Complaint Review: NC Subway Group - Chapel Hill North Carolina

Tim Mann, COO of the NC Subway group holds orientations for potential franchisees. At these orientations he gives a presentation in which he explains the benefits of Subway stores being near one another.

He relays a story and draws a picture on a board depicting a Subway store on a military base...one right outside the military base...and one right down the road. He describes how the owner of one of the stores didn't want another Subway to open down the road but when one did in fact open down the road the “awareness increased the profits of all three stores in that close proximity”.

Tim Mann goes on to explain that this is due to a concept known as “awareness”. Most importantly Tim Mann assures the potential franchisees that Subway does not allow owners to have territorial rights.

In this same presentation Tim went over the procedures of the development agent who would be there to assist and how the company would help the franchisee throughout the process. Furthermore, he said development agents were “always scouting” locations in anticipation of new franchisees. I was given the distinct impression (through multiple statements) that upon payment of my money there would be available locations to view immediately.

I sat in on this presentation relieved to hear all of this. I had researched the business model in depth but had one serious concern. My major concern was that there might be too many Subways already and I would be coming “late to the party”. I had done extensive research of the Charlotte, NC market but remained unsure of the territorial rights issues. The presentation and subsequent phone calls and emails to and from the Subway office put these concerns to rest.

Directly after orientation I took a test and was told to go home and wait to find out if I will be invited to an interview.

I then was required to put together a business plan where I outlined my plans and hopes to open a Subway in "Charlotte North Carolina" where my wife was to be attending law school and we would be living.

I was required to show Subway (through this business plan) that I would be committed and ready to handle a franchise restaurant. On the Subway franchise website the corporation states “absentee owners not allowed”. I submitted a letter with my business plan that demonstrated my commitment. I explained that had resigned from my job in order to devote 100% of my time and effort to this Subway venture.

Again, on August 17th I answered an email to Kathy explaining that I would be opening a new Subway location in Charlotte NC.

After taking a test and scoring high enough I was invited to interview with Tim Mann. Over the phone I was told by Kathy I could bring the $15,000 dollars with me.

Upon arriving at the Subway office in Chapel Hill I was given a personality test and was asked to wait while it was “analyzed”. Next, Tim Mann sat me down and told mei was “just the type they are looking for”.

Directly after the meeting I was taken into another room where Kathy explained the next step in the process and asked if I would be paying my $15,000 franchise fee right then. I explained I would have the money within the week. At that point I asked her if I could get in touch with the development agent that scouts the Charlotte NC area. I was told by Kathy that I would not be allowed contact with the development agent until I signed the franchise agreement and paid the money.

A week after the interview I was eager to get started so I sent the money and signed the franchise agreement to Subway Group.

On September 25th, I gets an email from the development agent that I looked forward to working with. What followed came as a complete shock.

The development agent did not have multiple insights regarding scouted locations and an eager commitment to guide me in the process of opening a Subway Restuarant. In fact, everything Tim Mann portrayed the development to be could not have been further from the truth.

THE VERY FIRST EMAIL FROM THE DEVELOPMENT AGENT SAID

“I have no available sites in the greater Charlotte area at this time, Unfortunately the real estate market has really dried up...”

Being totally shocked, I called the development agents number immediately to set up a face to face meeting with the development agent “who was there to guide me” but could get no answer. Repeatedly, I called and got no answer or call back.

I spent every day for months searching Charlotte and surrounding cities for a potential location. Each time I submitted a possible location to the development agent through email, he would write back saying that he wouldn't even submit that location to the office because he ALREADY KNEW it had been previously turned down.

If Tim Mann's own development agent knew there were no available sites in Charlotte and his very first email suggested I go elsewhere... why on earth was this not relayed to me before?

If they had disclosed before I paid the $15,000 franchise fee that there were no viable locations in the Greater Charlotte area I would have never bought in and paid the franchise fee. My primary concern during my independent research of Subway as a viable income source was the saturation and territorial issues. These concerns were all put to rest by Tim Mann and his associates in order to manifest my assent to the contract. They reassured me of these things as well as boosted my confidence by describing “available locations”, “an eager development agent”, and representation of an “open market”.

All the while, they all knew, every location that has even the least amount of potential to survive had been previously turned down and would be again. 1) This material information was concealed from me when I requested the contact information of the development agent. 2) I was affirmatively lied to when I was told I was not allowed to speak to the development agent until I paid the money 3) Tim Mann's representations and assertions of “awareness and proximity” were outright lies intended to deceive potential franchisees into believing there can never be too many Subways and they are safe purchasing a franchise.

*In one of the final communications (via email) the development agent himself suggested that I discuss “exiting” with Tim Mann... as the Charlotte market is simply not a realistic option.

It has been over two years and I still have had no success of retrieving my $15,000 dollars. I tried threatening legal action to entice them to do the right thing and instead I received a letter from their corporate lawyers basically stating there was nothing I could do.  Unfortunately I can not afford to pay an attorney to fight for me, but hopefully I can prevent others from being decieved by this giant franchise that is literally stealing people's hard earned money.