Subway Franchise Applicant May Have to Arbitrate Race Bias Suit

A man who says his application to buy a Subway restaurant in Colorado was rejected because of his race may have to arbitrate his bias claim against the franchiser, the Second Circuit ruled Aug. 14.

Girum Alemayehu, an Ethiopian immigrant, received adequate consideration for promising, as part of Doctor’s Associates Inc.'s application, to take any disputes between the parties to arbitration rather than court, Judge Gerald E. Lynch said. That consideration was DAI’s actual review of his application to purchase the franchise from its existing owner, the appeals court said.

A “fundamental tenet” of contract law is that the mutual ...