you have diet restrictions and you're busy. You can usually ask them to use spinach as the base instead of lettuce, which is much more nutritional.
- noisy_boy 7y ago
  I see lot of subway bashing all around. At one point in my life, I ate subway sandwiches for dinner, daily, for more than an year (can't remember exactly how long). The serving folks memorized how I wanted it and basically just asked "which one" I wanted (felt like hash lookup with the "alias" being the key and my custom requirements being the "value"). Never had any upset stomach etc so no complaints.
- i_am_nomad 7y ago
  You’re right, of course; Subway tastes like resignation and apathy. But even the most mundane things can surprise you every once in a while. Years ago, I walked into a random Subway, somewhere, and ordered some random sandwich. I asked for onions, olives, and yellow peppers on it. The energetic “sandwich artist” (their term, not mine) shook his head. “No, no,” he said, with a friendly sincerity, “that’s not a good combination for this sandwich. You should go with olives, yes, but also the green peppers and spinach, with the sweet onion sauce. Much more balanced that way.” I let him make it his way. I couldn’t even object, because I was struck speechless by this man, making probably minimum wage at the crappiest sandwich chain in America, caring so deeply about his work and my lunch. This man and his pride in his work, his determination to actually care, helped me see my own work in a new light, and honestly helped me climb out of the burnout I’d been suffering at the time. Whatever you do, do it the best you can; thanks for the reminder, Subway dude.
  - ctchocula 7y ago
fortran77 7y ago
Wow! From pedophile spokesmen, to shady business practices, to (reportedly) awful food. What a terrible organization.
jessaustin 7y ago
Don Fertman, Subway’s chief development officer and a veteran of the company for 38 years, said... that owning restaurants helps give development agents “a better understanding of all aspects of owning a small business.” He said the company reviews the agents’ work and expects them to uphold ethical standards, dealing with violations “on a case-by-case basis.” .... “Our business development agents are well-respected members of our business community,” [Fertman] said. “And when we hear these allegations, I would say that they are false.” He said he was not aware of any exceptions. This is literally the same C-level clown claiming (a) that all violations are investigated carefully and (b) that no violations exist. No ethical person could have heard about this ridiculous "development agent" scheme and remained silent about how obviously abusive it is, therefore no manager at Subway corporate is an ethical person. I'm also pretty disappointed in USA courts: did no judge ever look at these bankrupted immigrants and see someone deserving of justice? I haven't been in one of these dumps in at least a year, and after reading TFA I don't plan to go back. I'm just glad it's privately held, so the upcoming fire-sale to private equity will hurt the family and not honest investors. Not as much as they've hurt the poor entrepreneurs who trusted them, but that would be too much to expect in USA...
- MrBuddyCasino 7y ago
  How is it possible that Mr Patel is not in jail? This is just blatant fraud and corruption.
  - ninth_ant 7y ago
    Surely you understand the difference in burden of proof is different between a compelling news article and a court of law. It’s entirely plausible that he acted ethically and legally at all times and the authors or sources were heavily biased towards a certain editorial conclusion. Please apply some skepticism before reading one article and condemning people to jail.
    - MrBuddyCasino 7y ago
      He acquired restaurants personally of owners that were on his target list. This alone is a clear conflict of interest and if not legally, at least ethically very questionable. There is a source saying she was his "hit man". I'm sorry but this does not leave a lot of room for interpretation.
Animats 7y ago
Oh, the food vendor, not the transit system.
- dwighttk 7y ago
  Would the trains be franchises? Or the stations?
  - Animats 7y ago
    The NYC subways originally were franchises. They were operated by two private companies, Interborough Rapid Transit (IRT) and Brooklyn-Manhattan Transit (BMT) under franchises from the City of New York. The Independent Subway (IND) was a city-owned operation from the beginning. From the article title, I expected an article about early NYC subway history.
rudiv 7y ago
As always, Gujjus are hardcore.
bsenftner 7y ago
The USA is and always had been a fraud-friendly, criminal friendly nation. Hell, we fought a war to keep having slaves, and a good 1/3rd want them back. This nation is fucked.
- dfee 7y ago
  I hope [dead] is incoming on this comment.
  - orf 7y ago
    While his tone is completely off (and the slavery comment off-topic), he's not wrong at all about being 'fraud friendly'. The USA is much more lenient towards fraud in a lot of areas, especially financial. Working in this space I can tell you that US banks want as little friction as possible while onboarding, at a much greater risk of fraud. This is completely different from European banks. Hell, the USA still signs for card payments and uses cheques in nearly all places! I haven't seen either of those in about 20 years.
    - barney54 7y ago
      US banks want as little friction as possible on boarding versus European banks. Why would this be? Why are US banks less concerned about fraud versus Europe? One possible explanation could be that fraud may be less prevalent in the US than in Europe.
      - orf 7y ago
        Sure, that is indeed one explanation. However it would be an incorrect one by all accounts. The US just historically had a lot more smaller banks (more competition) and a lot less banking regulations than the EU. They don't have to look too hard at their customers, so they don't, and (I think, correctly) realize that they can simply write off the fraud with increased profits. And the best bit is that when they make a mistake they can just say: "sorry, your 'identity' has been stolen! Now you have to deal with it :)" rather than admit they allowed someone with a wig and a fake mustache to take out a loan in your name based on a set of completely, and obviously, fraudulent documents. At the consumer side, signing for a payment or using a cheque is completely ridiculous, and the USA is decades behind EMV rollout compared to the rest of the world (let alone contactless payments). By a few metrics the USA has the 3rd highest rate of card fraud, behind Mexico and Brazil, and the USA accounts for nearly 40% of the $21 billion worldwide total of card fraud. https://www.aciworldwide.com/-/media/files/collateral/trends/2016-global-consumer-card-fraud-where-card-fraud-is-coming-from.pdf https://www.aciworldwide.com/-/media/files/collateral/trends...
dontbenebby 7y ago
Long ago, I was a sandwich artist. One of our popular breeds was "cheesy bread". It was made the same way as italian herbs and cheese, minus the herbs. (For context, all bread in Subway arrives frozen, is thawed, then cooked, with any toppings applied before going into the oven) Corporate decided it should no longer be offered. We had several regulars upset, but couldn't serve it lest the corporate overlords revoke the franchise agreement. There were lots of little incidents like this where corporate would come in with some bullshit rule or decision, we'd lose customers, then they'd backpedal. I never saw any health issues - my manager was strict about labeling things with a date, and wrote people up if they didn't label since it forced him to throw stuff out. But it wouldn't surprise me if years and years of bullshit decisions nudge owners to cut corners.
Topgamer7 7y ago
I used to work at a consulting firm that had subway as a client. The Subway ecosystem is very political. Part of the process that corporate Subway has to deal with is IPC or Independent Purchasing Coop. They are a Coop that represents franchisees to battle with Subway's corporate agenda. The problem is that in order to have a larger say in the topics that IPC fights for, you need to own more stores. Basically as a solo franchise you are at Subway's will until buy enough stores to have clout. With the most powerful franchise owner being the the guy who owns almost all the stores in California. A difficulty with owning a new store is you have to get approved by the regional DA. Who is typically an IPC member, and provides all new franchises to friends and family. I'm fairly certain if you failed out of government politics, you could take a shot in the Subway ecosystem. Regarding the politics at Subway, corporate culture was cut throat. While I was there Fred was mostly hands off, allowing execs to fight for projects and visibility. The executive turnover was high. Probably because they were cut throat in their hiring negotiations. It was common for people to cycle out in under 5 years.
riceboy1701e 7y ago
Ever since the Jared scandal I absolutely refuse to step anywhere near, much less into, a Subway. And much better sandwich shops around. Except for Jimmy John's, whose owner wants to rid the globe of priceless animal treasures.
- jessaustin 7y ago
  You have to admit, the priceless animals are delicious...

166 points by sharkweek 7y ago

_ah 7y ago

On my college campus Subway was the only "outside" food option that used the campus meal plan. All the rest was different storefronts for the same undistinguished catering company. I ate a lot of Subway in those days.

shuckles 7y ago
Same story at Stanford. There was an Ike’s but the catering cartel killed them.
- mrosett 7y ago
  That was sad.

lanrh1836 7y ago

I don’t think anything about Subway has changed in 20+ years. Everything, including the distinct colors of every vegetable and shape of every meat, is exactly how I remember when I was a little kid.

alasdair_ 7y ago

"Subway, in an email, said that the franchisees who alleged misconduct were “anomalies,” and that its surveys and “listening tours” found that 80 percent of franchisees in the system want to keep working with the company." This was used to indicate how happy franchisees are but, to me, indicates the opposite. If one in five francisees don't want to work with Subway again, that's a huge red flag.

armitron 7y ago

Not really surprised that Subway is rotten in many ways. Absolutely terrible food, only fit for the garbage. Even the bread is loaded with carcinogens. I get depressed when I see these corporate behemoths treat people like cattle and literally feed them toxic waste earn billions.

geoffmunn 7y ago

I had Subway for lunch for over a year until one day I thought a bit too much about how the pork riblet sandwiches were extremely uniform in appearance, and I didn't like the way it was obviously processed to death. Subway is ok, but you can get much better, fresher options elsewhere.

lamby 7y ago
> you can get much better, fresher options elsewhere Of course and it's almost a cliché to say it for all chains :) What one needs to keep in mind is that such places are actually selling minimising regret and lack of cognitive overhead via consistency of output and menu options, not maximising pleasure or variety.

sureaboutthis 7y ago

First, I need to say I was a multi-unit Subway franchisee for 33 years until late last year. When Subway field agents inspected our stores, we would be marked up "out of compliance" but that statement sounds more serious than it actually is. Yes, you could technically lose your franchise for a handprint on the glass but, unless it was a constant problem, agents would only point it out with a remark on the form of "need to pay more attention to the glass". I need to call out the article treating the slicing thickness of cucumbers being a minor problem. It's not. It's sloppiness that should never happen but yes it happens to the best of us. We had a problem with one older store where some of the ceramic tile was breaking and coming loose. It took a while to get to it--like months--because we were shorthanded, extremely busy, and the tile was a type that was difficult to find. While our field rep would constantly get on us about it, because it was in the customer area, he was also understanding of our issues. Something to point out. You needed to be written up on compliance issues three times before you could get into trouble. We were inspected monthly so you had three months to fix issues. I never felt threatened about losing our franchise. I always felt respect from our DA. Most of the groaning I would hear at meetings was more from newer owners than "original owners" as we older franchisees sometimes called ourselves. Other groaning came from other areas not mentioned in the article. One was about marketing that didn't work including pricing of advertised deals. The other is the remodeling of older restaurants which would cost around the $200,000 level. If you owned 10 restaurants, that's a $2 million investment that someone of my age would never recover. Fred DeLuca was stuck in his ways and wouldn't change with the times. His sister, when she took over, was more amenable to change but didn't have the respect from higher ups in the system. That she "retired" is not the right word. The problems for most of us was marketing not competing well with the new competition causing sales to falter over the last several years. I sold out for that reason and because I didn't want to spend the money on remodeling. So the problems with this one development agent (DA) in California is something I never heard of before so it really is an anomaly to me, at least.

pgrote 7y ago
>First, I need to say I was a multi-unit Subway franchisee for 33 years until late last year. Thanks for for sharing your experience. Why did you leave? What was the process for selling the stores? Did you sell to someone new or someone already a Subway franchisee?

Operyl 7y ago

Side note: I can’t get NYT to load anymore. It’s convinced I’m in “incognito” when I most definitely am not. Same behavior in Chrome and Firefox. Has anybody else had it break on them?

amelius 7y ago
You could try a VPN.
kjar 7y ago
Yes. An imperfect hack, but at least you can read TFA: curl -O nyturl open local html
croisillon 7y ago
I had the same problem from work, where I definitely don't use incognito or ad-blockers
OBLIQUE_PILLAR 7y ago
NYT has a dollar per week online plan, you can afford it.
- badfrog 7y ago
  > you can afford it You don't know that
- uptown 7y ago
  Where?
  - deleted 7y ago
    [deleted]
chupasaurus 7y ago
Check out Bypass Paywalls[0] extension (Firefox and Chrome supported). [0]https://github.com/iamadamdev?tab=repositories https://github.com/iamadamdev?tab=repositories

Hypx 7y ago

Subway is just the lowest tier of sandwich shop I can think of lately. Could easily see them going the way of Quiznos and forced to restructure at some point in the future.

TheAceOfHearts 7y ago
They're alright for a quick salad if you have diet restrictions and you're busy. You can usually ask them to use spinach as the base instead of lettuce, which is much more nutritional.
noisy_boy 7y ago
I see lot of subway bashing all around. At one point in my life, I ate subway sandwiches for dinner, daily, for more than an year (can't remember exactly how long). The serving folks memorized how I wanted it and basically just asked "which one" I wanted (felt like hash lookup with the "alias" being the key and my custom requirements being the "value"). Never had any upset stomach etc so no complaints.
i_am_nomad 7y ago
You’re right, of course; Subway tastes like resignation and apathy. But even the most mundane things can surprise you every once in a while. Years ago, I walked into a random Subway, somewhere, and ordered some random sandwich. I asked for onions, olives, and yellow peppers on it. The energetic “sandwich artist” (their term, not mine) shook his head. “No, no,” he said, with a friendly sincerity, “that’s not a good combination for this sandwich. You should go with olives, yes, but also the green peppers and spinach, with the sweet onion sauce. Much more balanced that way.” I let him make it his way. I couldn’t even object, because I was struck speechless by this man, making probably minimum wage at the crappiest sandwich chain in America, caring so deeply about his work and my lunch. This man and his pride in his work, his determination to actually care, helped me see my own work in a new light, and honestly helped me climb out of the burnout I’d been suffering at the time. Whatever you do, do it the best you can; thanks for the reminder, Subway dude.
- ctchocula 7y ago

fortran77 7y ago

Wow! From pedophile spokesmen, to shady business practices, to (reportedly) awful food. What a terrible organization.

jessaustin 7y ago

Don Fertman, Subway’s chief development officer and a veteran of the company for 38 years, said... that owning restaurants helps give development agents “a better understanding of all aspects of owning a small business.” He said the company reviews the agents’ work and expects them to uphold ethical standards, dealing with violations “on a case-by-case basis.” .... “Our business development agents are well-respected members of our business community,” [Fertman] said. “And when we hear these allegations, I would say that they are false.” He said he was not aware of any exceptions. This is literally the same C-level clown claiming (a) that all violations are investigated carefully and (b) that no violations exist. No ethical person could have heard about this ridiculous "development agent" scheme and remained silent about how obviously abusive it is, therefore no manager at Subway corporate is an ethical person. I'm also pretty disappointed in USA courts: did no judge ever look at these bankrupted immigrants and see someone deserving of justice? I haven't been in one of these dumps in at least a year, and after reading TFA I don't plan to go back. I'm just glad it's privately held, so the upcoming fire-sale to private equity will hurt the family and not honest investors. Not as much as they've hurt the poor entrepreneurs who trusted them, but that would be too much to expect in USA...

MrBuddyCasino 7y ago
How is it possible that Mr Patel is not in jail? This is just blatant fraud and corruption.
- ninth_ant 7y ago
  Surely you understand the difference in burden of proof is different between a compelling news article and a court of law. It’s entirely plausible that he acted ethically and legally at all times and the authors or sources were heavily biased towards a certain editorial conclusion. Please apply some skepticism before reading one article and condemning people to jail.
  - MrBuddyCasino 7y ago
    He acquired restaurants personally of owners that were on his target list. This alone is a clear conflict of interest and if not legally, at least ethically very questionable. There is a source saying she was his "hit man". I'm sorry but this does not leave a lot of room for interpretation.

Animats 7y ago

Oh, the food vendor, not the transit system.

dwighttk 7y ago
Would the trains be franchises? Or the stations?
- Animats 7y ago
  The NYC subways originally were franchises. They were operated by two private companies, Interborough Rapid Transit (IRT) and Brooklyn-Manhattan Transit (BMT) under franchises from the City of New York. The Independent Subway (IND) was a city-owned operation from the beginning. From the article title, I expected an article about early NYC subway history.

rudiv 7y ago

As always, Gujjus are hardcore.

bsenftner 7y ago

The USA is and always had been a fraud-friendly, criminal friendly nation. Hell, we fought a war to keep having slaves, and a good 1/3rd want them back. This nation is fucked.

dfee 7y ago
I hope [dead] is incoming on this comment.
- orf 7y ago
  While his tone is completely off (and the slavery comment off-topic), he's not wrong at all about being 'fraud friendly'. The USA is much more lenient towards fraud in a lot of areas, especially financial. Working in this space I can tell you that US banks want as little friction as possible while onboarding, at a much greater risk of fraud. This is completely different from European banks. Hell, the USA still signs for card payments and uses cheques in nearly all places! I haven't seen either of those in about 20 years.
  - barney54 7y ago
    US banks want as little friction as possible on boarding versus European banks. Why would this be? Why are US banks less concerned about fraud versus Europe? One possible explanation could be that fraud may be less prevalent in the US than in Europe.
    - orf 7y ago
      Sure, that is indeed one explanation. However it would be an incorrect one by all accounts. The US just historically had a lot more smaller banks (more competition) and a lot less banking regulations than the EU. They don't have to look too hard at their customers, so they don't, and (I think, correctly) realize that they can simply write off the fraud with increased profits. And the best bit is that when they make a mistake they can just say: "sorry, your 'identity' has been stolen! Now you have to deal with it :)" rather than admit they allowed someone with a wig and a fake mustache to take out a loan in your name based on a set of completely, and obviously, fraudulent documents. At the consumer side, signing for a payment or using a cheque is completely ridiculous, and the USA is decades behind EMV rollout compared to the rest of the world (let alone contactless payments). By a few metrics the USA has the 3rd highest rate of card fraud, behind Mexico and Brazil, and the USA accounts for nearly 40% of the $21 billion worldwide total of card fraud. https://www.aciworldwide.com/-/media/files/collateral/trends/2016-global-consumer-card-fraud-where-card-fraud-is-coming-from.pdf https://www.aciworldwide.com/-/media/files/collateral/trends...

dontbenebby 7y ago

Long ago, I was a sandwich artist. One of our popular breeds was "cheesy bread". It was made the same way as italian herbs and cheese, minus the herbs. (For context, all bread in Subway arrives frozen, is thawed, then cooked, with any toppings applied before going into the oven) Corporate decided it should no longer be offered. We had several regulars upset, but couldn't serve it lest the corporate overlords revoke the franchise agreement. There were lots of little incidents like this where corporate would come in with some bullshit rule or decision, we'd lose customers, then they'd backpedal. I never saw any health issues - my manager was strict about labeling things with a date, and wrote people up if they didn't label since it forced him to throw stuff out. But it wouldn't surprise me if years and years of bullshit decisions nudge owners to cut corners.

Topgamer7 7y ago

I used to work at a consulting firm that had subway as a client. The Subway ecosystem is very political. Part of the process that corporate Subway has to deal with is IPC or Independent Purchasing Coop. They are a Coop that represents franchisees to battle with Subway's corporate agenda. The problem is that in order to have a larger say in the topics that IPC fights for, you need to own more stores. Basically as a solo franchise you are at Subway's will until buy enough stores to have clout. With the most powerful franchise owner being the the guy who owns almost all the stores in California. A difficulty with owning a new store is you have to get approved by the regional DA. Who is typically an IPC member, and provides all new franchises to friends and family. I'm fairly certain if you failed out of government politics, you could take a shot in the Subway ecosystem. Regarding the politics at Subway, corporate culture was cut throat. While I was there Fred was mostly hands off, allowing execs to fight for projects and visibility. The executive turnover was high. Probably because they were cut throat in their hiring negotiations. It was common for people to cycle out in under 5 years.

riceboy1701e 7y ago

Ever since the Jared scandal I absolutely refuse to step anywhere near, much less into, a Subway. And much better sandwich shops around. Except for Jimmy John's, whose owner wants to rid the globe of priceless animal treasures.

jessaustin 7y ago
You have to admit, the priceless animals are delicious...