FDD Items 3 & 4 · 2025 filing

Subway litigation history

What Subway disclosed about lawsuits, arbitrations and bankruptcy in the 2025 Franchise Disclosure Document. Item 3 lists the material legal actions a franchisor must report; Item 4 covers bankruptcy. This is the franchisor's own disclosure, not a court record, and not legal advice.

Items 3 (litigation) & 4 (bankruptcy) at a glance

What the filing discloses

Cases disclosed: 80; Item 3, as counted in the filing

Largest settlement, franchisor's own cases: $30.9M; As stated in Item 3

Bankruptcy (Item 4): None; Franchisor, parent, predecessor or officer

Filing year: 2025; Disclosures cover the prior ten years

Extracted from the 2025 Franchise Disclosure Document

Item 3: litigation

Item 3 refers to Exhibit L, which prints 50 actions (Sections A-D: matters involving the franchisor, its affiliates and management) and 34 actions the franchisor and its affiliates filed against franchisees in the last fiscal year (Section E). Counted one per dispute, that is 80 matters: Section E lists some disputes twice (an arbitration and the court action confirming or refiling it). The largest settlement it prints is a $30.9 million class settlement fund agreed in principle in two FACTA receipt class actions (Flaum / Alan). Pending claims are allegations, not findings.

Item 3 (litigation) · 80 matters disclosed · 10 pending listed

Litigation cases

The franchisor

Pending (6)

Jeffrey Offutt v. Doctor’s Associates, LLC
pending
Brought by a franchisee · filed 2024-11-21 · American Arbitration Association · 01-24-0008-8333 and 01-24-0008-8328
“19) Jeffrey Offutt v. Doctor’s Associates, LLC (American Arbitration Association Case # 01-24-0008-8333). On November 21, 2024, Jeffrey Offutt (“Claimant”), filed a demand for arbitration”Page 886 of the 2025 FDD, Item 3
Outcome: “On January 17, 2025 Claimant filed an Answer and Affirmative Defenses to Respondent’s Counterclaims.” (page 887)
John D. Clark, Brent C. Olson, Peter K. Knoff v. Doctor’s Associates LLC
pending
filed 2024-02-15 · American Arbitration Association · 01-24-0000-7482
“12) John D. Clark, Brent C. Olson, Peter K. Knoff v. Doctor’s Associates LLC, (American Arbitration Association, Case Number 01-24-0000-7482). On February 7, 2024, the Company issued a notice of termination”Page 884 of the 2025 FDD, Item 3
Outcome: “Dispositive Motion as to Claimants’ claims regarding the Minnesota Franchise Act and the CT Unfair Trade Practices Act. The Arbitration is pending.” (page 885)
M. Anwer Mysorewala v. Doctor’s Associates LLC (#1292)
pending
Brought by a franchisee · filed 2023-02-21 · American Arbitration Association · 01-23-0000-7499
“10) M. Anwer Mysorewala v. Doctor’s Associates LLC (#1292) (American Arbitration Association, Case No. 01-23- 0000-7499). On February 21, 2023, Claimant M. Anwer Mysorewala filed for a demand for arbitration”Page 884 of the 2025 FDD, Item 3
Outcome: “Counterclaim, and Request for Declaratory Relief. The arbitration has been stayed.”
Doctor’s Associates LLC and Subway IP LLC v. Lyudmila Khononov
pending
Brought by the franchisor · filed 2022-12-25 · United States District Court, Eastern District of New York; related American Arbitration Association demand; U.S. Bankruptcy Court, Eastern District of New York · 1:22-cv-07637-FB-RML
“45) Doctor’s Associates LLC and Subway IP LLC v. Lyudmila Khononov, United States District Court, Eastern District of New York, Case Number 1:22-cv-07637-FB-RML. On December 25, 2022, Doctor’s Associates LLC and Subway IP LLC filed a complaint”Page 894 of the 2025 FDD, Item 3
Outcome: “On July 30, 2024, Lyudmila Khononov filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Eastern District of New York, staying further action in the litigation.”
Doctor’s Associates LLC v. Lawrence M. Walker
pending
Brought by the franchisor · filed 2022-09-30 · United States District Court, District of Connecticut (petition to compel arbitration of a Memphis, Tennessee state-court complaint; franchisee later in the U.S. Bankruptcy Court, Western District of Tennessee) · 3:22-cv-1227
“3) Doctor’s Associates LLC v. Lawrence M. Walker (United States District Court, District of Connecticut, Case No. 3:22-cv-1227). On September 30, 2022, DAL filed its Petition to Compel Arbitration”Page 882 of the 2025 FDD, Item 3
Outcome: “The Trustee’s Motion to Dismiss due to failure to pay is scheduled for a hearing on February 18, 2025. The Debtor’s Motion to Approve Settlement is scheduled for a hearing on March 4, 2025”
Subway Real Estate, LLC v. Bidhan Biswas; Doctor’s Associates LLC v. Bidhan Biswas
pending
Brought by the franchisor · Supreme Court of the State of New York, County of Nassau; Connecticut Superior Court, District of Ansonia/Milford (application to compel arbitration) · 611442/2023 and AAN-CV24-6054418-S
“11) Subway Real Estate, LLC. V. Bidhan Biswas; (Supreme Court of the State of New York County of Nassau, Index No. 611442/2023). Former franchisee Bidhan Biswas filed an answer, affirmative defenses, and counterclaims”Page 884 of the 2025 FDD, Item 3
Outcome: “DAL’s application to compel arbitration was granted on August 15, 2024.”

Concluded (5)

Arizona Subway Development Corporation v. Doctor’s Associates LLC
concluded
filed 2022-09-30 · American Arbitration Association · 01-22-0004-1309
“41) Arizona Subway Development Corporation v. Doctor’s Associates LLC, (American Arbitration Association, Case # 01-22-0004-1309). On September 30, 2022, the Claimant, Business Developer (“BD”) Richard Schibler”Page 893 of the 2025 FDD, Item 3
Outcome: “termination of the BD Contract and DAL paid Claimant $4,000,000. On June 5, 2023, the Claimant withdrew all claims in the arbitration with prejudice.”
Sang W. Ji, et al., Claimants, v. Franchise World Headquarters, LLC, Respondents
concluded
Brought by a franchisee · filed 2022-11-30 · American Arbitration Association, Bridgeport, Connecticut · 01-22-0005-0163
“43) Sang W. Ji, et al., Claimants, v. Franchise World Headquarters, LLC, Respondents (American Arbitration Association Case No. 01-22-0005-0163). On November 30, 2022, Claimants, a group of Subway franchisees, filed this demand for arbitration”Page 893 of the 2025 FDD, Item 3
Outcome: “We signed Settlement and Extension Agreements with seven of the franchisees, and the matter concluded October 24, 2024. Two claimants withdrew from the arbitration.”
Shane Flaum v. DAI, d/b/a Subway; Jason Alan v. Doctor’s Associates Inc. d/b/a Subway, McCan Inc. d/b/a Subway
concluded
Brought by a third party · filed 2016-06-06 · United States District Court for the Southern District of Florida; United States District Court for the Central District of California (Alan transferred to S.D. Fla.) · 0:16-cv-61198 and 2:16-cv-0495
“31) Shane Flaum, Plaintiff v. DAI, b/d/a Subway®, Defendant (United States District Court for the Southern District of Florida, No. 0:16-cv-61198) Jason Alan, Plaintiff v, Doctor’s Associates Inc. d/b/a Subway, McCan Inc. d/b/a Subway, Defendants (United States District Court for the Central District of California, No. 2:16-cv-0495).”Page 890 of the 2025 FDD, Item 3
Outcome: “The parties have agreed on a settlement in principle, which includes a class settlement fund of $30.9 million in consideration for a release of all claims on behalf of DAI, its affiliates and franchisees. The settlement resolves both cases. DAI did not admit a”
In the Matter of: The Commissioner of Financial Protection and Innovation v. Doctor’s Associates LLC d/b/a Subway
concluded
Government or regulatory action · California Department of Financial Protection and Innovation (Consent Order; no administrative enforcement action was filed)
“47) In the Matter of: The Commissioner of Financial Protection and Innovation v. Doctor’s Associates LLC d/b/a Subway (California Department of Financial Protection and Innovation) Consent Order Oct. 28, 2020 (no case number).”Page 894 of the 2025 FDD, Item 3
Outcome: “on November 4, 2020, we and the Commissioner entered into a Consent Order whereby we agreed to stop such violations, and pay penalties totaling $410,000 for the alleged violations.” (page 895)
Settlement Agreement Between the United States of America, and Doctor's Associates Inc. and Subway Real Estate Corp.
concluded
Government or regulatory action · United States Department of Justice (negotiated settlement agreement; no hearing, trial or adjudication) · DJ 204-32-44
“46) Settlement Agreement Between the United States of America, and Doctor's Associates Inc. and Subway Real Estate Corp. (DJ 204-32-44). On July 31, 2007, DAI, SREC and the United States Department of Justice (DOJ) negotiated a Settlement Agreement on compliance with the Americans with Disabilities Act.”Page 894 of the 2025 FDD, Item 3
Outcome: “DAI paid $25,000 to the United States Treasury as a civil penalty.”

Parent, affiliates, master franchisor and subfranchisor

Pending (4)

Anna Tollison, et al. v. Subway Restaurants, Inc., Franchise World Headquarters, LLC, Subway Franchisee Advertising Trust Fund Ltd.
pending
Brought by a third party · Franchise World Headquarters, LLC and Subway Franchisee Advertising Trust Fund Ltd. (the filing says at item 44 that 'Subway Restaurants, Inc. is not an entity') · filed 2024-10-28 · United States District Court, Eastern District of New York · 1:24-cv-07495-CBA-SJB
“18) Anna Tollison, et al. v. Subway Restaurants, Inc., Franchise World Headquarters, LLC, Subway Franchisee Advertising Trust Fund Ltd., Eastern District of New York (Case No. 1:24-cv-07495-CBA-SJB). On October 28, 2024 plaintiff filed a proposed class action lawsuit”Page 886 of the 2025 FDD, Item 3
Outcome: “The parties will partcipate in a mediation on March 18, 2025.”
Subway Developments (London) Limited, London Food & Beverage Company Limited & General Foods Limited v Subway International B.V.
pending
Subway International B.V. · filed 2024-08-30 · International Centre for Dispute Resolution · 01-24-0007-5495
“17) Subway Developments (London) Limited, London Food & Beverage Company Limited & General Foods Limited v Subway International B.V. (International Centre for Dispute Resolution, Case No. 01-24-0007-5495). On August 30, 2024, the claimants, brought claims against SIBV”Page 886 of the 2025 FDD, Item 3
Outcome: “The parties have agreed to select a panel of 3 arbitration. Both parties have each elected their select arbitrator and they are currently in process of discussing the third arbitrator.”
Subway Developments 2000 Inc. v. Subway Franchise Systems of Canada, ULC
pending
Subway Franchise Systems of Canada, ULC · filed 2022-10-13 · American Arbitration Association / International Centre for Dispute Resolution; related petitions in the U.S. District Court for the Southern District of New York and an application in the Court of King’s Bench of Alberta · 01-22-0004-3305
“4) Subway Developments 2000 Inc. v. Subway Franchise Systems of Canada, ULC (American Arbitration Association Case # 01-22-0004-3305). On August 15, 2022, SFSC issued a notice of termination”Page 882 of the 2025 FDD, Item 3
Outcome: “SFSC intends to continue contesting and fully defending itself in all these matters. It is not known as of this date when a final award will be rendered by the arbitrator.”
Direction Régionale des Entreprises, de la Concurrence, de la Consommation, du Travail et de l'Emploi (DIRECCTE) v. Subway International, B.V. and Subway Realty of France
pending
Government or regulatory action · Subway International B.V. and Subway Realty of France · Paris Commercial Court; on appeal to the Paris Court of Appeal
“Direction Régionale des Entreprises, de la Concurrence, de la Consommation, du Travail et de l'Emploi (“DIRECCTE”) Plaintiff, v. Subway International, B.V. (“SIBV”) and Subway Realty of France”Page 880 of the 2025 FDD, Item 3
Outcome: “Therefore the dispute will continue only with the four ex franchisees who are still in the proceedings and the debate before the Paris Court of Appeal will focus exclusively on the admissibility of their claims.” (page 881)

This list shows 15 of the 80 matters Item 3 discloses; the rest are in the filing.

Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.

Before you weigh a lawsuit

How to read Item 3

A franchisor must disclose pending actions and any material civil action involving the franchise relationship, plus convictions or civil judgments for fraud, unfair or deceptive practices, or franchise-law violations, going back ten years. A case the franchisor brought against a franchisee counts too. Item 3 does not include every dispute: settled claims below the materiality line and matters resolved in private arbitration can be absent.

Questions worth asking current and former franchisees, using the contact list in Item 20:

Were you, or anyone you know in the system, party to a dispute with the franchisor?
Was it resolved by settlement, arbitration or a court, and on what terms?
Has the number of disputes gone up or down since you signed?

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