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Subway Is Giving Away Free Sandwiches. Will Franchisees Pick Up the Tab?

Subway Is Giving Away Free Sandwiches. Will Franchisees Pick Up the Tab?
Photograph by Amy Sussman/AP Photo for Subway

Franchise units are sometimes sold to would-be entrepreneurs as businesses-in-a-box. The entrepreneur plunks down some cash and gets the equipment and branding she needs, not to mention detailed instructions on how to run the business. Those instructions can be a lifeline for the business owner—or a leash that allows the franchiser to yank an entrepreneur’s prospects in any direction.

Subway franchisees who operate shops on U.S. Navy bases were recently reminded of how closely their fortunes are tied to the corporate chain. The company, it turns out, has been printing coupons entitling bearers to a free foot-long sandwich with the purchase of a 21-ounce soda at certain locations, including naval installations in Jacksonville, Fla.; Norfolk, Va.; and San Diego. The promotion is set to run through the month of June and seems likely to get customers through the door. One problem: Franchisees could expect to lose more than a dollar on each sale.