Subway, soldier settle Dallas franchise dispute

The case, which garnered attention across the globe, took a big step in Batie's favor in October when a judge ruled that Subway Real Estate Corp. had violated Batie's rights under the Servicemembers Civil Relief Act. The law bars anyone from terminating an active-duty service member's installment contract, including leases, without a court order.

Dallas Morning News
January 5, 2010

Subway, soldier settle Dallas franchise dispute
Karen Robinson-Jacobs / The Dallas Morning News


The real estate arm of sandwich maker Subway and a former Army reservist have settled a 2-year-old legal battle in which the reservist was stripped of his Dallas restaurants, according to court papers filed Monday.

Terms of the settlement were confidential. The settlement was reached about five weeks before Lt. Col. Leon Batie Jr.'s scheduled redeployment to the Middle East.

"Subway and Lt. Col. Batie have terminated their relationship and settled all of their disputes on mutually agreeable terms," said Grant Walsh, an attorney for Batie.

Settlement papers were filed Monday in three separate courts, all related to the case.

"I feel good, I really do," said Batie, now on active duty in the Army. "I'm glad I can move forward and turn the page."

Batie left his two Subway restaurants in the care of his younger brother and another Subway franchisee when he was deployed to Afghanistan in 2005.

After the stores fell behind on rent, Batie's franchise contract with Subway was terminated and the stores were reclaimed and sold to Subway insiders.

The case, which garnered attention across the globe, took a big step in Batie's favor in October when a judge ruled that Subway Real Estate Corp. had violated Batie's rights under the Servicemembers Civil Relief Act. The law bars anyone from terminating an active-duty service member's installment contract, including leases, without a court order.

Peter Marketos, an attorney for Subway Real Estate Corp., confirmed that "the parties have settled their dispute" but declined to comment further.

A spokesman for the Subway corporate office could not be reached for comment.

71 comments as of January 6, 2010

Posted by dallasmatt71 | 11 hours ago

That answers it then. Thanks.

Posted by Common Sense | 21 hours ago
Ever since this story was first revealed, I have not set foot inside of a subway mosh pit. In addition, my friends can say the same thing and are doing everything they can to spread the word.

Screwing this serviceman will cost this lowly group of maggots more than they made on immoral act.

Posted by ArmyRulz | 23 hours ago
Subway and its attorney-hack Marketos should be ashamed of what they did to an American soldier while he was serving our country.

We risk our lives every day to protect the American way of life and we rely on the special protections afforded us regarding homefront matters so that we can fully focus on our mission.

Without these protections, our soldiers would always be worried about what is happening to their homes, jobs, or businesses…when we should be more worried about shooting the terrorists who are trying to bomb our great nation.

Posted by stevekincaid | 23 hours ago
Hooray for the little guy. All you soldier-haters need to realize something: SUBWAY BROKE THE LAW and now they are dealing with the consequences. Even if the soldier got behind in rent, federal law required Subway to follow certain procedures to terminate the contracts…and a judge already decided Subway failed to do so.

Let's face it, the last thing that should be on a soldier's mind in a war zone is whether his rent was paid half-way around the globe.

God bless our brave soldiers…and Quiznos!

Posted by ArmyNippon | 23 hours ago
Way to go Colonel! Your military brothers and sisters applaud you for fighting the good fight and standing up against Subway's corporate greed. Without soldiers like you, corporations would trample on the very samne rights for which we fighting to defend around the globe. I hope the DoD tells Subway to take a hike from my base (and all other military bases for that matter).

Posted by DMNKarenRobinson-Jacobs | 1 day ago
The leases (subleases actually) were executed by Leon Batie Jr. as an individual. Not by a corporate entity.

Posted by onejoey | 1 day ago
Hey dallasmatt71 - don't quit your day job… :-)

Posted by dallasmatt71 | 1 day ago
Don't get me wrong - I think it was a slimy thing to do on Subway's part. If I liked their crappy food I'd boycott them over this. But I'm already boycotting them because their food sucks.

I just don't agree with this because the action wasn't taken against him but against a corporation that he was a shareholder in.

Posted by dallasmatt71 | 1 day ago

Where does it say that in the SCRA? I don't think it does and I believe you are merely speculating (though I might be wrong).

A corporation is an entity separate from its shareholders and shareholders are not necessary parties to a legal proceeding involving the company. Moreover, a shareholder CANNOT represent the company in court - they don't even need to be there - heck, shareholders aren't even entitled to notice that a legal proceeding is happening.

Now I understand this wasn't a legal proceeding, merely a lease termination and losing a franchise. But the same principles apply: A corporation is not the same thing as its shareholder(s).

Posted by Crossroads | 1 day ago
If you will Google the Servicemembers Civil Relief Act,you will find that it "is intended to postpone or suspend certain civil obligations to enable service members to devote full attention to duty and relieve stress on the family members of those deployed servicemembers." Doesn't mean Subway doesn't get their money. It just means the proceedings have to be delayed until such a time that the service member is able to have time to prepare and appear in court to deal with the situation. Kinda hard to prepare when you are dodging bullets and roadside bombs. He needs his mind on what he's doing there. Not what is going on back here. He thought he had things taken care of. Brother & the other francise screwed up. If Subway had gone thru the legal channels PROPERLY, they would either had got the back rent or been awarded the francise. Because the company was mostly or wholely owned by Batie, & he was called up to active duty, it falls under the Servicemembers Civil Relief Act. DMN a little more research on your part MIGHT confuse people less. Well… MOST people.

Posted by dallasmatt71 | 1 day ago

As if their crappy food wasn't enough reason (someone else called them 'salad sandwiches' - how spot-on!).

Posted by checkers | 1 day ago

Monday night we watch "Chuck" and have a Subway foot long, every Monday night. Except this Sunday when there is an additional 2 hour special.

Posted by david wayne osedach | 1 day ago
I am very happy for Batie, And this episode should serve as a warning to anyone considring a Subway Franchise: don't!

Posted by grumpy jones | 1 day ago
So after reading about this for over a year, it comes down to subway getting the shaft. Why,
number one the batie guy got the franchise and did not abide by its rules.
Number two is you must pay your bills or you will lose it. Now this batie guy was called up and he had a brother who would contunue running the subway. He did something with the income as he was not paying his bills on the busingss, thus no payee, no goods delivered to you, thus no goods, nothing to sell, thus nothing to sell, out of business. Now Subway had every right to sell the franchise as they have standards to keep and this brother did not keep them up.
So now here we are who does batie sue, his no payee brother or a corp who has money. Now here comes the use of the race card or the service card. Cry that I am getting screwed by those mean old corp money grabbers and I am not at fault that I broke my contract with lousy pay and terrible management. Thus the mean old corp must pay for some numbskul brothers failure to his brother.
I plan to eat at Subway this eve for they are not at fault at all.

Posted by rylcrwn | 1 day ago
OMG, why is every article turned into a race issue? No mention at all of the ethnic origin of the solider…Why can't articles be discussed based on the facts in the article and not have anything added to them?

in answer to question #1- Because these comment boards give idiots a forum to act like they're not really idiots, who have never heard of spellcheck, by the way. If you don't know the difference between know and no… you shouldn't be writing anything.
In answer to question #2: Pretty much the same as #1.

Posted by dallasmatt71 | 1 day ago

Of course they did.

They has a lease with "Batie Enterprises, Inc." NOT with a servicemember. Batie Enterprises, Inc. is a separate and distinct entity from its owners (duh, the whole purpose of a corporation).

Batie Enterprises, Inc. failed to pay its rent and thus broke its lease.

Posted by MarshmallowGoo | 1 day ago
People are boycotting Subway and calling their HQ for comments because of this guy's poor business choices? All I can say is thanks. I hate waiting in lines, and you've all removed a mess of annoyances that existed between me and my Meatball Sub fix.

….Geesh, I can't be serious with this mess.

You're arguing and fighting over Subway Sandwiches…LOL! Go you brave protest loving ppl.

Posted by Tyger2 | 1 day ago
I think Pretty Vacant's point is that in a situation such as this somebody is getting shafted… The SSRA does not stop that, it only keeps it from being the service person getting shafted.

In a case such as this where rent isn't getting paid, it may be the building owner who gets shafted because heo still has to pay his mortgage, taxes, maintenance etc or it may be Subway who is having to pay the rent for the store.

The service man can keep his store with the help of SSRA but that won't help the building owner if he can no longer pay the mortgage on the building and gets foreclosed on.

It would be nice if someone in the line could afford to absorb the cost as their "patriotic duty" and in this case it may be, but it isn't always the case

Posted by Concern Person | 1 day ago
I am sitting here cracking up at some of the comments. One in particular write a letter to make sure the rent is being paid.
I would like to see you dodge a bomb while writing a letter to make sure the rent is paid.
You have got to be kidding…..
One thing know one has responded too is that Subway did not take the correct steps legally to foreclose or take the property back. I am sure they have plenty of corporate lawyers, so why did Subway take the shady route….
Now think about that…

Posted by Jimtexas | 1 day ago
Subway should not have sold his stores out from under him. Period. The soldier's brother and the other franchisee are to blame for the failure. Bottom line—regardless of who is at fault for the failure, Subway had no right to do what they did.

Posted by Thom Baird | 1 day ago
Everyone should forever and ever stay away from Subway. They are poor Americans and we should never do business with them ever again.

Posted by ltcmgm78 | 1 day ago
@ pretty vacant:

I will disagree with you for a minute. From my experience as a retired military member, the Soldier and Sailors Relief Act was created to preclude exactly what happened in this circumstance. With two wars going on, military personnel sometimes have to pick up and leave in a hurry to go where they're needed. The Act merely prevents adverse actions without due course. A military member should not be deprived of his/her ability to earn a living in a chosen field as long as it does not conflict with military duties. Selling these locations to Subway insiders didn't help matters, either.

Posted by Tx | 1 day ago
Subway was wrong to sell his francises ala insider trading but and it's a biggy folks. He left his younger brother and another franchisee in charge of his 2 stores. What responsibility was it of theirs to ensure the bills were being paid? If they had done their job, this would never have occurred and there would not be all this negativity. The blame should be shared.

Posted by dallasmatt71 | 1 day ago
I would be very surprised if the Servicemembers Civil Relief Act actually applied to this case.

Subway did not have a lease agreement with this man personally, they had an agreement with his company, which would have been either an LLC or a corporation (nosane person runs a restaurant as a sole proprietorship and I doubt Subway would allow it). HE didn't break the lease by not paying - his company did. Subway didn't penalize HIM, they penalized his company. It's not the same thing.

Posted by terrellnana | 1 day ago
OMG, why is every article turned into a race issue? No mention at all of the ethnic origin of the solider…Why can't articles be discussed based on the facts in the article and not have anything added to them?

Posted by JB1 | 1 day ago
People seem to forget the earlier articles about the power grab by the exec in Subway that used his leverage to gain control over the stores that he personally wanted as investment.

Posted by pretty vacant | 1 day ago
What I find most amusing about this site, is the large numbers who often disagree with me, yet are too weak in their opinion to formulate and express their own opposition. Few really want to discuss facts at a meaningful level. They hide behind political correctness and public opinion (which after all, is what most of these articles are designed to elicit). I find, when people are challenged, they get defensive. I can always tell when I raise a valid issue by the number of passive aggressive “thumbs down”. Sweet.

Posted by nicksantorro | 1 day ago
thats also my real name and no there is no such thing as a mafia,

Posted by fitz4 | 1 day ago
Grumpy Jones,
Who said anything about race?!?

Posted by Arnold_ziffel | 1 day ago
I am happy for our soldier. How can we expect anyone to serve or defend our country if they can expect to find their livlihood gone when they get back? I hope the penalty to Subway was severe; they certainly earned it.

Posted by DallasVoter | 1 day ago
The article states: "Batie left his two Subway restaurants in the care of his younger brother and another Subway franchisee when he was deployed to Afghanistan in 2005."

So it would appear that both parties (including the brother and the "other" Subway franchisee) were at fault.

A good businessman would make sure something as simple as rent was taken care of in his absence though and any good business should be familiar enough with that particular law.

I don't eat at Subway since I don't like salad sandwiches. ;)

Posted by Kirkp | 1 day ago
Wow, to the republican's comments below, now you know why so many of us have left the republican party. You are the reason the republicans will end up being nothing more than a small minority party in the South.

Posted by pretty vacant | 1 day ago
On to the topic. Subway’s bills don’t stop just because someone is deployed. I presume Subway either owned the property or the lease. Do you think Subway’s lender deferred their mortgage or their lease under this circumstance? Of course not. You can’t blame Subway; they need to cover their own overhead. For those with a high horse, use the same example inserting you as Subway. You have a rental house with a mortgage. If the renter does not pay his rent (deployed for an extended period), how will you service your debt? At some point, you need to find another tenant or face foreclosure. So which is it, when your own money/asset is at stake? If your view changes when you become delinquent on your rental and face foreclosure, aren’t you a hypocrite?

I understand the law to protect servicemen and it may have been breeched in this matter (I haven’t read the law, and I assume most others have not either). However, we need to understand this results in the law of unintended consequences. Do you think Subway (or any franchise business) will desire to franchise any military personal in the future, if servicemen can be allowed to run the unit in their absence and not pay any or all of their fees in the interim? It easy to blame some unsympathetic greedy conglomerate. However, people fail to ask who makes up for that expected (lost) revenue. And what happens to the next serviceman who seeks a franchise from the same firms who had to show preferential treatment due to their military responsibilities? It’s a slippery slope…

Posted by grumpy jones | 1 day ago
Here we go again. Pay off a dead beat because of his race. This guy and his brother are using their race to gouge money from an honest company.
Why did he not sue his brother who didn't pay his debts.

Posted by BeccaFromTX | 1 day ago

"And if it wern't for us real republicans, white america would have already dissapeared."

Are you saying America is only for white people? Will you be excluding certain religious sects next?

I believe that America was for every American no matter their ethnicity, religion… That is what we fought for when we won our independence, it is what we fight for now.

Posted by A Little Common Sense | 1 day ago
Hmmm..wasn't "Nicky Santorro" the gangster played by Joe Pesci in the movie Casino? Seems to me Mr. Santorro's comments on here are the mouthpiece of Subway—a bunch of greedy corporate gangsters who'd rather make a buck than assist our soldiers who are fighting on foreign soil. The bottom line is that Subway, not the soldier, violated the law. Talk about a five-dollar-shft-job!

Posted by Nanie73 | 1 day ago
said the nazi.

Posted by pretty vacant | 1 day ago
“I had always thought of Subway as a good company, but this issue and another experience I recently had have made me wonder. I was at the Subway at Mockingbird and Abrams and a customer walked in with a homeless guy, planning to buy a sandwich for the guy. The manager walked up and started berating the homeless guy in front of everyone in the store, saying he needed to stop asking people to buy food for him. He embarrassed the guy and we were all embarrassed to have been present for that scene. I didn't buy a sandwich that day and haven't been back again”

How ironic. Having been pestered by that same homeless person, I stopped eating at that Subway and Zuzu. If business owners have finally run him off, I will patronage them again. Thanks to the Subway manager who realized that guy is destroying his client base! (the same reason I no longer go to Taco Cabana on lower Greenville, and 7-11 around Ross and Washington). Maybe the above poster enjoys interaction with deadbeats, preying upon his good nature. I don’t.

Posted by dukeisduke | 1 day ago
Parker, you make the rest of us Republicans look bad. Subway violated the law, and Lt. Col. Batie was due a judgment, and it doesn't matter whether Batie is white, black, or pink with purple polkadots. The law is the law.

Posted by grannies5 | 1 day ago

I am just as angry about the mistreatment of one of our servicemembers as you all are but don't punish the other franchisees for corporate behavior. Many people depend on these jobs to put food on the table for their families. Do your research and boycott the company and it's officers not the guys trying to scrape out a living by working for them!

Posted by checkers | 1 day ago
To: Wishing Dallas had a better paper

The actions of the manager is the problem not Subway. Shame on the manager for his actions, a man needs food and the store made a sale what's the problem? People seem to forget.. ."for the grace of God there go I"

Posted by nicksantorro | 1 day ago
YACK YACK, see your one of those biast people defending a business man for what he is, a soldier, he is not above the law nor is he better than MR. SCHMO who is also a business man and due to the economic crisis his business shut down, but wait he served in WWII does that make it alright for him NOT to pay rent,, again the judge Just said there was a LAW being Violated, thats the loop hole, the draw back is he is open for business he is getting money and profit at that, he should pay his rent and Franchise fees,

Posted by Msimm74 | 1 day ago
Pay rent, eat fresh!

Posted by yackyack | 1 day ago
Obviously, Subway did something wrong—which is exaxctly why a judge ruled they BROKE the law and violated a soldier's rights. All you people blaming the soldier seem to forget that there are special legal protections afforded our men and women who serve in uniform, even if they run into financial troubles while they are deployed. It seems to me the Department of Defense should immediately remove all Subway stores from military bases, at the very least. I'm still never going to eat there again because I support our troops and there is no way a company like Subway should be rewarded with a single dollar of my hard-earned money when they are ready to slap our soldiers in the face.

Posted by nicksantorro | 1 day ago
Also to defend Subway its business not personal, if a person doesnt pay the Mortgage it gets forclosed on, right, regardless of who you are,,, im sure Subway gave this man alot of chances… just because he is a GI doenst mean he has the upper hand. He won this through a loop hole deal and Subway just said its too expensive to continue with the legal process, this way there is no bad publicity on Subway,

Posted by nicksantorro | 1 day ago
i understand all of the comments everyone has thier own opinion,,, but there is no reason why the rent couldnt be paid when a restarant is in business, sounds ot me that the Soldier was pocketing the money and knowing he is protected by the Servicemembers Civil Relief Act, and getting away with it, either way He is respected as a soldier to defend our country, but as a Dallas Business man NOT AT ALL..

Posted by Shorebreak | 1 day ago
How ironic that Subway has some of it's restaurants located on military installations.

Posted by tim_lebsack | 1 day ago
According to the majority of the comments, Subway is evil - like the Eagles when they play the Cowboys - and we admire the Cowboys, dream of being a Cowboy, but don't dare get on the field to play - like very few of us are willing to fight in a battle.

Posted by mcb9147 | 1 day ago
I will still eat there. I support the troops, but I like me some turkey samiches.

Posted by Wishing Dallas had a better paper | 1 day ago
I had always thought of Subway as a good company, but this issue and another experience I recently had have made me wonder. I was at the Subway at Mockingbird and Abrams and a customer walked in with a homeless guy, planning to buy a sandwich for the guy. The manager walked up and started berating the homeless guy in front of everyone in the store, saying he needed to stop asking people to buy food for him. He embarrassed the guy and we were all embarrassed to have been present for that scene. I didn't buy a sandwich that day and haven't been back again.

Posted by coleman | 1 day ago
you can bet i wont eat at subway anymore

Posted by panashville | 1 day ago
Congrats to the soldier…… when i read about how he had been treated by Sybway, I swore them off my list of places to eat forever. SHAME ON THEM !!!!! Whatever the settlement amount was isn't nearly enuff for he deserves. He puts his life on the line so places like Subway can exist. GOD BLESS OUR SOLDIERS

Posted by mesquite70 | 1 day ago
pretty sure those stores are closed now Louis.

Posted by Louis_legrand | 1 day ago
I don't eat a Subway, but what stores were his so that I can spread the word to people who do eat at Subway and should avoid these particular stores.

Posted by Yankee69 | 1 day ago
Should we expect anything less from the greedy corporations?

Posted by Homo Fruiticus | 1 day ago
Clearly Subway has massive fault in this mess, along with the brother who wouldn't be competent enough to run a roadside lemonade stand. But Subway doubly screwed up trying to hose to Batie Jr. while he was deployed and unable/unavailable to work through the courts to resolve the issues.

Subway got the public relations black eye they deserved but the real lesson I hope they learned is that their bread tastes like spongy styrofoam and they need to go to The Great Outdoors sandwich shop or Jimmy Johns to learn how to make REAL bread.

Posted by NoCritic | 1 day ago
I'm glad that Lt. Col. Batie is satisfied… although I wish he'd been able to keep his Grand Avenue store. I have been boycotting Subway since this story first broke… and I know there are some like xy258 that may not agree, but if I want a sandwich I'd just as soon go to the Deep Ellum Deli than visit the Deep Ellum Subway or any other Subway ever again. I hope the News will keep readers informed of any future endeavors Lt. Col. Batie may be involved in… may God bless him and the rest of our armed forces and keep them safe!

Posted by wiseguy43 | 1 day ago
Publish his brothers name so we can boycott his brother and his terriable family values. What type person agrees to take care of a business then runs it into the ground so quickly. Check the brothers background, I'm sure he needs help with mulitiple issues. Don't blame subway for want their payments, they were out the setup costs, i.e. location, equipment, supplies, etc. It is america and you need to pay your own way, Subway is not at fault here, maybe their style, but not their reasons. The brother is 100% at fault!

Posted by JeffA | 1 day ago
Facebook and Twitter are great ways to get the boycott message out. Subway needs to be removed from ever military installation worldwide, and folks need to show solidarity with the troops by staying away from Subway.

Posted by Tech | 1 day ago
I always loved the fact that Subway is owned by Doctor's Associates, Inc.

SUBWAY is a registered trademark of Doctor's Associates Inc.

Posted by Apollo101 | 1 day ago
Its was good thing they could come to an agreement , after all he was going over seas to fight for the U,S. not Subway???

Posted by tdn | 1 day ago
I personally don't like Subway. It is very sad when we have someone fighting for our country and to be booted out is WRONG!!!! I hope he got a good settlement. Subway has enought money I'm sure

Posted by xy258 | 1 day ago
I agree that what the Subway Corporation did was unethical and should be punished, but please don't stop eating at Subway restaurants. They are all owned by individual franchisees like Lt. Col. Batie and boycotting Subway only hurts them. It does not hurt the main corporation.

Posted by PJLand | 1 day ago
if his brother didn't pay the rent…the error falls to him…can't think of a reason why a Subway couldn't pay the rent…well other than the brother just didn't care enough about his brother to protect his assets!

Posted by RHINO Texas | 1 day ago
Good Morning, I will never understnad why people keeep shooting themself's in the foot.

He is off getting shot at and your stealing his stuff ? Well here's a news flash for you. I will never visit subway again, you can give food away free I still will not darken your door. Happy Now ?

Posted by Jenmisstx | 1 day ago
I too have boycotted Subway!

Posted by mongoose1020 | 1 day ago
So long Subway. barring unforseen circumstances, I'm done with you. As a citizen and a veteran, I find your actions reprehensible, and when I called HQ for your side, you were as non communicative as was humanly possible. I hope this bad PR which you brought on yourself, helps every one of your competitors at your expense.
Sub human, you're not my sandwich store any more.
Someone put their life on the line to protect yours and you insider him out? Shame on you as a corporation and individually for those that perpetrated this heinous behavior. You rise to the level of a colon orifice .

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