Message from the TSFA President

Writer's Note:  This is a letter sent out to Toasted Subs Franchisee Association members on December 14, 2007 from the president. The TSFA is an independent group of Quiznos restaurant owners, not associated with the franchisor.  Blue MauMau received this letter anonymously. It was not a press release.

Dear Fellow TSFA Members, 

I would like to talk to you, as a fellow franchisee, about what’s going on in our business and address the legal actions you have all heard about.

First of all, I would like you to know that the Toasted Sub Franchisee Association (TSFA) is here to help franchisees be successful.  We are in no way associated with corporate Quiznos or any other organization.  We are made up solely of Quiznos franchisees.  We only exist for the benefit of Quiznos franchisees.  The reason I mention this is to clarify any confusion concerning our role.  Simply put, we are here for you and we are your advocate.

We all know that speaking as a group is more powerful than speaking as a single individual—history has shown us this fact. Corporate Quiznos knows this and that is why they have refused to acknowledge the TSFA’s existence.  Richard Emmett, Quiznos Chief Legal Officer, has said he has no plans to recognize the TSFA and will deal with franchisees “on a one-to-one basis.”  This is code for “divide and conquer.”  Mr. Emmett knows a strong, independent franchisee association is a threat to the absolute power and unilateral control that Quiznos has historically enjoyed.

As you probably already know, the Advisory Councils that Quiznos has recently put together are nothing more than Quiznos-appointed powerless organizations. The franchisees on all of these councils were never elected to their positions and they were, instead, hand picked by corporate Quiznos.  They do not represent the franchisees in the system.

Since corporate Quiznos refuses to talk to or even acknowledge the TSFA, we have no choice but to take our issues to an independent court system.  Greg Brenneman, Chief Executive Officer, and Mr. Emmett have tried to make Quiznos look like a helpless victim of the court system.  They want you to believe they are being picked on by a “young lawyer” who is only interested in collecting a legal fee.  What?  Let’s have a reality check here.

It is the height of hypocrisy for Quiznos to belittle franchisee efforts to pursue their legal rights in court.  After all, Quiznos itself is no stranger to litigation.  Make no mistake about it: Quiznos has sued or threatened to sue many of its franchisees over the years.  Those lawsuits are typically geared to control franchisees who dared to speak out against an oppressive system.  In addition, the Quiznos legal department has sent out countless “Default Notices” threatening legal action for violations like burnt out light bulbs and having a tip jar on the counter.  You may have received one of these Default Notices yourself.  Much like its franchise agreement, Quiznos appears to believe that access to the courts is an equally one-sided street.

The TSFA has employed two well respected law firms to represent our (your) interests.  These law firms have many attorneys working for us, not just the one “young lawyer” that Mr. Brenneman and Mr. Emmett keep referring to in their voicemails.  These attorneys are working diligently, using whatever legal means are available, to bring about change in the Quiznos system so that struggling franchisees can finally make a reasonable profit.  

We are obviously disappointed in the recent Wisconsin court ruling.  Let me clarify this as well. The judge did not dismiss all of the claims on their merits and, in fact, he invited us to pursue these claims in state court which we will certainly do in the event our recently-filed motion for reconsideration of the decision is denied.  The remaining claims will be appealed to the appellate court for further review.  Meanwhile, we will continue to pursue our other cases in Illinois and Colorado.

I cannot overstate how important it is for us to be successful in our pursuit of justice for the past, present and future. You may not realize this, but Subway franchisees have a franchisee controlled food co-op.  They also have control of their marketing money. The only reason they have this is due to their very strong franchisee organization.  In addition to Subway, many other franchise systems have strong franchisee associations including Burger King, McDonalds, Dominos, 7-11, Papa Johns, UPS, Wendys and KFC, just to name a few.

Here is a comparison that may shock you. Recently, on the website BizBuySell, there were 364 Quiznos for sale out of a total of over 4650 Quiznos currently open.  On this same website, there were only 53 Subways for sale out of a total of over 21,000 Subways open.  And this is only one website.

In my opinion, there are three reasons why Subway is successful:

1. Franchisees have full control of food distribution.

2. Franchisees have full control of all marketing money.

3. Franchisees have a strong franchisee association.

Haven’t you ever wondered why so many Quiznos franchisees are struggling or why so many close down?  Maybe a Quiznos has closed near you?  Many Quiznos corporate executives, past and present, disingenuously blame this on the franchisees themselves.  They say these franchisees are simply bad operators and can’t run a profitable business.  I acknowledge that there are some bad operators out there. In fact, the TSFA is not here to protect bad operators.  But it is hard to believe that Quiznos is so unlucky as to have over half of its franchisees, ones that Quiznos approved, be poor business people.  

A more plausible explanation would be Quiznos self-serving conduct, poor store locations, encroachment, the over-charging for food and supplies by Quiznos owned and operated companies, excessive couponing, and a host of other Quiznos-driven policies designed to economically rig the system against the franchisee.

You may have recently seen news reports that quote Greg Brenneman as stating he expects “franchisee profits to increase 60 percent overall in the wake of improvements to the system.”  The big question is, 60% of what?  What was the average Quiznos profit last year?  Given the fact that so many Quiznos were at or below break even, this number can’t be very high.  I doubt Quiznos will ever release these embarrassingly low numbers. Meanwhile, we’ll all continue to wait for that extra $15,000 in profits that Mr. Brenneman promised all franchisees at the beginning of the year.

The TSFA is not interested in a tit-for-tat correspondent relationship via the media with Quiznos. Unfortunately, this has been the only way we have been able communicate with Quiznos.  The TSFA is always open to a dialogue with corporate Quiznos on the premise that the discussion will be a professional, open, honest attempt at resolving problems that still exist in the Quiznos system.

The TSFA will continue to pursue the rights of Quiznos franchisees until all issues are resolved.  If you are not already a part of TSFA Legal Action Program and you wish to join us in this very important effort, please contact the TSFA toll free at (888) 342-6296 or email us at info@toastedsubs.info.  For those of you already part of the Legal Action Program, thank you very much for your support!  Please feel free to visit our website at www.toastedsubs.info <http://www.toastedsubs.info/> .  

Thank you for taking the time to read this letter and I wish you all well in the New Year.

Sincerely,

Danny Kessels
Franchisee and Interim President of the TSFA

P.S.  Congratulations to all Quiznos franchisees for earning the number one position in the quick service restaurant industry for wait time performance, according to the Mystery Shopping Providers Association’s (MSPA) 2007 Wait Time Study!  This is a testament to the great job all Quiznos franchisees are doing.