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After repeatedly denying it had received any complaints about celebrity pitchman Jared Fogle requesting sex with children while promoting its brand, Subway and its Franchisee Advertising Fund are now facing a lawsuit filed on behalf of Jared's former wife and children. The complaint alleges that the multi-billion-dollar chain knew about his depravities for over a decade but failed to take proper action.
Jared Fogle was first discovered by Subway in 2000, when a restaurant manager informed the franchisor that his college-student customer was successfully losing weight by only eating Subway sandwiches. The company immediately seized the opportunity to make Jared its official national advertising spokesman, a cash cow in growing the sub-sandwich chain to new heights. Subway, under parent company Doctor Associates Inc., eventually increased U.S. sales under Jared's tenure from $3.1 billion to $11.5 billion, growing its locations to more than 38,000 stores in 100 countries. Subway touted that was more nationally and globally than McDonald's Corporation.
The lawsuit, filed yesterday in Hamilton Superior Court, Indiana, on behalf of Kathleen "Katie" McLaughlin and Jared's two children by her, claims that Subway was notified at least three times about Jared's "sexual interest in and activity with children," but continued to capitalize on his fame to drive company sales. The complaint states that Subway even launched multiple campaigns that required Jared to visit elementary schools around the country, including Indiana where Jared and his family lived. One, "Jared's School Tour," was launched in 2004 as a childhood obesity prevention initiative, requiring the star promoter to visit elementary schools throughout the United States. Another, "Tour de Pants," had Jared traveling the country wearing the pants he once wore when he weighed 425 pounds.
Subway's chief marketing officer stated in 2013 that "one-third to one-half of Subway's growth was directly attributable to Jared."
The suit further asserts, "Just months before Jared was arrested and charged with child pornography and sex with minors, Subway signed Jared to a two-year extension of his previous five-year contract with Subway to continue as its spokesman in January 2015."
Business Insider yesterday quoted McLaughlin saying, "Finding out that your husband and the father of your children is a child predator, and knowing that his job involved him visiting schools on a regular basis is devastating." Jared's former wife said she filed the lawsuit to get answers from Subway regarding its knowledge of her husband's sexual attraction to children. A Subway spokesman responded only by stating, "As this is pending legal action, we cannot provide comment."
Subway's pitchman's fall from grace
FBI agents arrested Jared Fogle on July 7, 2015, in connection with the agency's child pornography investigation after raiding his affluent home in Indiana. Federal authorities removed documents, computers and DVDs, taking them out to a large mobile forensics lab parked in Fogle's driveway. His two young children were at home at the time.
Jared's attorney, Ron Elberger, told a CBS reporter he was not aware of the investigation, but said he believed the raid was connected with the April arrest of his Jared Foundation director, Russell Taylor, on charges of possession of child pornography, photos taken secretly at his home. The day of Fogle's arrest, a Subway spokesperson issued a statement on Twitter regarding the allegations saying, "Subway and Jared Fogle have mutually agreed to suspend their relationship due to the current investigation." Subway immediately removed pages from its website that referenced "Jared" in advertising.
The day of his arrest, Mother Jones reported that in 2007 Fogle was accused of running a porn industry rental service from his dorm room when he was attending college. Subway dismissed those allegations, saying they had "no knowledge" of the report.
Russell Taylor, 44-years-old, was sentenced to 27 years in federal prison for producing child pornography that resulted in a criminal case against Fogle, his family watching as he begged for leniency at the hearing on December 10, 2015. Taylor cried, "I've been falling asleep in a puddle of tears every night . . . crying out to God."
Jared Fogle was luckier in sentencing for charges against him, those regarding possession and distribution of child pornography and commercial sex acts with a minor. The judge announced November 11, 2015, that he would remain behind bars in federal prison for 15 years and 8 months, and upon his release, he would endure a lifetime of supervision. Fogle was then 37 years old. In court, Fogle sobbed, "Not a day will go by when I don't think about what I did to (the victims). Members of my family are also victims of my acts," noting that his wife will be a single mother. He then continued reading from a written statement, "I so regret that I let so many of you down." The disgraced celebrity had confessed to a psychiatrist and psychologist that he had spent $12,000 a year on prostitutes. One witness told details of Fogle's "fantasies about pre-pubertal children."
Complaints submitted to Subway resulted in little action
The legal action describes three complaints that were made to Subway's corporate office regarding Fogle's sexual interests and activity with children during his tenure as a company marketing pitchman. With two of those reports, Subway responded by sending a public relations employee to "ask Jared about the allegations." With the third report, Subway admitted the complaint was "not properly escalated or acted upon."
In 2004 Subway's senior VP of marketing was told that Jared had approached a young girl at a promotional event for a Las Vegas franchise for a sex act. Other than sending a public relations employee to ask Fogle and the franchisee about the incident, no other action was taken. The second complaint was in 2008 when Cindy Mills, a Florida franchisee at that time, notified Jeff Moody, then-CEO of the Subway Franchisee Advertising Fund Trust, by phone that Jared had made disturbing comments about children, saying "he really liked them young," and that he had sex with minors from ages 9 to 16. She said he had also suggested "Mills prostitute herself." CEO Moody's response was, "Please don't tell me any more." He then told her not to worry, Jared had met someone, "a teacher and he seems to love her very much, and we think she will keep him grounded." Mills also said the CEO related that he had dealt with similar complaints in the past. Again, Subway only asked Fogle about the complaint, which he denied.
The third complaint which also concerned Jared's actions around children came from a Florida journalist, Rochelle Herman-Walrond, in 2011 through Subway's website. Subway admitted that one was not properly escalated or acted upon. The reporter, who was working with the FBI to record conversations with Jared, publicly indicated he made comments to her about his "desire to perform illegal sexual acts with children." She told that Jared then asked her "for help in getting him access to children."
The lawsuit states, "Subway failed every test of corporate responsibility in its response to each of these complaints."
Former wife claims intentional infliction, emotional stress on her and children
Kathleen McLaughlin claims in the lawsuit that her ex-husband's weight-loss story was "getting stale" by early 2015, so Subway began promoting Jared's family as a marketing opportunity. The franchise company began airing a commercial that depicted animated versions of Jared's family, including his wife and children. She states that she is now suing Subway, alleging that it depicted her in the ad without her consent. McLaughlin accuses Subway of negligence and intentional infliction of emotional distress. She states that the franchisor's "ambition for sales and growth came at the expense" of her and her children.
McLaughlin married Fogle in 2010 and finalized their divorce on November 16, 2015, four days prior to the sentencing of husband Jared Fogle. News reports state that she received $7 million as part of her settlement and she now has sole legal and physical custody of their two children, ages four and two.
Through her attorneys, Church Church Hittle & Antrim, McLaughlin is bringing five counts against Doctor's Associates Inc. d/b/a Subway Franchise World Headquarters and Subway Franchisee Advertising Fund Trust. They include invasion of privacy – misappropriation of likeness, negligence and intentional infliction of emotional distress. They are asking for an award for damages suffered as a result of Subway's violation of Indiana statute, including statutory and treble damages, attorney fees, and pre- and post-judgment interest.
Jared Fogle is incarcerated at the Federal Correctional Institution, Englewood, Colorado.