Franchisees sued the Subway sandwich chain today, claiming that a new franchise agreement will threaten control of a $500 million advertising trust fund.
The Subway Franchisee Advertising Fund Trust, which acts on behalf of more than 10,000 Franchisees worldwide, says the lawsuit seeks to prevent Subway from breaking terms of a trust agreement between the two parties..
A spokesman for Subway would not comment on the specifics of the dispute. He says company officials still hope a resolution can be reached. The advertising trust says a new franchise agreement introduced by Subway founder Fred DeLuca allows Subway at any time it chooses to redirect Franchisee advertising contributions away from the trust to a separate entity established by Subway.