Two Bend Subway locations suddenly close amid franchisee woes, among 23 in Oregon, SW Washington

Workers waiting for last paycheck; owner says bank account was hacked

GLADSTONE Ore. (KPTV/KTVZ) - They were working, until suddenly, they weren’t.

Over 200 employees across 23 different Subway locations from Vancouver to Bend were left without jobs last week when they learned their restaurants were being shut down unexpectedly, KPTV reports.

One of those locations sits off of SE McLoughlin Boulevard in Gladstone, where a sign on the door reads ‘This location is temporarily closed. Stay healthy and see you soon!’

Joanne Kennedy managed that location, as well as another off of the same road in Oregon City. She said that sign is about as much information as she received when they closed.

“No warning, no heads up, no transparency, completely and totally blindsided, every one of us,” Kennedy told FOX 12 on Friday.

She said things started to go downhill a few weeks ago, when she started noticing that the food orders she was placing were not arriving.

“There was no communication, there was just ‘keep doing your job, business as usual,’ that’s what I was told, business as usual, they’re looking for a resolution for the food order,” Kennedy said. “We were all trading food in between stores trying to keep everyone’s doors open, and then no food came.”

Crystal Eang managed the Cascade Station location, and also acted as District Manager. She said her store’s food orders also started getting declined, until things came to a head last week.

“Monday rolled around it was like you guys are not getting paid, we don’t have the money to pay you,” Eang said.

All of the locations that shut down were franchised by CapTen Enterprises and Subfecta LLC.

A visit to Subway's website finds that two of four Bend-area locations are among the current closures -- one on North Highway 97 and another on NE Bellevue Drive. (A Google search finds the term "temporarily closed" used instead.) A phone call to the North Highway 97 location brings a response that the number is currently suspended; there's no answer at the northeast Bend location.

Two other Bend-area Subways, at Riverwoods Country Store on Baker Road and at Pioneer Crossing on South Highway 97, remain open, the online listings show.

Owner Ann Bell spoke with FOX 12 over the phone, saying that it all started when her bank account was hacked and she lost all of the money in that bank account. As the loss was fraud, it was not covered by the FDIC.

“It’s a difficult time for our restaurants right now, margins are thin, inflation is high and we are not able to recover,” Bell said.

She said she was unable to pay their food supplier, U.S. Foods, and they cut off services to her restaurants. She said since Subway’s ownership was under transition at the time, she was unable to get the support she needed to continue keeping the restaurants alive.

Bell said at that point, she was put in the difficult position to close down.

“I do understand people’s frustration, I totally get that,” she said. “The timing couldn’t have been worse.”

She said she has been working with the Bureau of Labor and Industries (BOLI) to get her employees their final paychecks, and she intends for everyone to be paid what they are owed.

Kennedy and Eang both told FOX 12 that they had reached out to the owners for answers, and while they were connected to the BOLI process, they were told it could take up to 100 days to process.

“I’ve got a car payment coming up, I’ve got insurance, I got cell phone bills,” Kennedy said. “I live paycheck to paycheck supporting my kids, I don’t know where I’m going to get grocery money now.”

“Now I’m struggling, where am I going to get the money to pay my bills, pay for my groceries?” Eang said.

Kennedy has found another job in the meantime, and Eang is hoping for unemployment benefits until she can decide next steps, but they’re still recovering from the shock of having their long-time careers ripped away without any idea why it happened.

“I’ve cried for over a week and a half,” Eang said. “You put so much trust in somebody who says they’re going to take care of you and it’s going to be okay and you’re going to be fine, and it’s the trust that’s broken, and it shatters you.”

“Why let us all work for over two weeks knowing that we weren’t going to get paid?” Kennedy added. “I feel taken advantage of.”

FOX 12 reached out to the Subway corporation, and a spokesperson provided the following comment:

“Our priority is to ensure guests can continue enjoying freshly made, high-quality, delicious food by identifying experienced operators within our system who can quickly take ownership and re-open the restaurants.”

Bell said that Subway will find new owners for the franchises that are closed, and they will reopen again at some point with opportunities for former staff members to return.