QUIZNOS OVERVIEW & DISCUSSION

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• Food BusinessNew”-September 2, 2008-
  ”Quiznos….has unveiled plans to expand its international operations. …..Quiznos said it has signed development deals to add restaurants in the United Arab Emirates, Saudi Arabia, Eastern Europe and Domiican Repulic.
  The announcement comes just a few weeks after Quiznos signed a 10 year deal to develop 100 restaurants in India and a 10 year deal to develop 175 units in Brazil……They are also in talks with Singapore, China and Ecuador.
  In total the company plans to open at least 500 international restaurants over the first 2 years….
  “Quiznos intends to significally increase its interantional efforts and expects to achieve continued growth and exansion into new markets around the globe”, David Deno, CEO and Pres.

  Greg Brenneman has been named executive chairman of the board”

• One thousand Quiznos franchisees either closed their stores or sold them for pennies on the dollar over the past 365 day. The reasons are simple:
  1. The food costs are the highest in the QSR industry. Expect 35% food costs - 10% higher than Subway and other competitors.
  2. Outrageous paper costs at 2.5% about 1% higher than the competition
  3. The franchise and ad fees kick in another 12%.
  4. Mandatory pricing that keeps Q's pricing artificially low.
  5. Poor food quality - the meatballs are made of pork parts and pressure washed chicken pieces, not ground beef or anything approaching it.
  6. Heavy handed tactics against franchisees. Make changes to make money and see how Q lawyers up.
  7. Uninspired "chef inspired" recipes. The "event" this month is the meatball sub at $2.99. Referred to on other posts as the slimeball sandwich, this offering is as uninspired as it gets. Pulled several months ago because of poor sales and sitting at 35% food cost think about how many you need to sell at $2.99 to make a PROFIT.
  8. A Rudderless Business Plan. With higher costs and a reputation as a premium sandwich shop the current group of "turn-around specialists" decides to take on Subway on price. How has that worked out? 1000 franchisees left out in the cold.

  How can you make money as a Quiznos' franchisee? You can't unless you're a q owned store that simplfies the menu, ignores the "mandatory" pricing, and doesn't have to worry about Q opening two other stores in a five mile radius. Quiznos sucks.

• The Q already has experience with overseas expansion. Its attempts to open stores in Australia a couple of years ago was an unmitigated disaster, with franchisees suing Quiznos and forcing the Q scum to settle because of the same questionable business practices the company uses here. What makes anyone think that the results of this new effort will be any different? The leopard hasn't changed its spots.

• Read the latest concerning the lawsuit filed by the TSFA going to the address below:
  http://www.bluemaumau.org/6154/franchisees_strengthen_charges_against_quiznos_deceptive_business_practices#comment-68969

  You'll find that with Q Corporate Lawyer "Tricky Dick" Emmett it's always about the letter of the law, never the spirit and never the results of your actions. We'll see in the coming days whether a judge will side with those wronged by the Schadens, Emmett, and the rest of the Qscum or whether money can buy justice.

  As for Quiznos, if you google "Quiznos Problems" you'll find a list of thousands of stories and posts on Blue Mau Mau and other sites that outline the many, many problems with Quiznos and the broken lives of former franchisees, forced into bankruptcy or selling their restaurants for pennies on the dollar. One franchisee committed suicide and his story is out there for those who want to read all about it. Is that the kind of company you want to partner with?

  Many of the new Q franchisees never bother to google, others google, read the Q's Ricky Horror Picture Show and decide incest really is best. I have no sympathy for you

• The latest Quiznos event is the small Prime Rib sandwich on Parmesan Bread for 3.99. Another loser for franchisees; a sandwich that has a food cost at 50% + and of course no drop in the cost of the Prime Rib or bread from Quiznos. How about delivering this loser with Q's mandatory $8.00 minimum and the only question for franchisees is how to limit the damage. CEO David Dino lies when he says he's concerned about anyone's profitability except corporate's.

• The world's fastest contracting QSR announced on Friday a 20% layoff. The philosophy of The Dicks, David Dino, and the rest is to squeeze franchisees to pad the corporate bottom line. It's an effective short-term strategy. In the long-term, however, it's a double whammy on the system. Many current franchisees can't survive and close while the word is now out so the stream of suckers that seemed never ending has dried up.

  The evidence of just what kind of trouble Quiznos is in? The Q also closed its training school - Quiznos University. Guess you don't need a "training school" when you have no one to train, eh?

• 50 Southern California Quiznos have banned together to tell Quiznos to stick its mandatory 5-7-9 pricing policy where the sun doesn't shine. Why? Because franchisees don't make a PROFIT when they're giving food away. Quiznos has responded by threatening the stores with expulsion from the system but the store owners are holding firm. Hopefully other stores will join these 50 to stop the madness.

• As a Sub shop franchise business broker, I am disturbed by the current events related to Quizno's franchisees who close their stores. I am not judging their economic decision to sell, but merely commenting on a lack of business foresight in two particular cases. Both franchisees had their stores listed and there were very few offers or interested parties; yet when each store had an offer, granted somewhat below asking prices, the owners chose to close the stores rather than sell for 50 cents on the dollar. So zero dollars is better than say $60,000? and you are still on the lease.......can someone explain this logic?

• Well as a owner in NYC.. it really doesnt help that our rents are higher than most and that we get no support of any from corp. as if we were doing average tickets anywhere from $7-$8 now its somewhere near the 6 dollar mark. sales are down transaction counts are down.. food is still expensive.. and CEO voice mail just drives me up the wall.... never compare ourselves to subways but again.. we are competing with the $5 sandwiches with more meat and no profit...
  i know that the economy is hit hard and everyone is feeling the squeeze i wish there was any realistic answer or goal that quiznos can come up with.. other than selling a $8 prime rib for $4... scream for help is ignored.. bottom line there will be few less quiznos that customers will be able to visit in the nyc area.... this really sucks and .... at the end i'll be as broke just like everyone else that got involved with quiznos..

• Quizno's may have a better chance to succeed and be profitable overseas than in USA for several reasons
  1. It will be perceived as a new US franchise entering the host country, therefore it must be good because it is "big" in USA
  2. Profits may be higher because many countries have lower labour costs, making up the deficiency in food cost margins if they continue their pricing policy in the new markets
  3. The newer tastes offered by Quizno's will always have a novelty appeal
  4. It will stand out as another choice in a field of few competitors; it is not hard to be ranked #2 in a field of only 12 !!