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Westlake Legal Group > Posts tagged "Franchises"

McDonald’s Details What Dining In Will Look Like

Clean the digital kiosks each time a customer orders. Place “closed” signs on certain tables to promote social-distancing. Scrub the bathrooms every half-hour.

Those were among the instructions in a 59-page guide that McDonald’s recently distributed to franchisees outlining procedures for safely reopening the fast-food chain’s dining rooms across the country.

The guide — titled “The Dine-In Reopening Playbook” — does not outline a strict timeline, giving franchisees some discretion to decide when to reopen, according to a copy reviewed by The New York Times.

Once a local government says that restaurants can admit dine-in guests, a McDonald’s official in that region will decide whether reopening can begin, it says. Then individual franchise owners will make a decision about whether to go through with reopening.

So far, fewer than 100 McDonald’s locations have opened dining rooms in the states where that is already allowed. A McDonald’s spokesman, Jesse Lewin, said the company and its franchisees had been discussing reopening plans “for the last several weeks.” The company worked with epidemiologists as well as state and local health officials to assemble the guidelines, he said.

In addition to the rules about kiosks and bathrooms, the guide calls for all “high-touch” areas to be disinfected every 30 minutes and recommends putting signage on the floor to prevent customers from brushing past one another as they move around.

ImageWestlake Legal Group merlin_171114255_115637cc-eb63-4c2b-8dc8-0365ff5bac0f-articleLarge McDonald’s Details What Dining In Will Look Like restaurants McDonald's Corporation Franchises Fast Food Industry Coronavirus (2019-nCoV)
Credit…Sarah Blesener for The New York Times

The details of the guide were earlier reported by The Wall Street Journal.

Unlike the small, independent restaurants that have been battered during the pandemic, McDonald’s was in a good position to weather the economic fallout. Its drive-throughs have stayed open, and they accounted for about two-thirds of the company’s revenue before the crisis.

But the company’s bottom line has still taken a hit. After reporting a decline in sales last month, the company’s chief executive, Chris Kempczinski, warned that “the exact trajectory of our recovery is highly uncertain.”

And workers and labor advocates have criticized the company for failing to provide sufficient protective equipment to employees working at the drive-throughs.

In the reopening guide, McDonald’s said it would require employees to have their temperatures taken before work, wear gloves and face masks, and wash their hands every hour.

“For dine-in orders, the bag will be placed on a clean sanitized tray and delivered to the customer while maintaining social-distance requirements,” the guide says. “Do not forget napkins and straws!”

Credit…Erika P. Rodriguez for The New York Times

Virtually every restaurant owner in the United States — from Michelin-star chefs to fast-food executives — has been wrestling with how to make dining rooms safe in the coronavirus era. Some owners are planning to install plexiglass barriers between booths, while others are turning to paper menus and disposable cutlery.

McDonald’s is not the only fast-food chain moving closer to reopening. Restaurant Brands International, the parent company of Burger King and Popeyes, said this week that it would begin reopening dining rooms with a number of new safety precautions, including “beautiful tabletop signage” to indicate which tables are open.

The McDonald’s guide also includes a Q. and A. section on how to manage guests who refuse to comply with social-distancing guidelines.

“Always approach a situation calmly and treat everyone with respect,” the guide says. “Inform the guest: I apologize for any inconvenience, but to help keep everyone safe, we would like all our guests to maintain a safe distance of six feet from each other and our staff.”

Credit…Gabriela Bhaskar for The New York Times

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Drive-Throughs Are Now a Lifeline for Fast-Food Chains

Westlake Legal Group 01virus-drivethroughs-1-facebookJumbo Drive-Throughs Are Now a Lifeline for Fast-Food Chains Texas Roadhouse Inc Taco Bell Corp restaurants Quarantines McDonald's Corporation Franchises Food Fight for 15 Fast Food Industry Epidemics Coronavirus (2019-nCoV)

For decades, the fast-food drive-through has been a greasy symbol of Americana, a roadside ritual for millions of travelers with a hankering for burgers and fries.

Now, the drive-through, with its brightly-colored signage and ketchup-stained paper bags, has taken on a new importance in the age of social distancing.

Over the last month and a half, the coronavirus pandemic has forced small, independent restaurants to close and Michelin star chefs to experiment with takeout. But despite the chaos, the nation’s drive-throughs have continued to churn out orders, providing a financial reprieve for chains like McDonald’s and Burger King even as fast-food workers have become increasingly concerned about the threat of infection.

While restaurant dining rooms sit empty, many people have started treating drive-throughs like grocery stores, making only occasional trips but placing larger orders. Popeyes has introduced “family bundles” to capitalize on the demand for bigger meals. Taco Bell is offering a promotion — free Doritos Locos Tacos on Tuesdays — that has increased traffic at some of its drive-throughs, overwhelming employees. And dine-in chains like Texas Roadhouse have converted empty parking lots into temporary drive-through lanes.

“For many restaurants, it’s an absolute savior,” said Jonathan Maze, the executive editor of Restaurant Business Magazine.

Credit…Tag Christof for The New York Times
Credit…Tag Christof for The New York Times

At many chains, including McDonald’s, the drive-through accounted for as much as 70 percent of revenue before the crisis, generating billions of dollars for the industry every month. During the pandemic, sales have mostly held steady. In March, drive-throughs generated $8.3 billion across the fast-food industry, an increase from $8 billion in sales over the same period in 2019, according to data from the NPD Group, a market research firm.

But while it has shielded fast-food companies from the worst economic effects of the pandemic, the drive-through has become a dangerous place for some low-wage workers, who cook and serve food in cramped conditions, often without access to protective equipment. In a number of states, workers at McDonald’s and other chains have staged walkouts and called for increased safety precautions.

Like other businesses that have remained open, drive-throughs are often tinged with fear. Some customers roll down their windows just far enough to stick out a pair of tongs. Others arrive armed with Lysol spray and plastic wrap.

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“They’re just as scared of us as we are of them,” said Jamila Allen, 23, who works at a Freddy’s in North Carolina. An effort by McDonald’s locations in Los Angeles to lighten the mood of the workers with a calendar of ostensibly morale-boosting events like Crazy Sock Day was widely ridiculed as tone-deaf.

And despite repeated assurances from the major fast-food chains that gloves and face masks are on the way, anxious (and often mask-less) employees working at drive-throughs struggle to maintain social distance, even with fewer workers on each shift.

“It’s impossible to keep six feet apart in the workplace and definitely impossible to stay that far away from customers,” said Terrence Wise, 40, a shift manager at a McDonald’s in Kansas City, Mo. “If you’re taking a customer’s money and they cough or sneeze, you’re on alert and on edge.”

The Fight for $15 campaign, which works with fast-food employees to advocate a higher minimum wage, has identified dozens of McDonald’s workers in at least 14 states who have tested positive for the coronavirus. David Tovar, a McDonald’s spokesman, said the company has taken a range of steps to protect its work force, including putting up barriers and allowing employees to use trays to slide cash and food back and forth. “Customers can lift it off the tray themselves, so there’s no contact between the employee and the customer,” Mr. Tovar said.

Of all its rivals in the fast-food and casual dining business, McDonald’s was arguably in the best position to weather the pandemic. Over the last year, the company has spent hundreds of millions of dollars on its drive-throughs, installing digital menu boards that prod customers to place larger, more expensive orders. At some locations, McDonald’s has experimented with cameras that recognize license-plate numbers, allowing the company to tailor a list of suggested purchases from a customer’s previous orders.

During the pandemic, McDonald’s has made a handful of lower-tech adjustments, simplifying its menu to make lines move faster by cutting all-day breakfast and using only one type of lettuce. “The less choices you have for your crew to make, the more efficient and fast they can be,” Mr. Tovar said.

Credit…Tag Christof for The New York Times
Credit…Tag Christof for The New York Times

Taco Bell has also changed how it runs its drive-throughs. In the past, the company mostly filled relatively small orders. Now, customers are buying much larger meals — enough food to put leftovers in the refrigerator, according to Mike Grams, the chain’s chief operating officer.

“They’re locked up in their house, and so when they come out, and they go to a drive-through, they want to buy more,” Mr. Grams said.

To accommodate those new ordering habits, the company has moved its drive-through workers from the window to the now-vacant dine-in area, opening up space for cooks to assemble larger, more complicated orders in the kitchen.

But not every major chain has been able to come up with pandemic workarounds. Even before the coronavirus, chains like Ruby Tuesday and TGI Fridays, with large dining rooms designed for leisurely meals, had been struggling, closing locations as once-loyal patrons defected to faster, trendier options like Chipotle.

Without drive-throughs, these kinds of dine-in restaurants — many of which have taken on significant debt since the 2008 financial crisis — may struggle.

“We’ll see some large dining chains go under,” said Aaron Allen, a restaurant consultant. “It’ll finally be the death knell for them.”

Over the next year, food critics and industry experts say, the closures of large dine-in chains, mom-and-pop restaurants and fine-dining establishments could transform the restaurant industry, creating a more uniform, less vibrant landscape. The pandemic has exposed the gulf between the haves and have-nots, accelerating the demise of beloved but cash-strapped restaurants as the major fast-food chains continue to bring in revenue. Historically, recessions have benefited chains like McDonald’s and Burger King, which typically see higher sales when people are cutting back on spending.

Still, the pandemic has caused plenty of financial pain even for companies whose drive-throughs are humming. The chief executive of McDonald’s, Chris Kempczinski, has taken a 50 percent pay cut. After reporting a decline in sales on Thursday, Mr. Kempczinski warned that “the exact trajectory of our recovery is highly uncertain.”

And individual franchisees may also struggle, especially in the short term. In April, the National Owners Association — an advocacy group that represents some McDonald’s franchisees — clashed with the company over rent payments and other issues.

Over all, however, the corporate muscle of the big fast-food companies puts franchisees in an enviable position compared to most small businesses, especially independent restaurants. At Burger King and Popeyes, individual store owners have gotten help from corporate “franchisee liquidity teams” in applying for the loans under the government’s small-business relief program.

Credit…Tag Christof for The New York Times
Credit…Tag Christof for The New York Times

After it was criticized by lawmakers and restaurateurs, Shake Shack returned the $10 million loan it had gotten through the program. One reason the chain needed that money in the first place: It does not have any drive-throughs. In the next few years, industry experts say, more dine-in chains like Texas Roadhouse may begin experimenting with the format, given how necessary it has been during the coronavirus shutdown.

Ultimately, the pandemic could provide “a moment of redemption” for drive-throughs, said Adam Chandler, the author of “Drive-Thru Dreams,” a history of fast food.

Since it emerged in the 1950s, the format has faced criticism from public health officials and urban beautification campaigns, prompting cities like Minneapolis to ban the construction of new drive-throughs.

These days, however, the experience of ordering a burger from behind the steering wheel feels more like a reasonable safety precaution than a cold transaction.

And to some, it also feels refreshingly normal.

“It speaks to something that is extremely unremarkable,” Mr. Chandler said. “That you can do that at a time of enormous upheaval is meaningful. It’s poignant in this really chaotic moment.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Drive-Throughs Are Now a Lifeline for Fast-Food Chains

Westlake Legal Group 01virus-drivethroughs-1-facebookJumbo Drive-Throughs Are Now a Lifeline for Fast-Food Chains Texas Roadhouse Inc Taco Bell Corp restaurants Quarantines McDonald's Corporation Franchises Food Fight for 15 Fast Food Industry Epidemics Coronavirus (2019-nCoV)

For decades, the fast-food drive-through has been a greasy symbol of Americana, a roadside ritual for millions of travelers with a hankering for burgers and fries.

Now, the drive-through, with its brightly-colored signage and ketchup-stained paper bags, has taken on a new importance in the age of social distancing.

Over the last month and a half, the coronavirus pandemic has forced small, independent restaurants to close and Michelin star chefs to experiment with takeout. But despite the chaos, the nation’s drive-throughs have continued to churn out orders, providing a financial reprieve for chains like McDonald’s and Burger King even as fast-food workers have become increasingly concerned about the threat of infection.

While restaurant dining rooms sit empty, many people have started treating drive-throughs like grocery stores, making only occasional trips but placing larger orders. Popeyes has introduced “family bundles” to capitalize on the demand for bigger meals. Taco Bell is offering a promotion — free Doritos Locos Tacos on Tuesdays — that has increased traffic at some of its drive-throughs, overwhelming employees. And dine-in chains like Texas Roadhouse have converted empty parking lots into temporary drive-through lanes.

“For many restaurants, it’s an absolute savior,” said Jonathan Maze, the executive editor of Restaurant Business Magazine.

Credit…Tag Christof for The New York Times
Credit…Tag Christof for The New York Times

At many chains, including McDonald’s, the drive-through accounted for as much as 70 percent of revenue before the crisis, generating billions of dollars for the industry every month. During the pandemic, sales have mostly held steady. In March, drive-throughs generated $8.3 billion across the fast-food industry, an increase from $8 billion in sales over the same period in 2019, according to data from the NPD Group, a market research firm.

But while it has shielded fast-food companies from the worst economic effects of the pandemic, the drive-through has become a dangerous place for some low-wage workers, who cook and serve food in cramped conditions, often without access to protective equipment. In a number of states, workers at McDonald’s and other chains have staged walkouts and called for increased safety precautions.

Like other businesses that have remained open, drive-throughs are often tinged with fear. Some customers roll down their windows just far enough to stick out a pair of tongs. Others arrive armed with Lysol spray and plastic wrap.

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“They’re just as scared of us as we are of them,” said Jamila Allen, 23, who works at a Freddy’s in North Carolina. An effort by McDonald’s locations in Los Angeles to lighten the mood of the workers with a calendar of ostensibly morale-boosting events like Crazy Sock Day was widely ridiculed as tone-deaf.

And despite repeated assurances from the major fast-food chains that gloves and face masks are on the way, anxious (and often mask-less) employees working at drive-throughs struggle to maintain social distance, even with fewer workers on each shift.

“It’s impossible to keep six feet apart in the workplace and definitely impossible to stay that far away from customers,” said Terrence Wise, 40, a shift manager at a McDonald’s in Kansas City, Mo. “If you’re taking a customer’s money and they cough or sneeze, you’re on alert and on edge.”

The Fight for $15 campaign, which works with fast-food employees to advocate a higher minimum wage, has identified dozens of McDonald’s workers in at least 14 states who have tested positive for the coronavirus. David Tovar, a McDonald’s spokesman, said the company has taken a range of steps to protect its work force, including putting up barriers and allowing employees to use trays to slide cash and food back and forth. “Customers can lift it off the tray themselves, so there’s no contact between the employee and the customer,” Mr. Tovar said.

Of all its rivals in the fast-food and casual dining business, McDonald’s was arguably in the best position to weather the pandemic. Over the last year, the company has spent hundreds of millions of dollars on its drive-throughs, installing digital menu boards that prod customers to place larger, more expensive orders. At some locations, McDonald’s has experimented with cameras that recognize license-plate numbers, allowing the company to tailor a list of suggested purchases from a customer’s previous orders.

During the pandemic, McDonald’s has made a handful of lower-tech adjustments, simplifying its menu to make lines move faster by cutting all-day breakfast and using only one type of lettuce. “The less choices you have for your crew to make, the more efficient and fast they can be,” Mr. Tovar said.

Credit…Tag Christof for The New York Times
Credit…Tag Christof for The New York Times

Taco Bell has also changed how it runs its drive-throughs. In the past, the company mostly filled relatively small orders. Now, customers are buying much larger meals — enough food to put leftovers in the refrigerator, according to Mike Grams, the chain’s chief operating officer.

“They’re locked up in their house, and so when they come out, and they go to a drive-through, they want to buy more,” Mr. Grams said.

To accommodate those new ordering habits, the company has moved its drive-through workers from the window to the now-vacant dine-in area, opening up space for cooks to assemble larger, more complicated orders in the kitchen.

But not every major chain has been able to come up with pandemic workarounds. Even before the coronavirus, chains like Ruby Tuesday and TGI Fridays, with large dining rooms designed for leisurely meals, had been struggling, closing locations as once-loyal patrons defected to faster, trendier options like Chipotle.

Without drive-throughs, these kinds of dine-in restaurants — many of which have taken on significant debt since the 2008 financial crisis — may struggle.

“We’ll see some large dining chains go under,” said Aaron Allen, a restaurant consultant. “It’ll finally be the death knell for them.”

Over the next year, food critics and industry experts say, the closures of large dine-in chains, mom-and-pop restaurants and fine-dining establishments could transform the restaurant industry, creating a more uniform, less vibrant landscape. The pandemic has exposed the gulf between the haves and have-nots, accelerating the demise of beloved but cash-strapped restaurants as the major fast-food chains continue to bring in revenue. Historically, recessions have benefited chains like McDonald’s and Burger King, which typically see higher sales when people are cutting back on spending.

Still, the pandemic has caused plenty of financial pain even for companies whose drive-throughs are humming. The chief executive of McDonald’s, Chris Kempczinski, has taken a 50 percent pay cut. After reporting a decline in sales on Thursday, Mr. Kempczinski warned that “the exact trajectory of our recovery is highly uncertain.”

And individual franchisees may also struggle, especially in the short term. In April, the National Owners Association — an advocacy group that represents some McDonald’s franchisees — clashed with the company over rent payments and other issues.

Over all, however, the corporate muscle of the big fast-food companies puts franchisees in an enviable position compared to most small businesses, especially independent restaurants. At Burger King and Popeyes, individual store owners have gotten help from corporate “franchisee liquidity teams” in applying for the loans under the government’s small-business relief program.

Credit…Tag Christof for The New York Times
Credit…Tag Christof for The New York Times

After it was criticized by lawmakers and restaurateurs, Shake Shack returned the $10 million loan it had gotten through the program. One reason the chain needed that money in the first place: It does not have any drive-throughs. In the next few years, industry experts say, more dine-in chains like Texas Roadhouse may begin experimenting with the format, given how necessary it has been during the coronavirus shutdown.

Ultimately, the pandemic could provide “a moment of redemption” for drive-throughs, said Adam Chandler, the author of “Drive-Thru Dreams,” a history of fast food.

Since it emerged in the 1950s, the format has faced criticism from public health officials and urban beautification campaigns, prompting cities like Minneapolis to ban the construction of new drive-throughs.

These days, however, the experience of ordering a burger from behind the steering wheel feels more like a reasonable safety precaution than a cold transaction.

And to some, it also feels refreshingly normal.

“It speaks to something that is extremely unremarkable,” Mr. Chandler said. “That you can do that at a time of enormous upheaval is meaningful. It’s poignant in this really chaotic moment.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Drive-Throughs Are Now a Lifeline for Fast-Food Chains

Westlake Legal Group 01virus-drivethroughs-1-facebookJumbo Drive-Throughs Are Now a Lifeline for Fast-Food Chains Texas Roadhouse Inc Taco Bell Corp restaurants Quarantines McDonald's Corporation Franchises Food Fight for 15 Fast Food Industry Epidemics Coronavirus (2019-nCoV)

For decades, the fast-food drive-through has been a greasy symbol of Americana, a roadside ritual for millions of travelers with a hankering for burgers and fries.

Now, the drive-through, with its brightly-colored signage and ketchup-stained paper bags, has taken on a new importance in the age of social distancing.

Over the last month and a half, the coronavirus pandemic has forced small, independent restaurants to close and Michelin star chefs to experiment with takeout. But despite the chaos, the nation’s drive-throughs have continued to churn out orders, providing a financial reprieve for chains like McDonald’s and Burger King even as fast-food workers have become increasingly concerned about the threat of infection.

While restaurant dining rooms sit empty, many people have started treating drive-throughs like grocery stores, making only occasional trips but placing larger orders. Popeyes has introduced “family bundles” to capitalize on the demand for bigger meals. Taco Bell is offering a promotion — free Doritos Locos Tacos on Tuesdays — that has increased traffic at some of its drive-throughs, overwhelming employees. And dine-in chains like Texas Roadhouse have converted empty parking lots into temporary drive-through lanes.

“For many restaurants, it’s an absolute savior,” said Jonathan Maze, the executive editor of Restaurant Business Magazine.

Credit…Tag Christof for The New York Times
Credit…Tag Christof for The New York Times

At many chains, including McDonald’s, the drive-through accounted for as much as 70 percent of revenue before the crisis, generating billions of dollars for the industry every month. During the pandemic, sales have mostly held steady. In March, drive-throughs generated $8.3 billion across the fast-food industry, an increase from $8 billion in sales over the same period in 2019, according to data from the NPD Group, a market research firm.

But while it has shielded fast-food companies from the worst economic effects of the pandemic, the drive-through has become a dangerous place for some low-wage workers, who cook and serve food in cramped conditions, often without access to protective equipment. In a number of states, workers at McDonald’s and other chains have staged walkouts and called for increased safety precautions.

Like other businesses that have remained open, drive-throughs are often tinged with fear. Some customers roll down their windows just far enough to stick out a pair of tongs. Others arrive armed with Lysol spray and plastic wrap.

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“They’re just as scared of us as we are of them,” said Jamila Allen, 23, who works at a Freddy’s in North Carolina. An effort by McDonald’s locations in Los Angeles to lighten the mood of the workers with a calendar of ostensibly morale-boosting events like Crazy Sock Day was widely ridiculed as tone-deaf.

And despite repeated assurances from the major fast-food chains that gloves and face masks are on the way, anxious (and often mask-less) employees working at drive-throughs struggle to maintain social distance, even with fewer workers on each shift.

“It’s impossible to keep six feet apart in the workplace and definitely impossible to stay that far away from customers,” said Terrence Wise, 40, a shift manager at a McDonald’s in Kansas City, Mo. “If you’re taking a customer’s money and they cough or sneeze, you’re on alert and on edge.”

The Fight for $15 campaign, which works with fast-food employees to advocate a higher minimum wage, has identified dozens of McDonald’s workers in at least 14 states who have tested positive for the coronavirus. David Tovar, a McDonald’s spokesman, said the company has taken a range of steps to protect its work force, including putting up barriers and allowing employees to use trays to slide cash and food back and forth. “Customers can lift it off the tray themselves, so there’s no contact between the employee and the customer,” Mr. Tovar said.

Of all its rivals in the fast-food and casual dining business, McDonald’s was arguably in the best position to weather the pandemic. Over the last year, the company has spent hundreds of millions of dollars on its drive-throughs, installing digital menu boards that prod customers to place larger, more expensive orders. At some locations, McDonald’s has experimented with cameras that recognize license-plate numbers, allowing the company to tailor a list of suggested purchases from a customer’s previous orders.

During the pandemic, McDonald’s has made a handful of lower-tech adjustments, simplifying its menu to make lines move faster by cutting all-day breakfast and using only one type of lettuce. “The less choices you have for your crew to make, the more efficient and fast they can be,” Mr. Tovar said.

Credit…Tag Christof for The New York Times
Credit…Tag Christof for The New York Times

Taco Bell has also changed how it runs its drive-throughs. In the past, the company mostly filled relatively small orders. Now, customers are buying much larger meals — enough food to put leftovers in the refrigerator, according to Mike Grams, the chain’s chief operating officer.

“They’re locked up in their house, and so when they come out, and they go to a drive-through, they want to buy more,” Mr. Grams said.

To accommodate those new ordering habits, the company has moved its drive-through workers from the window to the now-vacant dine-in area, opening up space for cooks to assemble larger, more complicated orders in the kitchen.

But not every major chain has been able to come up with pandemic workarounds. Even before the coronavirus, chains like Ruby Tuesday and TGI Fridays, with large dining rooms designed for leisurely meals, had been struggling, closing locations as once-loyal patrons defected to faster, trendier options like Chipotle.

Without drive-throughs, these kinds of dine-in restaurants — many of which have taken on significant debt since the 2008 financial crisis — may struggle.

“We’ll see some large dining chains go under,” said Aaron Allen, a restaurant consultant. “It’ll finally be the death knell for them.”

Over the next year, food critics and industry experts say, the closures of large dine-in chains, mom-and-pop restaurants and fine-dining establishments could transform the restaurant industry, creating a more uniform, less vibrant landscape. The pandemic has exposed the gulf between the haves and have-nots, accelerating the demise of beloved but cash-strapped restaurants as the major fast-food chains continue to bring in revenue. Historically, recessions have benefited chains like McDonald’s and Burger King, which typically see higher sales when people are cutting back on spending.

Still, the pandemic has caused plenty of financial pain even for companies whose drive-throughs are humming. The chief executive of McDonald’s, Chris Kempczinski, has taken a 50 percent pay cut. After reporting a decline in sales on Thursday, Mr. Kempczinski warned that “the exact trajectory of our recovery is highly uncertain.”

And individual franchisees may also struggle, especially in the short term. In April, the National Owners Association — an advocacy group that represents some McDonald’s franchisees — clashed with the company over rent payments and other issues.

Over all, however, the corporate muscle of the big fast-food companies puts franchisees in an enviable position compared to most small businesses, especially independent restaurants. At Burger King and Popeyes, individual store owners have gotten help from corporate “franchisee liquidity teams” in applying for the loans under the government’s small-business relief program.

Credit…Tag Christof for The New York Times
Credit…Tag Christof for The New York Times

After it was criticized by lawmakers and restaurateurs, Shake Shack returned the $10 million loan it had gotten through the program. One reason the chain needed that money in the first place: It does not have any drive-throughs. In the next few years, industry experts say, more dine-in chains like Texas Roadhouse may begin experimenting with the format, given how necessary it has been during the coronavirus shutdown.

Ultimately, the pandemic could provide “a moment of redemption” for drive-throughs, said Adam Chandler, the author of “Drive-Thru Dreams,” a history of fast food.

Since it emerged in the 1950s, the format has faced criticism from public health officials and urban beautification campaigns, prompting cities like Minneapolis to ban the construction of new drive-throughs.

These days, however, the experience of ordering a burger from behind the steering wheel feels more like a reasonable safety precaution than a cold transaction.

And to some, it also feels refreshingly normal.

“It speaks to something that is extremely unremarkable,” Mr. Chandler said. “That you can do that at a time of enormous upheaval is meaningful. It’s poignant in this really chaotic moment.”

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Coronavirus Stimulus Package Spurs a Lobbying Gold Rush

Westlake Legal Group 20dc-virus-lobby1-facebookJumbo Coronavirus Stimulus Package Spurs a Lobbying Gold Rush United States Politics and Government Tax Credits, Deductions and Exemptions Stimulus (Economic) Lobbying and Lobbyists Layoffs and Job Reductions Hotels and Travel Lodgings Franchises Coronavirus (2019-nCoV)

WASHINGTON — Restaurants say they need $325 billion in federal assistance. Boeing wants $60 billion. The travel industry has requested $250 billion and manufacturers are seeking $1.4 trillion in loans to deal with the economic devastation being wrought by the coronavirus.

And that’s to say nothing of the casinos, airlines and franchise owners, all of whom have signaled that they, too, will need relief from the federal government to survive.

Then there are the industries and companies that do not immediately come to mind as front-line casualties but are nonetheless lobbying for their causes to be addressed as Congress prepares to allocate $1 trillion or more in response to the crisis.

The prospect of a bailout of a scale without precedent has set off a rush to the fiscal trough, with businesses enduring undeniable dislocation jostling with more opportunistic interests to ensure they get a share.

The sportswear company Adidas is seeking support for a long-sought provision allowing people to use pretax money to pay for gym memberships and fitness equipment — despite the mandatory closure of fitness facilities in many jurisdictions during the outbreak.

Drone makers are urging the Trump administration to grant waivers they have been seeking that would allow them to be used more widely — including to deliver medical supplies or food without risking human contact that could spread the virus.

Movers are requesting $187 million in assistance to make up for revenue lost as a result of a Defense Department order halting moves, while Airbnb is asking Congress to give tax breaks and access to small business loans to people who lost income from a decline in home rentals.

Then there are the pig farmers. They are citing coronavirus in renewing their call for the federal government to expedite foreign worker visas, with an executive at the National Pork Producers Council noting in an email “many Americans have experienced empty meat cases in recent days, as we adapt to the surge in demand.”

While the halls of the Capitol are eerily quiet, lobbyists are burning up the phone lines and flooding email inboxes trying to capitalize on the stimulus bills moving quickly through Congress. President Trump has already signed into law a coronavirus relief package including funds to provide sick leave, unemployment benefits, free coronavirus testing and food and medical aid to people affected by the pandemic.

Negotiations over a new bill, which had been estimated to cost $1 trillion, kicked off in earnest on Thursday night. Senate Republicans unveiled legislation that included $58 billion in loans and loan guarantees for passenger airlines and cargo carriers, $150 billion for unspecified “eligible businesses” and $300 billion for small business loans, as well as direct cash payments to many Americans. Democrats in the House and Senate will have their own proposals.

The conditions for a lobbying blitz are ideal. Concerns about costs and deficit spending largely have been moved to the back burner. The process is being rushed, with legislation being written in private and rushed toward votes without much scrutiny of the fine print. Both parties are under intense pressure to deliver for key constituencies.

“The only industry that hasn’t been slowed down by the virus is the lobbying industry,” said Representative Ro Khanna, Democrat of California.


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In an interview, Mr. Khanna said lobbyists have been “inundating people on the Hill with emails, calls and texts.”

“It really provides a lens into the part of Washington that most Americans despise,” he continued, “particularly at this time of national crisis.”

Some congressional aides have privately likened the lobbying blitz around the stimulus legislation to a gold rush.

Americans For Prosperity, the conservative group funded by the Koch brothers’ political network, warned lawmakers on Thursday to “not exploit this crisis to push their own special interests’ policy agendas” or “to bail out shareholders or to reward favored industries.”

Craig Holman, a lobbyist for the liberal-leaning government watchdog group Public Citizen, argued that many of the industries to which the Trump administration has expressed a willingness to extend assistance — including the airlines, cruise lines and hotels — do not need or deserve the help.

“These industries already have access to cash reserves from their wealthy investors,” Mr. Holman said, arguing that large corporations “have a very poor track-record when it comes to spending bailout funds, using much of the money to preserve profits for shareholders, stock buybacks and hanging on to reserves.”

His group is backing Democratic proposals to enact conditions on bailout funds for major corporations, similar to those supported by Mr. Khanna, including prohibiting their use for executive compensation and stock buybacks.

Lobbyists and trade groups recognize the possibility of a backlash, “but it doesn’t seem to have stopped the frenzy,” said Dave Oxner, a lobbyist with the firm Cogent Strategies who is assisting clients navigating the coronavirus crisis.

Mr. Oxner helped write the 2008 bailout legislation as a top staff member for the House Financial Services Committee, then became a lobbyist for a trade group representing the finance industry as it struggled to deal with the criticism and loss of public trust that lingered after the bailouts.

“So for those looking for relief amid current crisis conditions, it is important to remember that words like ‘temporary,’ ‘targeted,’ ‘need-based’ and ‘forbearance’ can very quickly turn into a ‘bailout’ in the mind of those Americans who don’t perceive a direct benefit,” he wrote in a blog post this week warning lobbyists and industry groups to proceed cautiously.

He noted in the post that “some of the requests for aid appear opportunistic on their face, while others seem truly desperate.”

And, in an interview, he predicted “years from now, there could be a reckoning.”

Some lobbyists are proceeding, even as they acknowledge the risks.

“I don’t want to sound tone deaf,” an Adidas lobbyist wrote in an email on Thursday to congressional staff seeking support for the fitness tax break, which has been pushed for years by a bipartisan group of lawmakers including Senator John Thune, Republican of South Dakota, and which could benefit Adidas and its subsidiary Reebok.

The lobbyist, Ray Bucheger, a partner at FBB Federal Relations, added that he was nonetheless “being told that Senator Thune is looking to include this in an emergency stimulus bill. I am emailing to 1) reinforce Reebok/adidas support; and 2) to ask: have you heard from anyone else on this?”

Congressional analysts have previously estimated the proposed tax break would cost the government about $3.5 billion in lost tax revenue over 10 years.

Gregory S. Walden, an official with the drone industry trade association, the Small UAV Coalition, did not entirely dismiss the idea that his group was being opportunistic in calling on the Trump administration to waive the regulations it opposes. The change, he said, would assist with the response to the coronavirus outbreak.

“If you’re opportunistic in helping people, that’s the right kind of opportunism,” said Mr. Walden, a former chief counsel of the Federal Aviation Administration.

But Sean Kennedy, an executive at the National Restaurant Association, said the flurry of lobbying in recent weeks has complicated the efforts of groups like his seeking Washington’s support to prop up struggling industries. Many restaurant owners, facing lengthy closures, are laying off their staffs and are fearful of their survival if the crisis goes on for an extended period.

“The challenge for us is that there are people who are using this crisis as a way to revisit past legislative battles that have nothing to do with coronavirus or the people suffering from it,” Mr. Kennedy said. “It’s offensive to the American people.”

He said more than 40 state governments have ordered restaurants to be closed or drastically limited in service, which could lead to the elimination of 5 to 7 million jobs over the next three months. The $325 billion in assistance his group is seeking includes $145 billion to help cover operations and pay employees.

“Our goal is not to profit — our goal is simply to survive,” Mr. Kennedy said, dismissing the potential of an anti-bailout backlash.

Likewise, Matt Haller, an executive at the International Franchise Association, which represents franchise businesses, said “there will always be backlash, but we hope that most people will agree about the need to keep businesses afloat and workers on the payroll.”

His association is asking Washington for $300 billion in loans and other assistance.

“We are literally talking about hundreds of thousands of small franchise businesses — from gyms to day care centers to restaurants and hotels — all without customers, who need capital now in order to protect the greater public health,” Mr. Haller said.

There is a key distinction between most of the industries seeking help from Washington now and the banks that received bailouts during the 2008 financial crisis, said Tori Emerson Barnes, an executive at the U.S. Travel Association.

“This is an unforeseeable natural disaster, national disaster,” she said. “We’re not talking about people that have been acting badly.”

As such, she suggested she does not believe it is warranted for the federal government to demand seats on the boards of most large companies that might receive assistance in the stimulus measures being debated in Washington.

Her group is requesting $250 billion in assistance for its member hotels, museums, tour companies and other travel entities.

“I don’t know at the end of the day if it will be enough,” she said. “People can’t shy away from, or be afraid of, a big number, because the entire economy is halted, so we need to do something to stabilize, and to keep things moving until we can physically move again.”

Kenneth P. Vogel and Catie Edmondson reported from Washington, and Jesse Drucker from New York. David McCabe contributed reporting from Washington.

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Labor Dept. Rule to Curb Lawsuits by Franchise Workers

Westlake Legal Group defaultPromoCrop Labor Dept. Rule to Curb Lawsuits by Franchise Workers Trump, Donald J Regulation and Deregulation of Industry McDonald's Corporation Labor Department (US) Labor and Jobs Franchises Fast Food Industry Corporations

Workers could have more difficulty suing large companies for wrongdoing by contractors or franchisees under a rule announced on Sunday by the Labor Department.

Under the rule, which will take effect in March, employees of a fast-food franchise like a McDonald’s restaurant, for example, may struggle to win a legal claim against the parent company if a franchisee violates minimum-wage and overtime laws.

“This final rule furthers President Trump’s successful, governmentwide effort to address regulations that hinder the American economy and to promote economic growth,” Secretary of Labor Eugene Scalia said in a statement.

The rule, which the department proposed last April, fleshes out its position on a concept known as joint employment. It effectively replaces a more labor-friendly Obama-era approach that the Trump administration withdrew in 2017, one of several departures from the previous administration in the area of employment and labor law.

After the rule takes effect, it could limit the ability of millions of workers to recover wages they are owed.

The contractors and franchisees that directly employ workers often have limited resources to pay legal penalties and settlements, making the large upstream companies with whom these employers have a relationship a more practical target.

“This resolution provides much-needed clarity for the 733,000 franchise establishments across America,” said Robert Cresanti, the president and chief executive of the International Franchise Association, an industry group.

Advocates for worker have criticized the rule, arguing that it provides a road map of sorts for employers seeking to avoid liability for harmful practices.

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How 7-Eleven Struck Back Against an Owner Who Took a Day Off

Westlake Legal Group 06seveneleven-1-facebookJumbo How 7-Eleven Struck Back Against an Owner Who Took a Day Off Population Part-Time Employment Matsumoto, Mitoshi Labor and Jobs Japan Franchises Convenience Stores 7-eleven

HIGASHI-OSAKA, Japan — The rice balls are gone. So are the juice bottles, which Mitoshi Matsumoto priced to sell early. Most of his store’s shelves stand empty, but he has kept some cigarette cartons and bottles of alcohol in the hope that his long-running battle with the 7-Eleven convenience store chain will end in his favor.

The company that controls the 7-Eleven chain, Seven & I Holdings, terminated Mr. Matsumoto’s franchise last week after he decided to close his store on New Year’s Day, and it has stopped supplying him.

It was the latest battle between Mr. Matsumoto and one of Japan’s best-known companies over harsh working conditions in the Japanese convenience store industry, which demands that stores stay open seven days a week, 24 hours a day, for all 365 days in a year.

Mr. Matsumoto remains in business, but just barely. The screen on the A.T.M. flashes, “Not in operation.” His two full-time employees are ready to jump to new jobs once he finally closes, and his seven part-time employees no longer show up.

Still, he plans to stay open as long as he can.

“I want to stay in business for the sake of myself and other owners throughout the country,” said Mr. Matsumoto, 57, who says he plans to continue his fight in a local court.

A spokesman for Seven & I, Katsuhiko Shimizu, said the company terminated Mr. Matsumoto’s contract last Tuesday. He denied that the termination was tied to Mr. Matsumoto’s plan to close for a day, and instead cited numerous customer complaints about the store and Mr. Matsumoto’s disparaging remarks about the company on social media.

Mr. Matsumoto’s fight with 7-Eleven has made him famous in Japan, a country that has long struggled with a strenuous and sometimes deadly work culture.

Government figures show overwork was blamed for 246 claims related to hospitalization or death in 2018. The retail industry was one of the biggest sources, officials show. Another 568 workers took their own lives over job-related exhaustion. The phenomenon is so common that Japan has coined a term for it, “karoshi.”

Overwork has become an even bigger issue as the Japanese population ages and shrinks. Though the country’s economic growth has been weak for years, the labor market has tightened considerably as more workers slip into retirement and fewer young workers take their place. While Japan is rethinking its tough immigration laws, the rules still generally keep people from moving to the country to fill in the gap.

Those strains are particularly evident in the convenience store industry. Japan’s chains have greatly expanded in recent years in an effort to capture market share at one another’s expense.

While the expenses for the chains were minimal, the expansion took a toll on the franchisees who operate the vast majority of Japan’s more than 55,000 convenience stores. Unable to find dependable workers, many owners increasingly worked themselves.

“Under the current situation, the company can have it both ways,” said Naoki Tsuchiya, a professor at Musashi University in Tokyo and an expert on labor issues in the industry, who called Mr. Matsumoto “a significant figure” in the nationwide discussion over convenience stores. “They don’t have to take risks, but the owners have to take them.”

Mr. Matsumoto first drew attention a year ago. Under pressure to find workers and unable to take a day off himself, he decided to close his store before midnight. When 7-Eleven threatened his business, he contacted local reporters.

“In the last seven years, I managed to take only three trips with my wife,” he said over the weekend. “Even back then, I was preoccupied with store operations, worrying about sudden cancellation by part-time workers. I had to hold a mobile phone while I soaked in a spa.”

The clash drew renewed attention last month when Mr. Matsumoto declared his intention to close his store on New Year’s Day, Japan’s most important holiday. Days later, 7-Eleven threatened to close his store.

When Mr. Matsumoto reopened on Jan. 2, the threat appeared to have been carried out. The company’s vast and super-efficient logistics system had stopped sending fresh supplies. The sales terminal where employees ring up goods is still online, but little else appears to be connected to the 7-Eleven apparatus that runs nearly 40 percent of Japan’s convenience stores.

Mr. Matsumoto says he still has business. Supportive customers have shown up to shop among his remaining inventory, which includes snacks, instant noodles, stationery items, detergents and cosmetics.

One of them, Hiroshi Nakayama, a 45-year-old electrical equipment wholesaler, had long watched the fight between Mr. Matsumoto and 7-Eleven and went to the store after his son’s soccer game to check in. The whole fight could have been avoided, he said.

“There must have been other solutions to fix the bad relationship with the company,” said Mr. Nakayama, who turned up on Saturday after Mr. Matsumoto, running on a skeleton staff, had closed for the night. “They could have discussed it more. It’s both sides’ fault.”

Mr. Matsumoto said another store owner, from the city of Kyoto, had come to visit to express support, but he declined to provide a name.

Despite his troubles with the company, Mr. Matsumoto said he hoped a legal fight would restore his franchise. He said that 7-Eleven had offered to pay for his remaining inventory — owners are responsible for buying their own products from the company at wholesale prices — but that he had refused. He wants Japan’s convenience store industry to change instead.

“If I win the case, I hope more will follow and raise their voices,” he said. “If I lose, many will get depressed and more afraid of 7-Eleven.”

That is why, he said, he plans to fight to the bitter end.

“It doesn’t matter if I win or lose,” Mr. Matsumoto said. “I just want to disclose everything in my case. I believe the justice will be given.”

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A 7-Eleven in Japan Might Close for a Day. Yes, That’s a Big Deal.

Westlake Legal Group 00SevenElevenJapan-1-facebookJumbo A 7-Eleven in Japan Might Close for a Day. Yes, That’s a Big Deal. Working Hours Population new year Mitoshi Matsumoto Labor and Jobs Japan Holidays and Special Occasions Franchises Convenience Stores 7-eleven

HIGASHI-OSAKA, Japan — Mitoshi Matsumoto, the most famous 7-Eleven convenience store owner in Japan, wants to do something unthinkable in his 24-hour, 7-day-a-week industry: Take a day off.

That’s why, he says, 7-Eleven is trying to put him out of business.

Mr. Matsumoto announced in November his plans to close up shop so he and his two full-time employees could take off New Year’s Day, Japan’s most important holiday, after years of working 14-hour days with few breaks. But on Dec. 20, 7-Eleven’s parent company told him that his store had received more customer complaints than any other in Japan. He had 10 days to address the issues, it said, or the location would be closed.

“They don’t want to let me take New Year’s off. That’s all there is to it,” said Mr. Matsumoto, 57, who has made a name for himself in Japan by publicly defying the company’s demands that franchisees stay open 24 hours. “If they allow me to do this, others will start rising up here and there.”

His decision in February to shorten store hours inspired other franchisees to demand that 7-Eleven allow them to do the same. But the company has been slow to change, he said, so he decided to take New Year’s off in protest.

The standoff has supercharged a national debate over the business practices of the country’s 24-hour convenience store industry. Japan’s declining population has made workers harder to find. Tales of punishing work schedules have struck a chord in a country that holds a sometimes lethal corporate devotion to working long hours.

Last year, the labor ministry approved 246 claims related to hospitalization or death from overwork, according to government statistics, which show the retail industry as one of the biggest sources of complaints. Another 568 workers took their own lives over job-related exhaustion.

But even as convenience store owners are suffering under increasingly long hours, the country’s three biggest convenience store chains — 7-Eleven, Lawson and FamilyMart — have been reluctant to change the 24-hour schedule that Japanese shoppers have come to expect.

In a letter to Mr. Matsumoto, 7-Eleven said it received 78 complaints about his store this year. In a statement, it said that the threat to sever the contract was based on the complaints and on the “destruction of the relationship of trust” caused by his criticisms on social media of 7-Eleven’s management.

Mr. Matsumoto and his supporters say 7-Eleven is trying to make an example of the man who has become the face of the resistance against a company that they say exploits their labor.

“Owners can’t organize, because the second you try, they home in on you and apply pressure,” said Reiji Kamakura, the leader of the Convenience Store Union, a small group that has struggled to gain members and change industry practices in the face of corporate opposition.

Though it got its start in Texas in the 1920s, 7-Eleven has been controlled by a Japanese company since 1991. Today, it operates nearly 40 percent of Japan’s more than 55,000 convenience stores.

That makes 7-Eleven an integral part of Japanese life. The government considers convenience stores part of the country’s infrastructure, like highways and sewers. They are expected to help promote regional tourism and to help with local policing by offering a safe place for people to flee to. Its stores can be called on to help distribute aid and supplies during a natural disaster.

The vast majority of Japanese 7-Elevens are owned by individuals like Mr. Matsumoto. The company provides them with a storefront and access to a logistics network that keeps its shelves full of rice balls, cigarettes and boxed lunches. It sets operating procedures with an eye toward protecting the brand and providing a uniform customer experience.

Among those demands, it tells franchisees to keep their stores open 24 hours a day, seven days a week, 365 days a year.

The model, pioneered by 7-Eleven, worked well enough for years. But about a decade ago, it began to break down.

Hungry for growth, 7-Eleven and its competitors began a war of attrition, flooding the country with more locations in an attempt to steal market share. Each new shop cut into its neighbors’ profits.

At the same time, Japan’s labor pool was shrinking, driving up hourly wages and making it difficult to find reliable workers. Many franchisees — who are responsible for paying their staff’s wages — were forced to work more of their own shifts.

For 7-Eleven, the cost of opening new stores was minimal. But for many franchisees, the numbers no longer added up.

Mr. Matsumoto, a former carpenter, opened his store in 2012, hoping to earn a more stable income. From the beginning, he said, he locked horns with the corporate management, refusing to follow suggestions from his regional manager about how much food to order or what items to stock.

In May 2018, his wife, who had also worked at the store, died. He began having trouble finding reliable staff. In desperation, he asked his son to come home from college to help.

Even so, Mr. Matsumoto was working 12-hour shifts. And sometimes much more.

Then, one day in February, he told 7-Eleven he was going to shorten his store’s hours from 6 a.m. to 1 a.m.

The company said that would violate his contract. He would lose his store and the tens of thousands of dollars he had invested in it. On top of that, he was told, he would have to pay the company a penalty of about $155,000 for breach of contract.

Mr. Matsumoto did it anyway. When the company threatened to close his store, he went to the news media.

Activists had tried to draw national attention to the plight of convenience store owners for years. But something about Mr. Matsumoto’s story touched a nerve. Japanese reporters descended on the store. Letters of support and phone calls poured in from convenience store owners around the country, he said.

Mr. Matsumoto admits he has received his fair share of customer complaints. He has sparred with people who he says left their cars for too long in the store’s small parking lot. He closed the bathroom to the public — a move virtually unheard-of in service-friendly Japan — because customers were not keeping it clean and sometimes locked themselves inside for hours. But in the past, he said, 7-Eleven’s regional staff worked with him to resolve the issues.

That wasn’t the case this time, he said. When he asked to see the complaints against him, he said, the company showed him only a few, saying there were too many to give him a complete accounting.

In its statement, 7-Eleven said that it had “repeatedly explained to the owner the actions that were in violation of his contract,” adding that he had yet to take action to correct them.

He suspects his activism played a part in the complaints. After his story went viral, people began to attack him on Twitter, accusing him of smearing the company’s image. His store has 270 reviews on Google Maps, many attacking his character. Virtually all of them were written after he appeared in the news.

Speaking privately, some 7-Eleven owners and employees say they admire Mr. Matsumoto, but few are willing to put their own shops on the line.

Nevertheless, the public outcry has given them some hope that the industry will change. Major chains have pledged to introduce some reforms. 7-Eleven has said it will experiment with allowing a few shops to reduce their hours. It pledged to give this New Year’s Day off to employees at 50 locations it operates directly.

Mr. Matsumoto hopes that franchised stores will close, too, in an expression of solidarity.

He met with representatives from the company on Sunday, but the two sides were not able to come to a satisfactory agreement, he said. Mr. Matsumoto said that if 7-Eleven went through with its threat, he planned to go to court.

The current system cannot survive much longer, he said, but 7-Eleven will not change unless the owners force it to. So far, no one has come forward.

“If we don’t take a stand now,” he said, “there’s no future.”

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Subway Got Too Big. Franchisees Paid a Price.

Manoj Tripathi couldn’t shake the feeling that someone had a vendetta against his Subway sandwich shop. A franchisee for nearly two decades, he had done everything he could to keep his restaurant, in a strip mall in Northern California, in perfect condition. But lately it seemed like someone was out to get him.

It was the middle of 2017, and inspectors sent by Subway’s regional manager were finding a new problem to cite each month: a handprint on the glass door, the wrong brand of bathroom soap, cucumber slices that were too thick, he said. They seemed to be little things, but with each write-up, Mr. Tripathi’s grip on his store weakened. If he racked up enough infractions, Subway could terminate his contract and take control of the business.

When an inspector named Rebecca Husler arrived one day that September, Mr. Tripathi thought his restaurant was pristine. Then he noticed that a single light fixture needed a new bulb. Mr. Tripathi rushed out to buy a replacement, but by the time he returned, Ms. Husler had marked it as a violation. A year later, just as he feared, he lost the Subway.

Mr. Tripathi wasn’t paranoid. Ms. Husler really was out to get him. She had specific instructions from her boss, the regional Subway supervisor, to find fault with the store, she said in an interview.

“I was kind of his hit man,” she said, sipping an iced tea at a Starbucks in the Bay Area. Ms. Husler worked for the regional supervisor for nearly a year, she said, and she has come to regret the role she played in pushing a group of store owners out of their investments. The light-bulb moment with Mr. Tripathi, especially, gave her pause. “We’re ruining these people,” she said.

Subway is the largest fast-food company in the world by store count, with more than 24,000 restaurants in the United States alone. It got that way thanks in large part to entrepreneurial immigrants. Unlike at chains such as McDonald’s and Burger King, where many franchises are operated by investment firms, Subway owners are mostly individuals and families. The company’s co-founder, Fred DeLuca, made stores easy to open; most new franchisees are charged a $15,000 initial fee, compared to $45,000 at McDonald’s. In exchange, Subway operators must hand over more revenue than at many other chains — 8 percent of gross sales — while also agreeing to other fees and stipulations.

For half a century, the system worked to mutual advantage. Subway’s value hit $12.3 billion, and countless first-generation Americans bootstrapped their way to success, one foot-long at a time.

By the time Mr. DeLuca died in 2015, though, the company was struggling. Rivals like Jimmy John’s and Quiznos had grown, and Subway’s spokesman, Jared Fogle, pleaded guilty to child sex and pornography charges. Mr. DeLuca’s sister, Suzanne Greco, took over as chief executive, inheriting a company that many felt had grown too fast and haphazardly. In 2016, for the first time ever, more Subway stores closed than opened. But while many franchisees shut down because of underperformance, others operating profitable locations began to feel targeted, too.

For many owners, Subway’s internal workings are a mystery. The chain, which is private, offers far less financial information than other global fast-food peers. In the most recent version of a disclosure document given to prospective franchisees, which is more than 600 pages long, the company notes that it can revise its rules “at any time during the term of your Franchise Agreement under any condition and to any extent.”

The document would be difficult for anyone to process. But Alexander Dembski, who trained many new Subway owners over a 34-year career, estimated to Fortune in 1998 that 30 to 50 percent of the chain’s franchisees were immigrants, and that more than a third of applicants scored poorly on proficiency tests in math and English.

ImageWestlake Legal Group 28SUBWAY-02sub-articleLarge Subway Got Too Big. Franchisees Paid a Price. Subway Restaurants San Francisco Bay Area (Calif) restaurants RENO, Nev. Lake Tahoe (Nev) Franchises Fogle, Jared Federal Trade Commission Fast Food Industry DeLuca, Frederick (1947-2015) Connecticut California

Manoj and Sadhana Tripathi at one of their Subway restaurants, in Orinda, Calif. They once owned nearly 40 stores; now they have 10.CreditJim Wilson/The New York Times

Before his death, Mr. DeLuca was accused of using bullying tactics that left many operators struggling to recoup their investments, leading to lawsuits, regulatory run-ins, government investigations and constant complaints from franchisees. One of the most persistent areas of protest has involved a class of Subway managers known as development agents.

Subway parcels its vast network of stores into more than 100 regional fiefs. Each is overseen by a development agent, who recruits new franchisees, approves buyers for existing stores and sends inspectors — known as field consultants — to conduct monthly reviews. But usually, development agents are also franchisees themselves. When that is the case, they are both in charge of and competing with other store operators, and their own locations are inspected by people they hire.

These feel like conflicts of interest to many Subway owners — giving development agents the means and motivation to shut down competing stores and take over profitable ones by manipulating inspections. Many franchisees who have lost their restaurants say that they have recouped little of their original investments. Intervention from Subway’s headquarters in Connecticut is rare.

Don Fertman, Subway’s chief development officer and a veteran of the company for 38 years, said that owning restaurants helps give development agents “a better understanding of all aspects of owning a small business.” He said the company reviews the agents’ work and expects them to uphold ethical standards, dealing with violations “on a case-by-case basis.”

Across the country, franchisees have lodged complaints and filed lawsuits. In West Virginia, Bhrugesh and Utpala Vyas ran three stores, two of them top performers in the territory, they said. In a 2017 filing in federal court in Connecticut, Ms. Vyas accused the local development agent, the man’s son and an inspector of conspiring to take over the stores by concocting “unreasonably harsh evaluations.”

A judge ruled against Ms. Vyas. Records from local health departments and Subway show that at least two of the stores are now co-owned by the inspector and the development agent. “I feel very bad, and my blood is boiling,” Mr. Vyas said in an interview. “This was our hard-earned money.”

Mr. Fertman said that complaints like those Mr. Vyas filed are “unfounded,” and that Subway “makes every effort” to help noncompliant franchisees improve. He added that the company is “in the business of selling sandwiches — not closing restaurants, not marking people out of compliance.”

“Our business development agents are well-respected members of our business community,” he said. “And when we hear these allegations, I would say that they are false.” He said he was not aware of any exceptions.

For years, the Subway system’s opacity and aggressive pace of development — Mr. DeLuca once dreamed of opening 50,000 stores by 2017 — went hand in hand. The company encouraged stores to open within blocks of existing locations, with development agents often giving the established franchisees a choice: Operate the new restaurant themselves, or compete with someone recruited by Subway. Franchisees, feeling pressured, sometimes took the first option.

“It was assumed that the stores would, eventually, become sustainable,” Mr. Tripathi said. An immigrant from India, he bought into Subway’s expansion in a major way. After two decades spent at companies like Jamba Juice and the Body Shop, opening Subway franchises was his chance to take charge. At one point, he owned 38 stores, and by 2015 he was among the largest franchisees in California’s East Bay region.

Rebecca Husler, a former inspector for Subway, said her boss ordered her to find violations at stores. “I was kind of his hit man,” she said.CreditNathan Weyland for The New York Times

That was when Ms. Greco took over Subway, and the company’s store count began to shrink. In the East Bay, Mr. Tripathi was under the jurisdiction of a development agent named Chirayu Patel, known as Akki. He oversaw a huge, choice territory that included most of Northern California and western Nevada. Mr. Patel also owned dozens of Subway stores.

In 2016, he convened a franchisee meeting in a Sacramento warehouse. He told everyone that Subway wanted to improve its strongest restaurants and shut down the weaker ones, according to Nikku Aulakh, a franchisee who was present.

She left the gathering alarmed. She and many fellow franchisees had been pushed for years to invest huge sums in new stores that were now struggling. Subway’s franchise contract forbids the company from unilaterally closing stores just because sales are weak. But franchisees can lose control of their restaurants for failing to meet Subway’s operating standards — violations cited by inspectors employed by development agents like Mr. Patel.

Ms. Aulakh said Mr. Patel eventually pressured her into closing or selling her four stores in Sacramento, after they received a slew of bad evaluations. “I would have liked to stay in business for another 10 to 15 years,” she said. “I wanted to make more money, but I had no other choice.”

Vishal Sharma, a franchisee in Nevada who owned three stores, described another meeting that Mr. Patel convened in Reno the same year. In front of some 20 store operators, Mr. Patel said that he had “the money to buy the best lawyers,” Mr. Sharma recalled. “At the time, we weren’t scared. We thought that maybe that was just his style. Then we figure out that this guy’s template is not developing the territory, it’s taking away the territory.” (Mr. Patel said in an email that he had been informing the franchisees that Subway’s lawyers were available to answer legal questions.)

At one point, a franchisee sent Mr. Patel an anonymous complaint; he responded with an email to a large group of them, which was reviewed by The Times. He threatened a lawsuit that “would be so huge it would nearly take all of your life earnings in Subway in fighting this suit. Please don’t test me especially when you don’t have any basis.”

Subway terminated Mr. Sharma’s contracts in 2017. Last December, in state court, he accused Mr. Patel of using “rigged compliances” and Subway of employing an “usual structure where the local agent is a supervisor, as well as a competitor.” The case was ordered into arbitration in Connecticut, but Mr. Sharma is appealing the decision.

Ms. Husler, the inspector who called herself Mr. Patel’s “hit man,” said that Mr. Patel considered his own interests when determining what stores would be sent to arbitration, and likely closed. When it came time to conduct inspections, she said, Mr. Patel made it “very clear that his stores were to pass” and that “the people he wanted out of the system were to fail out of the system.”

The Times reviewed text messages about individual franchisees in which Mr. Patel assigned evaluations to certain inspectors “so we can get this guy out of the system.” But when it came to his own stores, there was a different standard, according to Effie Lennox, a former inspector who worked for Mr. Patel in Northern California from 2007 to 2010. She said that he asked her not to report violations at his locations and to email him about them instead.

“That was the problem: He was a franchisee and a development agent,” she said. “And especially with someone like him, having that conflict of interest is the worst-case scenario for the franchisee, because he’s in it for his own benefit, not for theirs.”

A disclosure document that Subway gives to potential franchisees is more than 600 pages long.CreditSonny Figueroa/The New York Times

Ms. Lennox said that she often went behind Mr. Patel’s back to warn franchisees that they were being targeted. “These are people’s livelihoods,” she said. “I felt like I needed to undo the damage that he was doing to these poor people.”

In an email to The Times, Mr. Patel said that he had acted appropriately at all times, and that his goal is for all of the stores in his territory to be successful. He said that evaluations at stores owned by Mr. Tripathi, Ms. Aulakh and Mr. Sharma were “conducted in a manner consistent with evaluations of other Subway restaurants.” There were problems with sales at Mr. Tripathi’s stores and food safety at Mr. Sharma’s locations, he said. Mr. Patel added that he and his team “have no intention of deliberately falsifying” evaluations and would never train inspectors to do so, and that noncompliant restaurant owners are given the chance to correct violations.

Dozens of franchisees in the region decided to appeal to Ms. Greco for help. Mr. Tripathi was one of them. “There is a deep sense of morass within the franchisee community,” the group wrote in a 2016 letter. Soon after, they wrote again, asking that Ms. Greco “designate somebody impartial to look into the matter.” The franchisees said that they suspected Subway’s development agents of commissioning “unfair/biased/questionable evaluations” and forcing franchisees out “at a throwaway price.” They feared retaliation. “Needless to say, time is of the essence,” they wrote.

Ms. Greco did not respond, they said. (Subway said it always has “open lines for franchisees through multiple channels of communication.”) But Mr. Patel heard about the letter and was enraged, Ms. Husler said. He wanted all of the franchisees involved ejected from his region, she said. Ms. Husler recalled Mr. Patel instructing her: “Go in there and just throw your probe right into that food. It’s not going to make temperature, and you can mark them out of compliance.”

“He actually gave us specifics on what he wanted us to do,” Ms. Husler added — such as directing her to visit during shifts with inexperienced employees who were more likely to make mistakes.

Not all of the franchisees who have left the Subway system operated their stores perfectly, and many ran afoul of local health inspectors in addition to the company’s evaluators. But dozens of franchisees contend that issues that never bothered Subway during its rapid expansion suddenly put them out of business in recent years.

Those franchisees feel that they have little recourse. Near Sacramento, Minal Khatri and her husband owned a Subway in a prime location, just off the freeway. After Mr. Patel’s inspector repeatedly marked it out of compliance around 2014, she recalled, she and her husband started to fight constantly: Why were they failing? Why couldn’t he get everything into compliance? Ms. Khatri said they both repeatedly asked Subway headquarters for advice, but never got a response. Eventually, the company took her into arbitration, and she said she was told to find a buyer for her store or risk forcible closing.

Mr. Patel rejected all of the candidates she found, she said; records indicate that he now owns her restaurant. Ms. Khatri and her husband divorced. It was only after it became clear that Mr. Patel wanted to buy her store, she said, that she realized her husband might not have been to blame for everything after all. Mr. Patel said the Khatris asked him to buy the restaurant.

Another franchisee, Kanwardeep Virk, said that starting in 2006, he operated four stores in the Lake Tahoe area that were profitable and compliant with Subway’s standards — his “babies,” he called them. Suddenly, at the beginning of 2016, he said, he started failing evaluations. He said one inspector sabotaged a meatball storage bag, by puncturing it with a thermometer and then waiting to record its temperature.

Subway started arbitration proceedings against Mr. Virk. Such cases are typically heard near Subway’s headquarters in Connecticut. Many store owners cannot afford to travel to defend their stores in person, and argue their cases by phone or by filing documents.

Subway is the largest fast-food company in the world by store count, with more than 24,000 locations in the United States alone. But since 2015, it has cut the number of stores by more than 2,000.CreditRainer Behrens for The New York Times

In 2018, Subway initiated the equivalent of 29 litigation actions (mostly arbitrations) per 1,000 franchisees, compared to 1.4 actions for McDonald’s, Dunkin’ Donuts, Pizza Hut, Burger King and Wendy’s combined, according to an analysis of the companies’ disclosure documents by John Gordon, a restaurant industry expert at Pacific Management Consulting Group.

Eventually, Mr. Virk gave up. Mr. Patel now owns two of his former stores. In his emailed statement, Mr. Patel wrote that the restaurants had problems with food safety and labor practices and owed back rent, and that Mr. Virk himself arranged to close or transfer them.

The Federal Trade Commission requires Subway to produce an annual list of franchisees with permanently closed stores, which the company said “allows prospective franchise owners the opportunity to contact them to discuss their experience with Subway.” But many franchisees who received termination letters after being deemed noncompliant eventually sold their stores — sometimes under duress and often for far less than they believed the stores were worth, several franchisees said. Those locations are recorded as transfers.

Franchisees say that this classification allows Subway and other franchisers to mislead potential store owners. But government oversight is limited. The F.T.C.’s compliance guide for franchisers has not been updated in more than a decade. Lois Greisman, the associate director of the Division of Marketing Practices, said that the agency had not focused on franchise misconduct or taken any franchise-related enforcement action in years.

Subway is in the midst of an ambitious makeover campaign, hiring a firm that has worked with Tiffany & Company and Saks Fifth Avenue, adding to its menu and stocking remodeled stores with new technology.

Since Mr. DeLuca’s death, the company has been on shaky footing. It was slower than many rivals to launch a digital loyalty program and mobile ordering options. Revenue fell to $10.4 billion last year, down 9.5 percent from 2015, according to the market research firm Technomic. In recent months, the chain has added a new chief information officer, a chief marketing officer and a North American vice president. Ms. Greco retired last year.

Subway’s store count has shrunk by more than 2,000 since 2015. “We have to look at each and every location and optimize our footprint accordingly,” said Mr. Fertman, Subway’s chief development officer. “We have to make sure, ultimately, that we have the right restaurants in the right locations.” Other executives have called it an “optimization” effort.

Senator Catherine Cortez Masto, a Democrat from Nevada, wrote in a letter in May to the Small Business Administration that franchisees had accused Subway of “using minor infractions to steal the stores from owners through a rigged arbitration system,” citing reporting by The New York Post. “I am troubled by increasing complaints from entrepreneurs about unfair practices that are causing them financial difficulties,” she wrote. The agency said in its reply that, out of 1,551 federally backed loans approved for Subway franchisees in the past decade, 12 percent were charged off, or deemed unlikely to be repaid — a far higher rate than the average franchise loan.

Subway, in an email, said that the franchisees who alleged misconduct were “anomalies,” and that its surveys and “listening tours” found that 80 percent of franchisees in the system want to keep working with the company.

On the day after Memorial Day, Mr. Tripathi and his wife, Sadhana, stopped by one of the 10 Subways they still own, in an outdoor shopping mall in Orinda, Calif. The cashier at the restaurant cracked jokes with customers. Fans spun overhead. Every light bulb shone.

The Tripathis said they fear they could lose yet more of their stores. They sued Subway and Mr. Patel in 2016 in California court, accusing the development agent of “using a variety of techniques including trumped-up and false inspection reports to justify terminating certain franchises.” Subway invoked the clause in the franchisee contract that requires disputes to be resolved in private arbitration in Connecticut. The Tripathis have filed an appeal for the case to proceed in California.

Mr. Tripathi, a trained engineer with a business degree, and Ms. Tripathi, who holds a doctorate in chemistry, said they were mostly able to read and understand the reams of legal documents produced by the conflict. Many of their fellow franchisees cannot, they said. “The reason we were fighting them is that we can,” he said.

But he and his wife are getting tired of the Subway system. “We worked so hard, we gave up our own careers,” Ms. Tripathi said. “We’ve been through so much, but it’s not worth it anymore.”

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Subway Got Too Big. Franchisees Paid a Price.

Manoj Tripathi couldn’t shake the feeling that someone had a vendetta against his Subway sandwich shop. A franchisee for nearly two decades, he had done everything he could to keep his restaurant, in a strip mall in Northern California, in perfect condition. But lately it seemed like someone was out to get him.

It was the middle of 2017, and inspectors sent by Subway’s regional manager were finding a new problem to cite each month: a handprint on the glass door, the wrong brand of bathroom soap, cucumber slices that were too thick, he said. They seemed to be little things, but with each write-up, Mr. Tripathi’s grip on his store weakened. If he racked up enough infractions, Subway could terminate his contract and take control of the business.

When an inspector named Rebecca Husler arrived one day that September, Mr. Tripathi thought his restaurant was pristine. Then he noticed that a single light fixture needed a new bulb. Mr. Tripathi rushed out to buy a replacement, but by the time he returned, Ms. Husler had marked it as a violation. A year later, just as he feared, he lost the Subway.

Mr. Tripathi wasn’t paranoid. Ms. Husler really was out to get him. She had specific instructions from her boss, the regional Subway supervisor, to find fault with the store, she said in an interview.

“I was kind of his hit man,” she said, sipping an iced tea at a Starbucks in the Bay Area. Ms. Husler worked for the regional supervisor for nearly a year, she said, and she has come to regret the role she played in pushing a group of store owners out of their investments. The light-bulb moment with Mr. Tripathi, especially, gave her pause. “We’re ruining these people,” she said.

Subway is the largest fast-food company in the world by store count, with more than 24,000 restaurants in the United States alone. It got that way thanks in large part to entrepreneurial immigrants. Unlike at chains such as McDonald’s and Burger King, where many franchises are operated by investment firms, Subway owners are mostly individuals and families. The company’s co-founder, Fred DeLuca, made stores easy to open; most new franchisees are charged a $15,000 initial fee, compared to $45,000 at McDonald’s. In exchange, Subway operators must hand over more revenue than at many other chains — 8 percent of gross sales — while also agreeing to other fees and stipulations.

For half a century, the system worked to mutual advantage. Subway’s value hit $12.3 billion, and countless first-generation Americans bootstrapped their way to success, one foot-long at a time.

By the time Mr. DeLuca died in 2015, though, the company was struggling. Rivals like Jimmy John’s and Quiznos had grown, and Subway’s spokesman, Jared Fogle, pleaded guilty to child sex and pornography charges. Mr. DeLuca’s sister, Suzanne Greco, took over as chief executive, inheriting a company that many felt had grown too fast and haphazardly. In 2016, for the first time ever, more Subway stores closed than opened. But while many franchisees shut down because of underperformance, others operating profitable locations began to feel targeted, too.

For many owners, Subway’s internal workings are a mystery. The chain, which is private, offers far less financial information than other global fast-food peers. In the most recent version of a disclosure document given to prospective franchisees, which is more than 600 pages long, the company notes that it can revise its rules “at any time during the term of your Franchise Agreement under any condition and to any extent.”

The document would be difficult for anyone to process. But Alexander Dembski, who trained many new Subway owners over a 34-year career, estimated to Fortune in 1998 that 30 to 50 percent of the chain’s franchisees were immigrants, and that more than a third of applicants scored poorly on proficiency tests in math and English.

ImageWestlake Legal Group 28SUBWAY-02sub-articleLarge Subway Got Too Big. Franchisees Paid a Price. Subway Restaurants San Francisco Bay Area (Calif) restaurants RENO, Nev. Lake Tahoe (Nev) Franchises Fogle, Jared Federal Trade Commission Fast Food Industry DeLuca, Frederick (1947-2015) Connecticut California

Manoj and Sadhana Tripathi at one of their Subway restaurants, in Orinda, Calif. They once owned nearly 40 stores; now they have 10.CreditJim Wilson/The New York Times

Before his death, Mr. DeLuca was accused of using bullying tactics that left many operators struggling to recoup their investments, leading to lawsuits, regulatory run-ins, government investigations and constant complaints from franchisees. One of the most persistent areas of protest has involved a class of Subway managers known as development agents.

Subway parcels its vast network of stores into more than 100 regional fiefs. Each is overseen by a development agent, who recruits new franchisees, approves buyers for existing stores and sends inspectors — known as field consultants — to conduct monthly reviews. But usually, development agents are also franchisees themselves. When that is the case, they are both in charge of and competing with other store operators, and their own locations are inspected by people they hire.

These feel like conflicts of interest to many Subway owners — giving development agents the means and motivation to shut down competing stores and take over profitable ones by manipulating inspections. Many franchisees who have lost their restaurants say that they have recouped little of their original investments. Intervention from Subway’s headquarters in Connecticut is rare.

Don Fertman, Subway’s chief development officer and a veteran of the company for 38 years, said that owning restaurants helps give development agents “a better understanding of all aspects of owning a small business.” He said the company reviews the agents’ work and expects them to uphold ethical standards, dealing with violations “on a case-by-case basis.”

Across the country, franchisees have lodged complaints and filed lawsuits. In West Virginia, Bhrugesh and Utpala Vyas ran three stores, two of them top performers in the territory, they said. In a 2017 filing in federal court in Connecticut, Ms. Vyas accused the local development agent, the man’s son and an inspector of conspiring to take over the stores by concocting “unreasonably harsh evaluations.”

A judge ruled against Ms. Vyas. Records from local health departments and Subway show that at least two of the stores are now co-owned by the inspector and the development agent. “I feel very bad, and my blood is boiling,” Mr. Vyas said in an interview. “This was our hard-earned money.”

Mr. Fertman said that complaints like those Mr. Vyas filed are “unfounded,” and that Subway “makes every effort” to help noncompliant franchisees improve. He added that the company is “in the business of selling sandwiches — not closing restaurants, not marking people out of compliance.”

“Our business development agents are well-respected members of our business community,” he said. “And when we hear these allegations, I would say that they are false.” He said he was not aware of any exceptions.

For years, the Subway system’s opacity and aggressive pace of development — Mr. DeLuca once dreamed of opening 50,000 stores by 2017 — went hand in hand. The company encouraged stores to open within blocks of existing locations, with development agents often giving the established franchisees a choice: Operate the new restaurant themselves, or compete with someone recruited by Subway. Franchisees, feeling pressured, sometimes took the first option.

“It was assumed that the stores would, eventually, become sustainable,” Mr. Tripathi said. An immigrant from India, he bought into Subway’s expansion in a major way. After two decades spent at companies like Jamba Juice and the Body Shop, opening Subway franchises was his chance to take charge. At one point, he owned 38 stores, and by 2015 he was among the largest franchisees in California’s East Bay region.

Rebecca Husler, a former inspector for Subway, said her boss ordered her to find violations at stores. “I was kind of his hit man,” she said.CreditNathan Weyland for The New York Times

That was when Ms. Greco took over Subway, and the company’s store count began to shrink. In the East Bay, Mr. Tripathi was under the jurisdiction of a development agent named Chirayu Patel, known as Akki. He oversaw a huge, choice territory that included most of Northern California and western Nevada. Mr. Patel also owned dozens of Subway stores.

In 2016, he convened a franchisee meeting in a Sacramento warehouse. He told everyone that Subway wanted to improve its strongest restaurants and shut down the weaker ones, according to Nikku Aulakh, a franchisee who was present.

She left the gathering alarmed. She and many fellow franchisees had been pushed for years to invest huge sums in new stores that were now struggling. Subway’s franchise contract forbids the company from unilaterally closing stores just because sales are weak. But franchisees can lose control of their restaurants for failing to meet Subway’s operating standards — violations cited by inspectors employed by development agents like Mr. Patel.

Ms. Aulakh said Mr. Patel eventually pressured her into closing or selling her four stores in Sacramento, after they received a slew of bad evaluations. “I would have liked to stay in business for another 10 to 15 years,” she said. “I wanted to make more money, but I had no other choice.”

Vishal Sharma, a franchisee in Nevada who owned three stores, described another meeting that Mr. Patel convened in Reno the same year. In front of some 20 store operators, Mr. Patel said that he had “the money to buy the best lawyers,” Mr. Sharma recalled. “At the time, we weren’t scared. We thought that maybe that was just his style. Then we figure out that this guy’s template is not developing the territory, it’s taking away the territory.” (Mr. Patel said in an email that he had been informing the franchisees that Subway’s lawyers were available to answer legal questions.)

At one point, a franchisee sent Mr. Patel an anonymous complaint; he responded with an email to a large group of them, which was reviewed by The Times. He threatened a lawsuit that “would be so huge it would nearly take all of your life earnings in Subway in fighting this suit. Please don’t test me especially when you don’t have any basis.”

Subway terminated Mr. Sharma’s contracts in 2017. Last December, in state court, he accused Mr. Patel of using “rigged compliances” and Subway of employing an “usual structure where the local agent is a supervisor, as well as a competitor.” The case was ordered into arbitration in Connecticut, but Mr. Sharma is appealing the decision.

Ms. Husler, the inspector who called herself Mr. Patel’s “hit man,” said that Mr. Patel considered his own interests when determining what stores would be sent to arbitration, and likely closed. When it came time to conduct inspections, she said, Mr. Patel made it “very clear that his stores were to pass” and that “the people he wanted out of the system were to fail out of the system.”

The Times reviewed text messages about individual franchisees in which Mr. Patel assigned evaluations to certain inspectors “so we can get this guy out of the system.” But when it came to his own stores, there was a different standard, according to Effie Lennox, a former inspector who worked for Mr. Patel in Northern California from 2007 to 2010. She said that he asked her not to report violations at his locations and to email him about them instead.

“That was the problem: He was a franchisee and a development agent,” she said. “And especially with someone like him, having that conflict of interest is the worst-case scenario for the franchisee, because he’s in it for his own benefit, not for theirs.”

A disclosure document that Subway gives to potential franchisees is more than 600 pages long.CreditSonny Figueroa/The New York Times

Ms. Lennox said that she often went behind Mr. Patel’s back to warn franchisees that they were being targeted. “These are people’s livelihoods,” she said. “I felt like I needed to undo the damage that he was doing to these poor people.”

In an email to The Times, Mr. Patel said that he had acted appropriately at all times, and that his goal is for all of the stores in his territory to be successful. He said that evaluations at stores owned by Mr. Tripathi, Ms. Aulakh and Mr. Sharma were “conducted in a manner consistent with evaluations of other Subway restaurants.” There were problems with sales at Mr. Tripathi’s stores and food safety at Mr. Sharma’s locations, he said. Mr. Patel added that he and his team “have no intention of deliberately falsifying” evaluations and would never train inspectors to do so, and that noncompliant restaurant owners are given the chance to correct violations.

Dozens of franchisees in the region decided to appeal to Ms. Greco for help. Mr. Tripathi was one of them. “There is a deep sense of morass within the franchisee community,” the group wrote in a 2016 letter. Soon after, they wrote again, asking that Ms. Greco “designate somebody impartial to look into the matter.” The franchisees said that they suspected Subway’s development agents of commissioning “unfair/biased/questionable evaluations” and forcing franchisees out “at a throwaway price.” They feared retaliation. “Needless to say, time is of the essence,” they wrote.

Ms. Greco did not respond, they said. (Subway said it always has “open lines for franchisees through multiple channels of communication.”) But Mr. Patel heard about the letter and was enraged, Ms. Husler said. He wanted all of the franchisees involved ejected from his region, she said. Ms. Husler recalled Mr. Patel instructing her: “Go in there and just throw your probe right into that food. It’s not going to make temperature, and you can mark them out of compliance.”

“He actually gave us specifics on what he wanted us to do,” Ms. Husler added — such as directing her to visit during shifts with inexperienced employees who were more likely to make mistakes.

Not all of the franchisees who have left the Subway system operated their stores perfectly, and many ran afoul of local health inspectors in addition to the company’s evaluators. But dozens of franchisees contend that issues that never bothered Subway during its rapid expansion suddenly put them out of business in recent years.

Those franchisees feel that they have little recourse. Near Sacramento, Minal Khatri and her husband owned a Subway in a prime location, just off the freeway. After Mr. Patel’s inspector repeatedly marked it out of compliance around 2014, she recalled, she and her husband started to fight constantly: Why were they failing? Why couldn’t he get everything into compliance? Ms. Khatri said they both repeatedly asked Subway headquarters for advice, but never got a response. Eventually, the company took her into arbitration, and she said she was told to find a buyer for her store or risk forcible closing.

Mr. Patel rejected all of the candidates she found, she said; records indicate that he now owns her restaurant. Ms. Khatri and her husband divorced. It was only after it became clear that Mr. Patel wanted to buy her store, she said, that she realized her husband might not have been to blame for everything after all. Mr. Patel said the Khatris asked him to buy the restaurant.

Another franchisee, Kanwardeep Virk, said that starting in 2006, he operated four stores in the Lake Tahoe area that were profitable and compliant with Subway’s standards — his “babies,” he called them. Suddenly, at the beginning of 2016, he said, he started failing evaluations. He said one inspector sabotaged a meatball storage bag, by puncturing it with a thermometer and then waiting to record its temperature.

Subway started arbitration proceedings against Mr. Virk. Such cases are typically heard near Subway’s headquarters in Connecticut. Many store owners cannot afford to travel to defend their stores in person, and argue their cases by phone or by filing documents.

Subway is the largest fast-food company in the world by store count, with more than 24,000 locations in the United States alone. But since 2015, it has cut the number of stores by more than 2,000.CreditRainer Behrens for The New York Times

In 2018, Subway initiated the equivalent of 29 litigation actions (mostly arbitrations) per 1,000 franchisees, compared to 1.4 actions for McDonald’s, Dunkin’ Donuts, Pizza Hut, Burger King and Wendy’s combined, according to an analysis of the companies’ disclosure documents by John Gordon, a restaurant industry expert at Pacific Management Consulting Group.

Eventually, Mr. Virk gave up. Mr. Patel now owns two of his former stores. In his emailed statement, Mr. Patel wrote that the restaurants had problems with food safety and labor practices and owed back rent, and that Mr. Virk himself arranged to close or transfer them.

The Federal Trade Commission requires Subway to produce an annual list of franchisees with permanently closed stores, which the company said “allows prospective franchise owners the opportunity to contact them to discuss their experience with Subway.” But many franchisees who received termination letters after being deemed noncompliant eventually sold their stores — sometimes under duress and often for far less than they believed the stores were worth, several franchisees said. Those locations are recorded as transfers.

Franchisees say that this classification allows Subway and other franchisers to mislead potential store owners. But government oversight is limited. The F.T.C.’s compliance guide for franchisers has not been updated in more than a decade. Lois Greisman, the associate director of the Division of Marketing Practices, said that the agency had not focused on franchise misconduct or taken any franchise-related enforcement action in years.

Subway is in the midst of an ambitious makeover campaign, hiring a firm that has worked with Tiffany & Company and Saks Fifth Avenue, adding to its menu and stocking remodeled stores with new technology.

Since Mr. DeLuca’s death, the company has been on shaky footing. It was slower than many rivals to launch a digital loyalty program and mobile ordering options. Revenue fell to $10.4 billion last year, down 9.5 percent from 2015, according to the market research firm Technomic. In recent months, the chain has added a new chief information officer, a chief marketing officer and a North American vice president. Ms. Greco retired last year.

Subway’s store count has shrunk by more than 2,000 since 2015. “We have to look at each and every location and optimize our footprint accordingly,” said Mr. Fertman, Subway’s chief development officer. “We have to make sure, ultimately, that we have the right restaurants in the right locations.” Other executives have called it an “optimization” effort.

Senator Catherine Cortez Masto, a Democrat from Nevada, wrote in a letter in May to the Small Business Administration that franchisees had accused Subway of “using minor infractions to steal the stores from owners through a rigged arbitration system,” citing reporting by The New York Post. “I am troubled by increasing complaints from entrepreneurs about unfair practices that are causing them financial difficulties,” she wrote. The agency said in its reply that, out of 1,551 federally backed loans approved for Subway franchisees in the past decade, 12 percent were charged off, or deemed unlikely to be repaid — a far higher rate than the average franchise loan.

Subway, in an email, said that the franchisees who alleged misconduct were “anomalies,” and that its surveys and “listening tours” found that 80 percent of franchisees in the system want to keep working with the company.

On the day after Memorial Day, Mr. Tripathi and his wife, Sadhana, stopped by one of the 10 Subways they still own, in an outdoor shopping mall in Orinda, Calif. The cashier at the restaurant cracked jokes with customers. Fans spun overhead. Every light bulb shone.

The Tripathis said they fear they could lose yet more of their stores. They sued Subway and Mr. Patel in 2016 in California court, accusing the development agent of “using a variety of techniques including trumped-up and false inspection reports to justify terminating certain franchises.” Subway invoked the clause in the franchisee contract that requires disputes to be resolved in private arbitration in Connecticut. The Tripathis have filed an appeal for the case to proceed in California.

Mr. Tripathi, a trained engineer with a business degree, and Ms. Tripathi, who holds a doctorate in chemistry, said they were mostly able to read and understand the reams of legal documents produced by the conflict. Many of their fellow franchisees cannot, they said. “The reason we were fighting them is that we can,” he said.

But he and his wife are getting tired of the Subway system. “We worked so hard, we gave up our own careers,” Ms. Tripathi said. “We’ve been through so much, but it’s not worth it anymore.”

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