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FRANCHISING | Staff Reporter, Australia
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Subway under investigation over underpayment of employees: report

The sandwich chain stressed that franchisees are required to meet regulatory, financial, workplace and employment requirements.

Subway said it could terminate agreements with franchisees who do not pay staff properly, following reports that the sandwich chain is being investigated by the Fair Work Ombudsman over underpayment of local employees.

"The Fair Work Ombudsman’s investigation in relation to the Subway chain is ongoing, and it is therefore not appropriate to provide further comment at this time," a FWO spokesperson told The Age and Sydney Morning Herald.

Fairfax media outlets previously revealed that Subway is closing stores due to falling revenue whilst facing backlash from some franchisees forced to pay costly renovations.

The sandwich chain stressed that franchisees are required to meet regulatory, financial, workplace and employment requirements.

"Employee claims made in coverage today have not been previously reported to Subway for investigation. Subway takes these matters very seriously and Franchise Owners are expected to meet all regulatory, financial reporting, workplace and employment requirements. Non-compliance is unacceptable and can lead to termination of an owner’s Franchise Agreement," a Subway spokesperson said in a statement sent to QSR Media.

"Franchise owners are required to conduct quarterly audits of their employment records and Subway conducts both proactive and responsive reviews of employment records. Subway also provides employment support services to franchise owners to help them meet their obligations and has a dedicated employee hotline," the statement added.

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