SUBWAY FOOD TRADE SECRETS & THE $35M EXTORTION PLOT

Subway stoush.

Subway stoush. Photo:

A disgruntled Subway franchisee who published the fast-food chain’s secret recipes on the internet as part of an alleged $35 million blackmail plot has escaped criminal charges and a potentially massive compensation bill.

The global sandwich giant had accused Melbourne man Arun Singhal of using insider knowledge obtained as Subway’s Oakleigh franchisee to wage an online “campaign” to destroy the company’s reputation and commercial viability for his own profit.

In August, the Supreme Court of Victoria found Mr Singhal had created the website “Faith Killer Subway” and a series of videos designed to publicly expose Subway’s trade secrets.

Subway alleged in court documents that the 31-year-old sent an email to Subway’s US headquarters demanding $35 million in exchange for his continued “silence”.

Failure to pay would see the company’s proprietary information – known internally as “the System” – published on the internet and distributed to media organisations. Subway claimed some confidential information had already been sent to American newspaper USA Today.

The threat was allegedly made after Subway cancelled Mr Singhal’s franchise agreement following a dispute over how the Oakleigh store was being operated.

The plot came to public attention last May when Subway received an emergency restraining order against Mr Singhal in the Supreme Court. Plans were also made to refer the matter to police.

But despite the ban the “Faith Killer Subway” website apparently went live and an anonymous user began posting the videos to YouTube several months later.

Mr Singhal has repeatedly denied any responsibility, claiming he was framed by the “sandwich mafia” after raising concerns about the company’s operational and advertising methods.

“Here a family man lost $350,000 in Subways [sic] investment. I told the ‘Sandwich Mafia’ that if you don’t compensate me for the loss of business, I am going to media to tell everyone about my story,” he told The Sunday Age in August.

The Supreme Court subsequently found Mr Singhal was responsible for creating and releasing the materials, ordering that he pay damages to the company.

But Subway last week decided to drop its claim for compensation. Victoria Police has also confirmed that no formal complaint has been made against Mr Singhal for blackmail.

A spokesman for Subway said the company was “satisfied” with the outcome of the court proceedings.

“We were forced to take action against this former franchisee after he attempted to extort money from the company for his own gain.” he said. “That is unacceptable to the company and to the dedicated franchisees that are in their restaurants every day servicing customers and working to build their businesses.”

Mr Singhal declined to comment, except to confirm the case had been discontinued.

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Henry Sapiecha

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