Subway

The franchise fee of $15,000 is significantly below industry typical ranges of $25,000-$37,500. What does this lower fee not cover that franchisees in other systems receive?

With 84 litigation cases in the past 3 years and the franchisor as defendant in 50 of them, what are the primary complaint categories and have settlements or judgments resulted in operational or policy changes?

Why has the system contracted by 631 units (-3.1%) in the past year while the transfer rate remains at 7.3%? What is driving the difference between transfers and net unit growth?

The non-compete clause restricts franchisees to only 1 year and 3 miles post-termination compared to typical industry standards of 2 years and 5-10 miles. How does this shorter restriction protect your investment if a franchisee exits near your location?

Non-renewal rate is listed at 0.15 (15%). What percentage of franchisees choose not to renew at the end of their 20-year initial term, and what are the primary reasons cited?

The initial term is 20 years with a single 20-year renewal option (40 years total potential), both exceeding typical ranges. What is the franchisor's typical renewal approval rate, and are there conditions that could result in non-renewal?

Can you provide a detailed breakdown of the 84 litigation cases by type (e.g., franchisee disputes, employment claims, property disputes, regulatory violations) and outcome?

With 881 units closed in 2024, 733 in 2023, and 995 in 2022, is there a correlation between closures and specific operational or market factors you can document?

The royalty rate of 8.0% is above the typical quick-service restaurant range of 5.0-6.0%. How does this higher royalty compare to sales-to-unit ratios, and what is the average unit volume (AUV) to justify this rate?

Why does the franchisor not provide Item 19 financial performance data? Are you willing to provide historical unit-level profitability data from a representative sample of franchisees?

The ad fund rate of 4.5% exceeds typical ranges of 2.0-4.0%. How is this fund allocated between national/regional marketing and local store support, and what ROI metrics does the franchisor track?

Personal guarantee requirements place principal owners at unlimited personal liability for all franchise obligations. What specific scenarios have triggered enforcement of personal guarantees in recent litigation cases?

With no exclusive territory or encroachment protection, how does the franchisor prevent cannibalization between nearby units, and have you experienced franchisee complaints about this?

The technology fee of $75/month is substantially below typical ranges of $110-$408. What point-of-sale, delivery platform integration, and digital ordering capabilities are included, and are there additional technology costs not listed?

Pending litigation cases show as N/A—how many cases are currently pending as of the disclosure update date, and what is the expected timeline for resolution?

What is the average time from franchisee request to franchisor approval for unit transfers, and what approval rate can a franchisee expect if they wish to sell their unit before the 20-year term expires?

Given the system contracted 1,645 units over 3 years, what strategic initiatives is the franchisor implementing to stabilize and grow unit count?

The termination causes count is 14, below the typical 15-20 range. Does this mean the franchise agreement provides fewer grounds for franchisor termination, and if so, what are the specific termination causes included?

Can you provide the renewal fee amount? At what point in the franchise agreement is this fee disclosed, and has the fee increased for renewals compared to earlier franchise cohorts?

What percentage of the 1,416-1,764 annual unit transfers are to new franchisees versus existing franchisee-to-franchisee transfers, and does the franchisor have right of first refusal on transfers?