[ DONATE TO RMN ] [ View Thread ] [ Return to Main Page ] [ Read Prev Article ] [ Read Next Article ] [ CGI Media News Room ] [ SUBSCRIBE TO RMN ]

RMN is Reader Supported

Our Goal for
JUL 6 - AUG 5:
$2500

Powered by FundRazr

Click Widget
or Click Here to contribute.

Checks & Money Orders:

Raye Allan Smith
P.O. Box 95
Ashtabula, OH 44005


Users Online:
102

Who Founded RMNews?


Dewitt Jones' Video
"Celebrate What's Right
With The World"


"When the
Starships Fly!"

Listen at YouTube


The Theme for The Obergon Chronicles

Listen at YouTube


The Obergon Chronicles ebook


RUMOR MILL
NEWS RADIO


CGI ROOM
Common Ground
Independent Media


WHAT ARE
THE FACTIONS?


THE AMAZING
RAYELAN ALLAN


BIORHYTHMS

LOTTO PICKS

OTHER WAYS TO DONATE





RUMOR MILL NEWS AGENTS WHO'VE BEEN INTERVIEWED ON RUMOR MILL NEWS RADIO

______________

NOVEMBER 2008

Kevin Courtois - Kcbjedi
______________

Dr Robin Falkov

______________

Melinda Pillsbury Hr1

Melinda Pillsbury Hr2

______________

Daneen Peterson

______________

Daneen Peterson

______________

Disclosure Hr1

Disclosure Hr2
______________

Scribe
______________

in_PHI_nitti
______________

Jasmine Hr1
Jasmine Hr2
______________

Tom Chittum Hr1
Tom Chittum Hr2
______________

Kevin Courtois
______________

Dr Syberlux
______________

Gary Larrabee Hr1
Gary Larrabee Hr2
______________

Kevin Courtois
______________

Pravdaseeker Hr1
Pravdaseeker Hr2
______________

DECEMBER 2008

Tom Chittum
______________

Crystal River
______________

Stewart Swerdlow Hr1
Stewart Swerdlow Hr2
______________

Janet Swerdlow Hr1
Janet Swerdlow Hr2
______________

Dr. Robin Falkov Hr1
Dr. Robin Falkov Hr2
Dr. Robin Falkov Hr3

JANUARY 2009 ______________

Patriotlad
______________

Patriotlad
______________

Crystal River
______________

Patriotlad
______________

Dr. Robin Falcov
______________

Patriotlad

FEBRUARY 2009

Find UFOs, The Apocalypse, New World Order, Political Analysis,
Alternative Health, Armageddon, Conspiracies, Prophecies, Spirituality,
Home Schooling, Home Mortgages and more, in:

The Rumor Mill News Reading Room

Subway Wants to Increase Franchisees’ Payments by 25%

Posted By: RumorMail
Date: Wednesday, 26-May-2021 12:11:48
www.rumormill.news/173194

In Response To: Lumber Firms Applaud, Home Builders Angry As U.S. Moves To Double Canadian Lumber Tariffs!! Who Paid off Whom?? (RumorMail)

Did you know that the No. 1 franchise, McDonald’s, costs anywhere between $1,008,000 and $2,214,080 MILION as an initial investment... That's just the franchise fee's. On top of that add-in workers, insurance, State taxes, local taxes and more taxes or fee's, the land, rentals and so, so much more. How is this not extortion?? It's a pay to play scheme and ONLY the Franchises win the game..

Lynda

*******************

The chain is giving operators whose agreements come up for renewal a choice: Accept new terms more favorable to the company or pay a 10% royalty rate.

By Jonathan Maze on May 24, 2021

Subway franchisees recently started pushing the company to dramatically reduce the ongoing fees they pay the company in a bid to keep more of them in business.

But Subway is moving in the other direction. The sandwich giant’s newest franchise agreement increases their ongoing royalty payments by 25%, numerous sources told Restaurant Business. The result would send higher what many say is an already unusually high royalty rate at a time when the chain is closing more than 1,000 locations a year.

Currently, the Milford, Conn.-based franchisor charges operators a base royalty of 8% of a store’s revenue—or $8 for every $100 in sales a location generates. That is high for a restaurant franchise system. The company’s rival sub chains charge 5% to 6.5%. Subway also charges operators 4.5% of revenues for a national ad fund. For a franchisee with an average revenue store, those payments come out to $45,625 a year.

In recent weeks, the company has presented operators with a choice: Pay a 10% royalty or keep the old royalty rate but with several new terms that many believe give the franchisor too much power.

“At this point, I am not sure whether jumping to 10% royalty is worse than the potential costs associated with the new agreement,” one operator said. The 10% royalty would increase charges for a typical franchisee by $7,300.

"Our franchise agreement and all its terms are disclosed in the FDD," Subway said in a statement, referring to the franchise disclosure document. "The terms are competitive with others in the QSR franchising industry."

According to a document seen by Restaurant Business, franchisees who opt for an 8% royalty would be prevented from speaking out against the brand; could pay steep charges if they close their stores; gives the company power to dictate store hours and pricing and even prevents operators from using the term “Subway.”

The non-disparagement clause would keep anybody associated with an operator or their store from saying anything negative about Subway.

Operators who close their stores before their franchise agreement expires would have to pay three years’ worth of royalty and ad fund payments—or $136,875 for the typical location. Operators could also be terminated if they close for two days during a 12-month period.

The franchisor could also dictate store hours and Subway would own anything in the store with its logo, even if the franchisee has bought the item.

The 8% royalty agreement also gives the company pricing power, requiring operators to comply with promotional programs. That latter part is a huge issue for a brand that has been trying to resurrect the $5 Footlong promotion only to meet intense resistance from franchisees.

The new agreement for 2021 covers new operators, renewed franchise agreements and any store that gets sold to different operators.

The new franchise agreement has only increased frustration on the part of Subway’s franchisees, who have been pushing back on various company strategies with increased intensity in recent years amid their own profit concerns.

The chain’s sales have struggled for years, and franchisees have closed 5,000 locations since Subway peaked in size at 27,000 U.S. locations in 2015. Operators have said they expect thousands of operators will walk away from the brand once their leases run out in the coming years, given the chain’s performance.

A group of Subway operators has started publishing open letters to the company arguing for major changes. Those requests more recently included a reduction in their royalty payments to 4.5% from 8% as a “sign of good faith” to keep more restaurants open.

UPDATE: This story was updated to add comment from Subway.


https://www.restaurantbusinessonline.com/financing/subway-wants-increase-franchisees-payments-25




If you enjoyed this article,
Please consider a monthly subscription to Rumor Mill News!!


RMN is an RA production.

Articles In This Thread

The only pay your RMN moderators receive
comes from ads.
Please consider putting RMN in
your ad blocker's whitelist.

Serving Truth and Freedom
Worldwide since 1996
 
Politically Incorrect News
Stranger than Fiction
Usually True!


Powered
by FundRazr
Click Widget
or Click Here to contribute.


Organic Sulfur 4 Health

^


AGENTS WEBPAGES

Provided free to RMN Agents

Organic Sulfur 4 Health

^


AGENTS WEBPAGES

Provided free to RMN Agents



[ DONATE TO RMN ] [ View Thread ] [ Return to Main Page ] [ Read Prev Article ] [ Read Next Article ] [ CGI Media News Room ] [ SUBSCRIBE TO RMN ]

The Rumor Mill News Reading Room is maintained by Forum Admin with WebBBS 5.12.