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Quiznos Flaunts New Management, but Store Owners Fight to Survive

Quiznos flagship store in downtown Denver; photo/js

DENVER – While Quiznos relishes its newly appointed management team, franchisees question if owner Avenue Capital Group really understands what direction their hedge fund is headed. Store closures are continuing at an alarming raate, and executive decisions so far have failed to stop the financial bleeding of store owners.

Chief executive officer Stuart Mathis announced Monday that two new members have been added to Quiznos’ executive team. John Coletta was appointed as the company’s chief financial officer and James Lyons as its chief operating officer.  Mathis said both men have extensive experience managing franchise-based operations.

Coletta was most recently served as global chief financial officer and president of Cartridge World, a 1,600 unit, 60 country franchise operation. Previously, he had been an executive with Rock Bottom Restaurants for 10 years, operating and franchising the Old Chicago, ChopHouse and Rock Bottom Brewery Brands in 30 states.

Lyons most recently served as COO and chief development officer for Del Taco in Lake Forest, California. Prior to that, he was chief operating officer at Popeyes, and also held senior management positions at Denny’s, Domino’s and Burger King.

Mathis, who came in as the sub-sandwich company’s chief executive officer in July, said, “Quiznos remains focused on continuing to deliver the best sandwiches while providing franchisees the resources to enable steady sales growth and margin expansion at their locations.”

The incoming COO expressed the same sentiment in a memo to franchisees when he first arrived at Quiznos on October 8. Lyons said he was thrilled to be part of the Quiznos family. “I share Stuart’s vision. By developing a sound strategy, working hard together with our franchise owners, keeping a laser focus on our customers AND the success of our franchise owners, we can look forward to seeing Quiznos best days ahead of us.” Lyons said those two priorities were coequal. He added, “I also believe that Stuart is putting a strong team together that share the same commitment to our customers and franchisees as Stuart and I do.”

Coletta agrees. "I am passionate about working with franchisees and look forward to working with our network to affect significant change that drives personal success for every Quiznos franchise owner," the chief financial officer recently stated.

Susan Lintonsmith, chief marketing officer chimed in stating, “This is a very exciting time at Quiznos. This is a fantastic brand with great products and I’m impressed by the forward momentum and the dedication to growing the business.  I’m honored to be a part of this great brand and team.”

While Quiznos engages in its lovefest with newly appointed staff members, no word has officially come from their franchisee community.

Recently, some have expressed that the last few months have been the worst since they have been associated with the sub sandwich chain. One said same store sales throughout the country have been down over 16 percent from last year. “And that is on top of ten straight years of declining sales,” he chided.

One store owner who did not want to be identified said, “We are clueless as to where this  company is headed.  The Quiznos Franchisee Association (QZFA) website has been down for a couple weeks now. Mike Roper, the former COO, was let go or forced out. Same store sales continue to plummet over last year.”

While some store owners and the QZFA group were hopeful that things would change for the better after Avenue Capital acquired Quiznos, one franchisee said that hasn’t happened. He expressed, “From where I stand, Avenue Capital doesn't seem to have the answers on what to do.  It's still a mess.”

Quiznos at one time operated 5,000 locations in the U.S. Today, some franchisees estimate they are  approximately 1,600 stores remaining.

Keith Rentschler, president of the Quiznos Franchisee Association or QZFA, said his group is happy with the new people coming in. “The management team now in place is significantly better. They are a breath of fresh air for us in dealing with the company. I wish they had been in place years ago,” Rentschler said. But he adds that sales are still a major challenge. “Trying to turn around a challenged brand is an extremely difficult equation.” 

The association head said they are continuing to concentrate their dialogue on the macro business issues and although top line sales is a major issue that needs to continually be addressed and improved, the overall business model is just as important. “A lot of franchise owners, when they were doing 20 to 30 percent more in top line sales than they are today, were not making money at that time either. That’s why we continue to concentrate on top line sales but also on the overall business model,” he explained.

Regarding the QZFA website being down the last couple weeks, Rentschler said that was only a technical problem. They are creating a new more user-friendly website which is still under construction. “We don’t have a lot of funding and we have limited time to spend on it. We probably haven’t kept franchisees updated as we should on why the site has been down. I will now make sure we do that.”


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Lyons Memo to Franchisees.pdf80 KB
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