Quiznos CEO Deno Resigns as Schaden Steps Back In

Posted Mon, 2009/02/23 - 21:11 by Janet Sparks

DENVER (Blue MauMau) – Quiznos Subs announced today that Dave Deno has resigned effective immediately from his position as CEO and Rick Schaden, the franchisor’s largest shareholder, is taking over the reins again as the chief executive. According to sources, Greg Brenneman made the announcement early this morning to franchisees and employees through a special voicemail message. He explained that Deno was leaving due to personal reasons, that his commute between Louisville and Quiznos’ Denver corporate offices became too difficult given the commitment required. Brenneman said that he would be staying on as the company’s executive chairman.

Dave Deno

A press release issued later said that the involvement of Greg Brenneman and Rick Schaden in these roles signals the personal commitment of Quiznos’ three large shareholders. It further stated,

“Rick’s amazing entrepreneurial skills were perfect for building Quiznos from the ground up and are ideal to grow the company in this tough economic environment,” said Greg Brenneman, Executive Chairman. “Rick was a franchise owner before buying and growing Quiznos. He has a detailed understanding of the brand. The marriage of Rick’s passion for the brand and new products, along with the world class management team we have brought in over the past two years, will enable us to maximize franchise owner profitability going forward. The Board would also like to thank Dave Deno for his service to the brand, both as a Board member and as CEO.”

Rick Schaden issed this statement:

“Quiznos is a great brand that has just begun to harvest its incredible growth potential in both US and international markets,” said Rick Schaden, Founder and CEO. “It is important that the investors directly spend their time and efforts with the company during these challenging economic times. Greg and I enjoy working together and will continue to do so in his role as Chairman of CCMP Capital Advisors and Executive Chairman of Quiznos.

“I am excited about working closely with franchise owners to improve restaurant operations. I also look forward to spending time with the outstanding Quiznos management team developing new products. Moving forward, our strategy will be exactly as it is today. Our primary focus will be on increasing restaurant profitability for our franchise owners by bringing value and convenience to consumers so that they frequent Quiznos more often.”

Schaden to Take on Numerous Challenges

Schaden. Photo/gov

The Quiznos system has been riddled with problems and litigation over the past seven years. According to some lawsuits, franchisees allege that the company has been engaged in illegal and deceptive business practices, inducing unwitting prospects to purchase and operate Quiznos stores. The documents state that with 4,636 franchises in the U.S. today, a number that is continuing to grow, Quiznos classifies the majority of its franchisees as financially distressed.

Last month it was reported in the Rocky Mountain News that the acceleration of the worst economic crisis in a generation had caused Quiznos to implement new strategies in advertising and pricing. Brenneman and Deno both stated they were working to mend relations with their franchisees and things were getting better every day. But some franchisees felt that lower prices were only further squeezing franchisees’ profits, and that Quiznos was struggling with its brand identity moving from one strategy to another.

Quiznos announced today another marketing plan. It will give away one million subs as part of its effort to offer better prices for a better world. Building off Quiznos' new lower price offerings, the million sub giveaway also rewards individuals who are doing their part to make the world a little better and encourages others to do the same. But franchisees feel it will not do anything to help them because the financial burden will be on them, not Quiznos.

Telephone calls to Quiznos and its media relations firm were not returned prior to publishing.

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56 Comments

Purchasing Cooperative by Guest

Submitted by Guest on Wed, 2009/03/04 - 03:12.

Has the Quizno's Franchisee Association ever considered engaging the services of a professional supply chain consulting and/or legal firm to determine whether or not they have any chance of forming a frachisee-owned and governed purchasing cooperative? Purchasing cooperatives for QSR and CDR operators have become wildly successful in foodservice land, primarily because a large number of franchisors previously used their purchasing and supply chain systems as significant profit centers on the backs of franchisees...without fully transparent and total disclosure. Their are a number of highly qualified consulting and legal firms that can assist in the formation of both purchasing and advertising cooperatives. Some will charge up front fees for their assessment, others are willing do upfront work in return for a portion of the savings derived from initiating a purchasing cooperative. Most are fully qualified to not only assist with supplier contracts, but also with distributor contracts, and they are knowledgeable enough, with significant contacts throughout the foodservice industry to find and expose tremendous cost savings opportunities for franchisees. Some of the most successful QSR's in the United States have very successful advertising and purchasing cooperatives, including Subway, Arby's, Burger King, Yum! Brands, DineEquity (IHOP & Applebee's), and others.

Canadian Quiznos Coop by michael webster

Submitted by michael webster on Wed, 2009/03/04 - 09:03.

Here is what happened in Canada, two years ago, when the Canadian Franchisees started to look at forming a purchasing co-op.

"In early 2006, over 100 Quizno’s franchisees joined a corporation called Denver Subs Canada Franchisee Association (hereinafter “Denver Subs”) which was established, according to KDL, to cooperate with Quizno’s to find a solution to the cost of goods issue. Talbot-Kelly took on the position of acting President of Denver Subs.

From Quizno’s perspective, Talbot-Kelly began acting against Quizno’s interests in breach of the Agreement after he took the position with Denver Subs Quizno’s says KDL is vicariously liable for the acts of Talbot-Kelly and on that basis was justified in terminating the Agreement in November 2006.

Thereafter, Quizno’s brought an action for damages against the KDL Defendants for breach of the terms of the Agreement and to assert its right to terminate the Agreement (hereinafter “the Action”). The KDL Defendants subsequently served Quizno’s Canada Restaurant Corporation, The Quizno’s Master LLC, Quiz-Can LLC and Greg MacDonald (hereinafter collectively “Quizno’s”) with a statement of defence and counterclaim, which it subsequently amended."

Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"

Quiznos Million Sub giveaway,misleading info from Qs on NRN by Guest

Submitted by Guest on Mon, 2009/03/02 - 10:40.

Feb 27 Nations Restaurant News article peddles that (1) Qs franchisees are independent businesses and can choose or not to participate in promotions (2) Quiznos is reibursing for the coupons. That doesn't sound right. Franchisees, please speak up. Don't let trade pubs like Nations Restaurant News be mouthpieces for corporate misinformation !

Quiznos Not reimbursing by Guest

Submitted by Guest on Mon, 2009/03/02 - 15:27.

Quiznos had a program to reimburse owners .75 cents for each coupons redeemed at the store. These coupons were part of the mass mailouts they did to newpapers over the past couple of months. (many Buy one Get one coupons) This was however before Quiznos announced the million sub giveaway. Quiznos will count the free sub coupons as part of that program. Now here is the important part of the equation. Most franchise owners collected in excess of the 700 coupon limit way before this program started. We are still eating the cost of the free sub promotion. Symantics is the game being played by corporate.

One Million Was The Starting Point by Guest

Submitted by Guest on Fri, 2009/02/27 - 23:32.

So just how many free subs did (p)Rick figure on giving away and how long did he plan on the promotion lasting? Quiznos EVP marketing and former call center manager Rebecca Steinfort told Marketing Daily on Monday that no specific cut-off date had been set and the promo would likely run as long as it was "bringing in new people." Now what does that sound like to you? I'd say it sounds like (p)Rick was using one million freebies as a starting point. The reason? He owns the company that sells franchisees the overpriced food, paper and supplies. HE OWNS IT. He wanted a big score at our expense. He's a weasel, even looks like one in the Blue Mau Mau pic. (p)Rick is an evil man and no amount of money, donations, or pr work can change that.

Schaden photo, reminder of high school by Guest

Submitted by Guest on Tue, 2009/03/03 - 00:31.

Actually, (p)Rick look likes those awful drugees that we ran into in high school...

It's Desperation Time For (p)Rick by Guest

Submitted by Guest on Fri, 2009/02/27 - 16:33.

Ok (p)Rick - you sounded pretty desperate in today's voice mail. You're not a saviour and I'm sure you've been lurking in the deep, dark, crevices of the Denver office much like The Phantom, spewing your hate and promoting the giveaways that have made you rich. Hell, Brennenman threw you under the bus when he was brought in to save the company. What's changed? You bragged about not taking a salary. That's funny. Who needs a salary when you're sucking us dry through AFD? You're a liar and worse (p)Rick but here's a few items that I can come up with off the top of my head that would prove you're serious. 1. Recognize the TSFA. 2. Close down AFD. That little profit center of yours is sucking us dry. 3. Give franchisees the right to form food and ad co-ops under the TSFA umbrella - COMPLETELY SEPARATE FROM YOU AND THE REST OF YOUR QTARDS. It should also have a final say in any promotions suggested by Quiznos corporate. 4. Give franchisees the right to buy produce or any products that are cheaper from suppliers outside the system. 5. Rehire Chef Jimmy. 6. Rewrite the franchisee agreement. Guaranteed 3 mile territories for every store, a population size minimum for new stores, and subsidies for those where you managed to squeeze in two or more in the three mile radius. 7. End the mandatory pricing policy. It's illegal and immoral. 8. Buy or open at least 100 Quiznos around the country and run them as company owned locations. Maybe with a little skin in the game you will have a better understanding of what franchisees face. A Qtard doesn't change it's spots. I don't believe you will make any significant changes. Instead I believe you'll go with the tried and true methods of intimidation and giveaways. But you've killed the golden goose (p)Rick. There's no one standing in line to buy a Quiznos and revenue is falling. I've lost a helluva lot of money and now it's your turn. You're about to crash and burn (p)Rick and I for one will sit back and enjoy the show.

Dear Mr. Schaden - From the Middle by Guest

Submitted by Guest on Fri, 2009/02/27 - 20:28.

I thought it was time that you heard from a franchisee in the middle. Although I don't think that you are the devil I also don't think that you have cared to much about your franchisee's. I suspect that you look at Subway and aspire to capture that kind of market with that kind of revenue. Subway did not get where they are today overnight. Although their franchise is not perfect and they have problems with their zees as well, they have earned the trust of their zees. They earned this by allowing them a food co-op. Although they do discount and coupon their zees they remain concerned with their profitability. You can't just say that you are concerned. You have to take action. To earn back the trust of your front line, your franchisees, concessions are necessary. Do I expect you to institute a buying co-op immediately? No. Right now this situation is too one sided. You appear to expect us to make all the sacrifices. I will only speak for myself when I tell you that I work a minimum of 60 hours a week. I work hard and love our brand. Quiznos Subs is a great concept and used to be a great product. At this point you must realize that the only way to mend fences with your zees is monetarily. There is something fundamentally wrong when you can get product cheaper at your local retailer. Mandatory pricing is a an issue for most of us as well. You must realize that different markets/cities have very different break evens. The damage done to ALL OF US in your recent venture "one million sub giveaway" will be very hard to overcome. Customers are now fully aware of problems between zor and zee. If they agree with you----they will not come back because the owner did not redeem coupon-----If they agree with owner-----how do they justify supporting what they may think of as a greedy zor? Bad bad bad for everyone. So what do we do? Continue to let you discount us into poverty? I understand those who have chosen not to accept coupons---how else do we tell you to stop? Did they hurt their own business? FOR SURE. So now what? The next step is yours. Earn our trust back. Value our opinion. Cut our food costs. I could make a list of wrongs but that will not help our current predicament. For both our sakes make some changes that will make a difference. Greed is not in vogue right now. Not Right, Not Left, Just in the Middle Franchisee

Rick isn't desperate by Barbara Jorgensen

Submitted by Barbara Jorgensen on Fri, 2009/02/27 - 17:53.

It is sad to read all your comments. Instead of giving millions to the University of Colorado and the homeless he should be helping his zees that are working for nothing and suffering. I cannot understand how he can hurt so many people. He just doesn't care. He has made his billions. He is a horrible man.

Caring for the homeless and needy... by Guest

Submitted by Guest on Mon, 2009/03/02 - 21:56.

Have you ever stopped to consider the homeless and needy the Quiznos executives help are quite likely former Quiznos franchisees and their families? Perhaps the Quiznos executives employ a means test before opening their hearts and their wallets. The current franchisees who still own their stores simply do not yet qualify for their program.

Here I Come To Save The Day by Guest

Submitted by Guest on Thu, 2009/02/26 - 15:56.

Hey Mighty Mouse, Reality check. You're the reason Quiznos is in the mess it is. If you're really serious about fixing Quiznos and helping franchisees you'll resign, donate your stock to a fund to help those current and former franchisees sucked dry by you and your merry band of qtards, commit yourself to celibacy, join a catholic monestary in the Italian Alps, and spend your days praying to God to save your sin ridden soul.

Very amuzing guest by Barbara Jorgensen

Submitted by Barbara Jorgensen on Sat, 2009/02/28 - 04:39.

People who purposely hurt other's do not care about their soul. They think like Sodom and Gomora. Drink and be merry for tomorrow you may die. They can only hope that there isn't a after life. Like the Aussie's say, " They will be in the poo." All they think is the deep pockets they have and no one can touch them. Didn't Hitler think that?

Q's (p)Rick Schaden SCREWS UP Promotion by Guest

Submitted by Guest on Thu, 2009/02/26 - 10:08.

Well (p)Rick's "million sub giveaway" promotion has bombed. The buzz on "consumer" sites is mainly focused on why Quiznos restaurants are modifying the free sub offer, or in thousands of restaurants, not taking them at all. These "free spending customers" are ticked off. So lets try and figure out why there's so much pushback on this promotion by franchisees and who is really to blame. 1. Quiznos aint Denny's. The Franchisees weren't consulted. they were told they were going to giveaway free subs with NO reimbursement. Sorry (p)Rick, you're not family. The object of our being in business isn't to make YOU rich. Paying your food distribution company full price to giveaway what we buy doesn't make US money. 2. This giveaway comes on the heels of several months of bogo's distributed by corporate Q with franchisee ad money. Franchisees aren't piggy banks for (p)Rick whenever he has a "good" idea to line his own pockets. 3. The Economy stinks. For consumers, yes, but also for franchisees. I haven't talked to any Q owner who has extra money to spend on giveaways. Franchisees are just trying to survive. 4. The Same Old Stale Product Offerings. Some chains giveaway new offerings, with franchisee reimbursements, to get people to try products and concepts. Not Quiznos. 5. No corporate support. Q corporate is a ghost town. (p)Rick has fired just about everyone. How can you support any kind of campaign when there's no one to answer the phones? So to recap. (p)Rick expects franchisees to buy food and supplies exclusively from HIS food distribution company at full price and GIVE the food away. This promotion comes on the heels of several months of BOGO's, paid for with franchisee advertising dollars, that gives away FREE food. The promotion is made in the midst of an economic mess not seen since Jimmy Carter. There is no new sandwich and hasn't been in the last year. What exactly is so new that customers who eat free will even come back? And finally, (p)Rick is running a promotion with no corporate personnel to support it. To be fair (p)Rick has had a lot of help. Many of the "Dream Team" members were around for much of the "planning", including David Dino, and the Ivy League whiz kid, Greg Brannanman, is still around. But (p)Rick is the driving force and has been all along. So (p)Rick - IT'S YOUR FAULT.

What About The Slime Ball Sandwich? by Guest

Submitted by Guest on Thu, 2009/02/26 - 12:14.

You forgot the slimeball sandwich - discontinued due to lack of sales and then brought back a few months ago as a new "event" when (p)Rick and Dino realized that they had thousands of cases of slimeballs that would go bad if they didn't find a way to get rid of them. By the way, they're called slimeballs for a reason. Pork, turkey, and whatever else pressure washed off the bone, turned into a gooey slime and then rolled into "meat" balls. And did the "dream team" reduce the price to these delicasies when they rolled them out? Au Contrare. High Quality? eh, no. An event? hahahahahahahaha. Quiznos Sucks

Schaden A LOSSSSSER by Guest

Submitted by Guest on Thu, 2009/02/26 - 10:56.

You forgot to mention the new "mandated" lower prices we had to do or "else". This BOZO rolls out the "make the world a better place" and he fires 100 employees the same day. Schaden, I would nominate you as my hero if you sold this company and let someone with common sense take over!

Re: Quiznos CEO Deno Resigns as Schaden Steps Back In by Guest

Submitted by Guest on Tue, 2009/02/24 - 21:21.

Hey Don: How about a "T-minus Quizno's Financial Collapse" countdown clock? You can also put up an over/under game where everyone can pick a square. I guess December 1, 2009. The prize could be a free $5 footlong every week for a year.

A Plea To David Deno by Guest

Submitted by Guest on Tue, 2009/02/24 - 12:10.

David, you have worked with Rick Schaden for the past few years and you have learned what kind of man Rick is. I'm sure you understand that you mean no more to Rick Schaden than the franchisees. You will be the one blamed by the Schadens for any wrongdoing or sleight of hand that at some point will be uncovered. David, please don't wait until that time to speak up. Don't wait for a subpoena to step forward. I'm personally asking you to look deep in your heart and do the right thing today. Work with the TSFA, the franchisees, and their lawyers to help right the wrongs that have ruined so many good, hardworking people. I believe you took this job with good intentions and a good heart and that you're a God fearing, righteous man. Please prove me right.

Wishful Thinking by Guest

Submitted by Guest on Tue, 2009/02/24 - 12:19.

Deno will not be able to comply. Most likely he has a gag clause. It also breaks the CEO etiquette of conduct to attack your successor or the board. Ain't going to be done. Wishful thinking.

Re: Wishful Thinking by Guest

Submitted by Guest on Tue, 2009/02/24 - 12:28.

That CEO etiquette you speak of.......is this the same book that the Wall Street CEO's and Banking CEO's abide by? They are all crooks. Deno will not talk, because he got a FAT bank account in the 7 short months he was on the job. There is a lot of hush money that Rick and Dick Schadden like to pass around. They even screw their own family members.

Re: Wishful Thinking by Guest

Submitted by Guest on Tue, 2009/02/24 - 16:58.

"That CEO etiquette you speak of.......is this the same book that the Wall Street CEO's and Banking CEO's abide by?" Yes. Unfortunately, it's the same damn book with the same damn rules.

I can think of a million or so reasons... by Guest

Submitted by Guest on Tue, 2009/02/24 - 21:24.

for this former employee to keep his mouth shut tight. And they all of pictures of dead presidents on them. Some might even be called "stock options attached to termination agreement clauses." Guessing - Hey, even Jesus had to make a living...

Re: Quiznos CEO Deno Resigns as Schaden Steps Back In by Guest

Submitted by Guest on Tue, 2009/02/24 - 11:47.

Deno quit because he could not take the fact that he did not know how to turn this company around. Maybe Quiznos could not afford to fuel the jet to get him back and forth anymore.

Lame Excuse by Guest

Submitted by Guest on Tue, 2009/02/24 - 11:20.

"Deno was leaving due to personal reasons, that his commute between Louisville and Quiznos’ Denver corporate offices became too difficult given the commitment required." This has to be the lamest excuse I have read on why a CEO leaves. Come on.

as somebody who lives in Denver. by Denver area resident.

Submitted by Denver area resident. on Fri, 2009/02/27 - 02:16.

i can tell you that the commute from Louisville to Denver is 30 minutes tops.

Tectonic shift by Willem Janszoon Blaeu

Submitted by Willem Janszoon Blaeu on Tue, 2009/02/24 - 13:34.

At the time Deno accepted the job, the distance between Louisville and Denver was shorter. Denver sits atop the Rockies, which were formed by tectonic shifts pushing up the earth. Those shifts are continuing on a slow but steady basis, and now Denver is further away from Louisville. Deno is neither a seismologist nor a cartographer, and could not have been reasonably expected to know that the commuting distance would change. Deno's explanation for his sudden departure is quite understandable.

Ha by Guest

Submitted by Guest on Tue, 2009/02/24 - 16:25.

Dear Tectonic Shift, Thanks for the best laugh I have had in a long time. As I own a Quiznos I don't laugh often. If we don't collectively say no and follow through when Q discounts us to death we will have no one to blame but ourselves.

What you are seeing now is probably end stage milking the by RichardSolomon

Submitted by RichardSolomon on Tue, 2009/02/24 - 14:18.

company dry as a prelude to filing bankruptcy. The Schadens have by now had lots of time for asset protection protocols to have been safely executed, so they are safe no matter what happens. All the current lawsuits - if I am correct in what I think I see - will be stayed and then transferred to the bankruptcy court. Victories will only make the winners unsecured creditors - figure about 3 cents on the dollar if anything - certainly more than the attorney fees. That will make all the franchisee cases worthless. Given an obviously venal and predatory franchisor, this is the perfect plan for stripping franchisees who won't get early on organized and militant, as well as those who more recently have become franchisees without competent due diligence. If this is true, I'm certainly happy that I don't represent any Quiznos franchisees.

Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

By the way. I just received an email from someone by RichardSolomon

Submitted by RichardSolomon on Fri, 2009/02/27 - 07:26.

who claims to know all about the realities of this situation. According to the email, I am way off base; a low down high smelling ambulance chaser who ought to be flogged with whips dipped in feces; and who is about to be exposed for the complete moron that I am by his posting it on BMM. Don't miss it!

Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

I have talked about this to our lawyers... by Rich Piotrowski

Submitted by Rich Piotrowski on Tue, 2009/02/24 - 16:20.

... and they have reassured me repeatedly that Colorado does have some decent laws in the area of wrongfully transferring money out of one LLC into another. I have also talked to a couple of lawyers that have done work on trusts that are designed to protect asserts and that have all told me that there aren't any that are 100% bulletproof. So in other words, if Schaden has the money hidden somewhere, you can get to it if you're good enough.

Schaden has burned too many people and I can tell you, I for one will not give up until we get our money. I will hunt down his hidden assets if need be, becoming my own private detective if I have to, but I will not let him walk away with money he owes us. If he wants to declare bankruptcy, let him, we will get whatever assets he owns one way or the other. He has no idea how determined I am to see him lose whatever assets he hid, wherever he hid them. I can travel to the Cayman's too.

Rich I hope you get your money by Barbara Jorgensen

Submitted by Barbara Jorgensen on Tue, 2009/02/24 - 22:07.

Don't give up because you deserve the money. All the hurt zees need to be taken care of. All the stories are consistant and plain mean that they can go out and fleece thousands of people. It may be catching up with them because of all the stories people are writing. There is no amount of money that will make up for all the suffering people have gone through. They are dealing with people's lives and they deserve much more than paying people money.

If you don't know exactly what he did; when he did it; how he by RichardSolomon

Submitted by RichardSolomon on Tue, 2009/02/24 - 16:28.

did it; and where he did it, your lawyer's opinions are worthless. Moreover, you would need also to know the financial condition in which he was left immediately after he did whatever it was that he did. If his doings did not make him insolvent in and of themselves, and he put it in the right place, even your finding it won't get you access to it. If you don't get better advice, you are just building yourself up for more frustration. It has nothing to do with putting anything into any trust. DUH!!!

Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

A better strategy to get Schaden's Quiznos money by Guest

Submitted by Guest on Thu, 2009/02/26 - 08:31.

If you win in court and he has been bust and successful in sheltering his money, you CAN try to turn off the money faucet. This guy will continue to try to sell franchises--that is what he does and where he gets his money. Why would he stop now? Who do you know that would want to pay money to someone and get a subpeona for their trouble?

Piotrowski not incompatible w/Solomon by Paul Steinberg

Submitted by Paul Steinberg on Tue, 2009/02/24 - 18:34.

Deja vu all over again. We spoke at some length about "fraudulent conveyance" and other such debtor-creditor law back in the days when Snowden and Morgan were riding high, and Dale Nabors was being annoyingly perky.

Yes, there are laws as Piotrowski points out. Yes, if the transfers did not render the transferor insolvent the law takes a "no harm, no foul" attitude, as Solomon points out. Yes, the substantive law is state law and as such you would also need to know what the law of the case is.

All of that is a bit beyond the scope of a general discussion, and beyond the scope of the facts known insofar as one wishes to have a Quiznos-specific discussion.

Offshore trusts are outside the jurisdiction of US courts. However, if an entity or natural person within the jurisdiction of US courts is pressured, the pragmatic result may be that the "untouchable" offshore asset suddenly gets touched real fast. As I recall, there was a case involving criminal fraud and a Cook Islands trust a few years back, and that is how the Judge taught the defendants who was boss.

Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400

Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400

I agree, Richard. A faster legal counter-attack... by Les Stewart

Submitted by Les Stewart on Tue, 2009/02/24 - 15:52.

...may have ended up at the same outcome. I have all the confidence that the franchisor bar would engineer a shrewder defense, even if franchisees in the future jumped over tall buildings. In the legal arena, franchisees are mutton' but false hope. Les Stewart MBA FranchiseFool: Understanding Franchising

Les Stewart MBA FranchiseFool :: WikidFranchise

Re: I agree, Richard. A faster legal counter-attack... by Guest

Submitted by Guest on Tue, 2009/02/24 - 16:34.

Call me idealistic, but any business that chooses to operate with a win-lose mentality is shooting itself in the foot. Luddite business practices are very expensive and easily trounced by more progressive companies. Companies that work together to ensure each partners' interests win. That's why monopolies are illegal - they work! BTW - I wonder if the new international stores are part of the potential bankruptcy or whether they are organized under a different company. If anyone knows please pass it along.

Predatory is absolutely win:win by Les Stewart

Submitted by Les Stewart on Tue, 2009/02/24 - 16:59.

Guest, 1. A franchisor executive is legally bound to protect his corporation's shareholders' interest. He or she decidedly has no obligations whatsoever to any other party (ie. franchisees). 2. In the short-term, predatory franchising yields a higher ROI. It is always cheaper (per $ of investment) to cheat rather than earn it. 3. Franchisors create their own long-run by birthing and killing systems every 5 years. 4. You assume this predatory system is in the minority of all systems (ie. a bad apple). This just demonstrates your lack of cross-system experience with modern franchising. 5. Intentional franchisor insolvencies, especially in Canada with our toothless CCAA, is a cottage industry. Funny how the brother-in-law hangs around for the friendly bank receiver. Go ahead and bleat in front of an Ontario justice: there are some defenses but... Les Stewart MBA FranchiseFool: Understanding Franchising

Les Stewart MBA FranchiseFool :: WikidFranchise

Re: Predatory is absolutely win:win by Guest

Submitted by Guest on Tue, 2009/02/24 - 19:01.

Thanks Les for the insights. If this disgusting behavior is business as usual for "modern franchising" then the best advice for the would-be franchisee is to avoid franchising altogether, stay unemployed and suck the government benefits systems dry.

Re: Quiznos CEO Deno Resigns as Schaden Steps Back In by Guest

Submitted by Guest on Tue, 2009/02/24 - 10:09.

OMG! I can't believe this is happening to us... I've been a FO since 2004 and SURVIVED the MASSIVE fraud and theft that occurred during the Schaden & Schaffer regime...GREG...what were you thinking bringing this guy back!?!?! What the hell were you thinking?!?!?!?!?!?! Today my top-market-ranked franchise just became worthless! OMG! I can't believe this is happening to me...

Fraud by Guest

Submitted by Guest on Tue, 2009/02/24 - 11:37.

The Quiznos name will soon be synonymous with Fraud. The Business schools will be using them as a case study. Check out this site for Quiznos fraud related stuff ( http://www.cafepress.com/removeblinders). I am a Franchisee and I've been forced to give up. I'll be shutting down next week and I am not accepting the new coupons. If all franchisees refuse to accept the coupons, somebody will eventually sue the Quiznos corporation for it.

Q Franchisee Profitability Not Even A Consideration by Guest

Submitted by Guest on Tue, 2009/02/24 - 09:13.

Increasing franchisee profitablility with a million sub giveaway AND only three weeks worth of tv advertising in the ENTIRE FIRST QUARTER??? Franchisees will have paid in around $14 million dollars by the end of the quarter for an ad fund that isn't buying any ads. Where is the accountability? Where did the money go? Quiznos franchisees are completely subsidizing this giveaway. This isn't Denny's. Q corporate is selling food, paper, and supplies to franchisees at regular price and then trying to force franchisees to give it all away for the "good of the brand". Since (p)Rick is Q's biggest shareholder the idea that this is for the "good of the brand" is laughable. What Quiznos franchisees need now is the Justice Department and IRS to raid that den of thieves in Denver, seize the financial records and remaining cash, and try and figure out just how much money was "lost" by The Dicks, Dino, and Brannanman and how much is left to return to current and former franchisees. And Dino, don't think you're out of this because you're no longer involved in the day to day operations. I'm sure (p)Rick is making sure that you will take the fall for any improprieties and wrongdoing that have happened over the past few years. Don't forget you may be an accountant but Da Da is a lawyer. Your best bet is to contact the TSFA lawyers and cleanse your soul. That, by the way, goes for any of the Qtards reading this post, current or former. And to you Smashburger franchisees. (p)Rick is the driving force behind your chain as well. What do you think of the idea of a million burger giveaway with his company selling you all of your food, paper, and supplies at full price? If I were you I'd lawyer up fast.

What About The Laid Off Qtards? by Guest

Submitted by Guest on Tue, 2009/02/24 - 08:35.

In all this no one has said anything about the additional 100 qtards who lost their jobs due to layoffs. To those of you who worked with The Dicks, Dino, Brannanman, and the rest of the overpaid qtards to intimidate, cheat, and destroy thousands of hard working franchisees (and that's all of you) I just have two words for you. Ha Ha.

Re: Quiznos CEO Deno Resigns as Schaden Steps Back In by Guest

Submitted by Guest on Tue, 2009/02/24 - 01:15.

By forcing the franchisees to pay the tab on the largest food give-away in the history of Quiznos (and that says a lot) during the worst economic slump since the Great Depression just so Quiznos can move enough food to survive the first quarter of 2009, Deno has set the wheels in motion for a massive number of store closings. In my opinion he has literally destroyed the chain. It's unlikely Schaden or anyone can stop the meltdown at this point. Every franchisee I know (and I know a lot of franchisees) has lost faith in the chain and in management. They are convinced it can't be salvaged and are moving to the exits. Time to cut your losses. The sooner you get started putting your life back together the sooner you will get it back together. As for Schaden, now that it's crunch time he chooses to reappear and save himself from having to make good on those personal guarantees he no doubt agreed to when borrowing those hundreds of millions to take Quiznos into hypergrowth a couple years ago. Good luck. The franchisees who you said to make subs without profit are now telling you to save your franchise without stores.

(p)Rick Schaden? Hey, He Owes Me Money by Guest

Submitted by Guest on Mon, 2009/02/23 - 23:38.

$300,000 to be exact. This is the (p)Rick that built the current system that rips off franchisees, sucks them dry, and then spits them out. Only a fool would believe that this a-hole hasn't been pulling the strings over the past two years, that the giveaway program was anyone else's idea, or that he won't do all he can to try and intimidate franchisees into towing the corporate line until they go under.

Quiznos Give Away by Guest

Submitted by Guest on Mon, 2009/02/23 - 22:35.

Quiznos announced they are giving away one million sandwiches? Hardly. Franchise owners are on the hook for the entire cost. Quiznos did reimburse us a paltry sum for the on-going By One Get One that it's been sending out in massive numbers the past couple of months. Everyday low prices, excessive couponing, no advertising, and now free subs and they wonder why we are up in arms with them. Shaden was ineffective before and gouged us to death on excessive food costs. Now he is back to start it all over again. We are in a death spiral. I would love to see bankruptcy and new ownership take over this brand.

Denny's Versus Quiznos by Guest

Submitted by Guest on Mon, 2009/02/23 - 22:44.

Dennys airs a Superbowl ad and offers guest a free breakfast the next day. Dennys covers the cost of the breakfast to it's franchise owners. Quiznos announces a million sub force fed giveaway and also announces another change in ineffective leadership the same day. Quiznos also spends ad money wisely to promote this million sub giveaway by issuing a press release. Give me a break. Quiznos fires it's advertising agency and hoards franchise owners ad funds? Sounds a lot like what's going on in Washington.

Schaden, Enjoy your new by Guest

Submitted by Guest on Mon, 2009/02/23 - 22:38.

Schaden, Enjoy your new office space now that you've fired everyone and their dog in Denver. I nominate you buddy for making the world better.

Quiznos copying Dennys by Guest

Submitted by Guest on Sun, 2009/02/22 - 18:52.

Quiznos will launch a Million Sub Giveaway on 2/23. Although Quiznos isn't giving away a million subs...the Frachise Owners are. Keep in mind...no reimbursement to the FO's for this to at least cover food costs. This is their idea of marketing...giving away food. I guess the Shadens American Food Distributors needs to generate some more money off the back of their so called "partners". It's disgusting isn't it?

Quiznos Give Away by Guest

Submitted by Guest on Mon, 2009/02/23 - 08:57.

It doesn't matter what opinions a Quiznos franchise owner has. Corporate Q has always had the opinion that if it wants franchise owners opinions, they will give it to them. Morally bankrupt is the Mission Statement.

Some Giveaways Work by Granville_Bean

Submitted by Granville_Bean on Sun, 2009/02/22 - 22:51.

Hmmm, McDonald's (whose US units are approx. 85% franchisee owned) has done several giveaways. Though it has mostly been connected to new product launches. So anyway, fine to criticize the Zor, but what do the clever Zees propose? Q units are going out of business right & left. How do you stop this? By raising prices? Not in this economy. The first week you raise prices you get a nice boost, oh boy it is working, raise them 10% and get a 10% revenue boost. But wait until the 3rd or 4th week. Your guest coutns are way down. Your customers have changed their habits. It doesn't happen overnight. The first day they walk in and see the higher prices, most will not walk out. But next week many will remember those prices and not bother to walk in. They will go elsewhere. Raising prices is not always a solution either. So what to do? As a customer I enjoy the Quiznos Prime Rib Peppercorn, but I wouldn't take a Q franchise if you gave it to me for $1.

But Quiznos Giveaways Don't by Guest

Submitted by Guest on Mon, 2009/02/23 - 12:04.

At this time your opinion seems to be held by the majority. By the way - If you think about it Quiznos will take in approximately $14 million dollars from the 4% advertising royalty charged to franchisees for the 1st quarter of 2009. Of that it will use money from the ad fund "lock box" to buy three weeks of tv advertising and to create and distribute freebie coupons. No radio, no sponserships, no nothing else. So that begs the question - WHERE DID THE AD MONEY GO? Dino is suppose to be a CFO wizard so I'm sure he knows. David, why don't you share the information with the rest of us? We'd love to know in which country our money ended up. (the 14 mil is an approximation and is based on an average store gross of $7,000 per week, 4% ad royalties, 12 weeks worth of sales, and 4200 stores.)

Where did the $14mil go? by Guest

Submitted by Guest on Tue, 2009/02/24 - 01:26.

how much are the severance packages for all the senior executives that have been hired, fired and scared off in the last 3 years? how much rent do they pay on the empty office building in Larimer Square? why is Q not running tv ads about new lower prices anymore? or any tv ads anymore? I guess they worked.

The Dicks really are back (Quiznos) by Guest

Submitted by Guest on Mon, 2009/02/23 - 20:54.

Check out Nations Restaurant News--Dickie Schaden deposed Dave Deno and the other CCMP Partners today. Pity the poor franchisees. Run for the hills, save yourself !

Quiznos drama, overthrow today by Guest

Submitted by Guest on Mon, 2009/02/23 - 20:59.

Typo-- Schadens are back !

Re: Quiznos drama, overthrow today by Shaden Deserves to Rot

Submitted by Shaden Deserves to Rot on Tue, 2009/02/24 - 18:13.

Rick Shaden is a criminal. He is guilty of laundering money, receiving kickbacks, hiding assets in off shore accounts and tax evasion. Instead of returning as CEO, he should be in a dark dank solitary confinement cell sleeping in his own filth instead of his multi-million dollar estate where the property taxes alone are almost $100 grand a year - flying his private jet - all bought from the blood sweat and tears of his slaves...I mean...his franchisees.

Defamation: word to the wise by Paul Steinberg

Submitted by Paul Steinberg on Fri, 2009/03/06 - 01:35.

"Shaden Deserves to Rot" writes: Rick Shaden is a criminal. He is guilty of laundering money, receiving kickbacks, hiding assets in off shore accounts and tax evasion.

Yes, the "kickback" issue is well known and has been discussed here on BMM.

On the other issues--having assets offshore is not per se illegal, and you don't provide documentation for your other charges. I don't like Schaden myself, but you want to be careful about statements which cross over into being legally actionable.

Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400

Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400

I'm still trying to get my mind around how anyone could be by RichardSolomon

Submitted by RichardSolomon on Fri, 2009/03/06 - 06:16.

justified calling some a taker of kickbacks after siigning a contract with that person in which specific agreement is recited that the guy (the franchisor) has the right to designate vendors and the FDD discloses that the guy (ther franchisor) derives revenue out of that vendor relationship. Amongst normal, educated people, specific consent to something exonerates the permitted conduct of any wrong doing. I appreciate that consented conduct can be overdone - anything worth doing is worth doing to excess - and I can see the possibility of abuse claims where the abuse causes critical collapse impact of the business hit by the practice. Why is it that the Quiznos cases are not proceeding upon common law destruction of anticipated consideration instead of fraud - when it comes to the vendors issues? Or am I missing something?

Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School

Quiznos CEO Deno Resigns as Schaden Steps Back In

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