Subway in Dispute With Franchisees Over Control of Ad Budget

Subway founder Fred DeLuca went to my college, The University of Birdgeport. He was already making money before he even graduated. While his company, with 26,191 restaurants in 85 countries, now calls itself "the world's largest sandwich chain," DeLuca has a reputation as a tough guy who's been known for being abrasive to his agencies and employees.

CNN.money reports that two of the chain's franchise associations, representing nearly 25,000 franchisees, are suing DeLuca to force the company to give them a greater say in how the 4.5% of their sales that they contribute to an advertising fund is spent.The fund is valued at approximately $400 million.

Jim Hansen, CEO of the North American Association of Subway Franchisees (NAASF )explained, "Franchisees fear that, under the new structure, the ad dollars will be put toward campaigns that drive up sales, such as two-for-one sandwich specials, at the expense of profits."