Report: Quiznos Is Preparing To File For Bankruptcy

Is it time you start saying goodbye to your [insert favorite toasted Quiznos sandwich here]? Not quite, but the sandwich chain is reportedly readying itself to file for bankruptcy-court protection in the next few weeks, under the strain of complaining franchisees and a $570 million debt load.

The Wall Street Journal cites insiders who say Quiznos has been wheeling and dealing with creditors for weeks to work on a restructuring plan to ensure a smooth cruise through bankruptcy court, but negotiations haven’t resulted in a deal just yet.

Even with a Chapter 11 filing to help Quiznos, the company will have to also work on its apparently testy relationship with many franchisees who say they just can’t compete with other businesses because it’s so expensive to run a Quiznos. And if your franchise locations aren’t thriving, that means the entire brand suffers.

Franchisees not only have to pay fees to the company to use the name Quiznos, but operators also have to buy most of their supplies and ingredients from Quiznos’ distribution business. Many franchisees complained that that business is overcharging them for what they could get cheaper elsewhere.

One franchisee said he spent about $350,000 to open a Quiznos franchise in 2005, but quickly realized that the business wouldn’t make enough money to cover expenses, and ended up selling the franchise for half what he paid for it. That was less than a year from when he bought it.

He says his annual sales would’ve come in around $600,000, but when he was losing $3,000 to $5,000 a month, it wasn’t worth it.

“It sounds like we were doing a lot [of business] but there was actually no profit because of food costs and labor,” he said.

Quiznos Moves Toward Bankruptcy Filing [Wall Street Journal]

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  1. oomingmak says:

    I haven’t eaten at a Quizno’s in years but I remember years ago seeing them repeatedly topping the lists of worst franchises to own. Frankly, I’m surprised it has taken this long.

  2. Saber says:

    …huh. Well that would explain why all the stores nearby just suddenly up and closed the past few months. Interesting.

    • Smuj says:

      Same with around here. I’m not even sure there’s one close by anymore. Quizno’s was just too pricey compared to Subway/Jimmy John’s/Potbelly. And their subs always tasted burnt and weren’t worth the price.

  3. CommonC3nts says:

    I used to go to one every couple of days for lunch, but it closed down last august.
    The only reason Quizznos is not successful is because the franchisor/parent company is ran by morons who constantly waste money then expect the franchises to pay for their wasteful spending.
    They charge double the price for equipment and food and the franchisees are stuck overpaying and then going out of business.
    Every franchise can get the same ingredients from their local restaurant supply store for half the price charged by crazy quizno’s parent company.

    Their new market strategy of higher prices was also really stupid: http://www.denverpost.com/ci_21025259/quiznos-recovery-new-marketing-strategy

  4. FusioptimaSX says:

    Meh. These sub shops are a dime a dozen and the ones that have the best are usually local joints….or Publix.

  5. DaddyBee says:

    I just started liking Quiznos over Subway for a fast sandwich – so of course they’re gonna close now, lol.

    The sandwich I get from Quiznos is more expensive than the basically similar one I get from Subway – regular sized turkey sub, no extras…Quiznos is $2 more. But I found I like theirs better, so I go there now. I guess I needed to stop this new trend anyway.