Financing a subway store

[Drax35]

Subway have a fines process which is called arbitration. They can make your store non compliant for something as simple as having bread crumbs on the floor during lunchtime.
This happened to myself, a former franchisee. Subway was awarded damages of $75,000. I told them to come and collect.
Luckily, the lockdown occurred and they left me alone for two years. I closed up shop and left once they started litigation.
The store was stripped and left a shell.

Sorry to hear that mate. I'm a former Subway franchisee, I saw your post and just had to register!

I luckily didn't get quite to arbitration, but scraped through when I suspect I wasn't supposed to (and with Subway happily billing me for their internal legal fees). I managed to sell up and get out a couple of years back, but it was a very unpleasant process. I w

Unfortunately there are still people queuing up to hand over their cash to open a franchise. Subway's entire business model is trash. If you're not EuroGarages or a DA, it isn't going to work for you. It's a shame that nothing seems to change the minds of the decent (if naive) individuals who are blinded by owning a slice of such a big brand.

 

[Mark T Jones]

It's a shame that nothing seems to change the minds of the decent (if naive) individuals who are blinded by owning a slice of such a big brand.

This is the critical point.

It's not just big brand either, it's the notion that you can buy success.

As the purchaser, the onus is on you and you alone to do due diligence and to be absolutely clear on your own rationale for buying into their offering.

If you expect the vendor or broker to help you to evaluate the decision, you're not cut out for business!

 

[Ian J]

It's a shame that nothing seems to change the minds of the decent (if naive) individuals who are blinded by owning a slice of such a big brand.

It's far cheaper to copy the concept without buying into the franchise.

30 years ago I looked at a franchise called Photopop which operated in shopping malls taking instant photos and putting them in keyrings etc. The company wanted a substantial five figure sum for a franchise plus a commitment to buy a second franchise a year later.

We were more interested in the technology which Photopop didn't want to discuss but it used video printers linked up to video cameras and monitor screens so we bought a camcorder and video printer for about £1,000 and linked them up to four rented TV screens and away we went at a fraction of the cost of buying a franchise

 

[Mark T Jones]

It's far cheaper to copy the concept without buying into the franchise.

30 years ago I looked at a franchise called Photopop which operated in shopping malls taking instant photos and putting them in keyrings etc. The company wanted a substantial five figure sum for a franchise plus a commitment to buy a second franchise a year later.

We were more interested in the technology which Photopop didn't want to discuss but it used video printers linked up to video cameras and monitor screens so we bought a camcorder and video printer for about £1,000 and linked them up to four rented TV screens and away we went at a fraction of the cost of buying a franchise

It will sometimes be the case & sometimes not

With a franchise you are ultimately buying a brand and a process - both things that many independents really aren't very good at.

A good one can work out very well (In F & B, failure rates of franchises are far lower than independents)

Sadly, some franchisors aren't either.

 

[Not a subway]

Sorry to hear that mate. I'm a former Subway franchisee, I saw your post and just had to register!

I luckily didn't get quite to arbitration, but scraped through when I suspect I wasn't supposed to (and with Subway happily billing me for their internal legal fees). I managed to sell up and get out a couple of years back, but it was a very unpleasant process. I w

Unfortunately there are still people queuing up to hand over their cash to open a franchise. Subway's entire business model is trash. If you're not EuroGarages or a DA, it isn't going to work for you. It's a shame that nothing seems to change the minds of the decent (if naive) individuals who are blinded by owning a slice of such a big brand.

You're not wrong when it comes to Corporate ownership. The thing is, they have so many units that they can sometimes dictate terms.
I know that C.J. Lang ( Spar) had a dispute with Subway and in the end they just removed all their units from their stores. There was not much that Subway could do about it.
Their whole compliance system is very predatory. My DAs offered no help or assistance. They thought they would get the store back for nothing. It's lying empty and I think they are liable for all rates, rent bills etc.