Franchisees and executives at burger chains, hotels and fruit-basket shops used to count on chummy relations to bolster their businesses. Those days are over.
Stressed by the hit to business from the coronavirus pandemic, store owners and corporate bosses at Subway, Econo Lodge and other companies are bickering publicly as never before.
Companies are asking franchisees to buy equipment and adopt new safety protocols, moves they say are necessary to reassure customers during the pandemic and to grow thereafter. Franchisees are pushing back on store upgrades, promotional discounts and fees they say are excessive and undermine their profits. Some are agitating to replace executives or suing to change practices.
“I get that franchising isn’t a democracy, but at the same time, it’s not a dictatorship,” said Keith Miller, who was among Subway franchisees resisting when the company asked operators during the summer to offer two foot-long sandwiches for $10, a price they said was unprofitable.
Subway, incorporated as Doctor’s Associates Inc., said it communicates with franchisees daily and has allowed them to defer or skip royalty payments during the pandemic. It ultimately reduced the foot-long-sub promotion to online only.
