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Granville_Bean's picture

San Antonio Guest

Says: "I've ran my Q store here in San Antonio for six years successfully, .... I built the store new, never seen a return on profit, but was hopeful that I would. "

Guest, my condolences on your closure, but also congratulations on getting out and getting on with the next chapter of your life.  The only thing I disagree with is that your store was run succesfully given that it never made a profit. Evidently it was close enough to break even to keep you hooked and not drain you so fast that you couldn't continue.  In a way that's too bad as that kept you tied up for six years on an unprofitable venture.

Every case can be different, but my rule of thumb for the restaurant business is, if you still running monthly losses after a full year of operations, carefully examine your P&Ls to see if there is anything under your control that you could change that would be expected to turn the tide and make it worthwhile for you to stay open another year.  If not, close, don't throw good time & money after bad.  You are not going to make back your original money if you keep having additional losses.

If you do see something that you think you can turn around and decide to keep trying, if you are still running losses after two years, get out, Isn't that long enough? The changes must be under YOUR control.  To HOPE (or pray) that the Zor will make some brilliant move to turn the tide isn't something to depend on.

Quiznos Closing

The comment about new ownership wanting to close would be like a dairy farmer buying out another dairy farmer and saying that he would kill all the dairy cows and start over. That doesn't even make sense at any level.

New ownership will be buying the existing royalty stream. There isn't a lot of overhead keeping existing stores open (even lower volume) due to the fact there is no field supervision left to even call on stores. That being said, the existing ownership is AWOL waiting for the sale of this company to occur and current franchise owners are paying the price with an ever-dwindling customer base. Rick Schaden is the Bernie Madoff of the QSR business.

Gary Ganue

After visiting my local Quiznos, in Charlotte, its also one of the few left by the way, the owner whom I have gotten to know very well told me, his theory on this BTE event. He thinks that this "Better Then Ever" test is to eliminate the last few stores left. He thinks that with the last few eliminated, the corporation can start fresh and grow again, not making the same mistakes, but this time the corporation controls all aspects of the store removing the franchise owners completely, and removing all the lawsuits, etc. He also mentioned to me, that the last time they did a cleansing was when they forced the stores to a mandatory wallpaper upgrade in which the owners were forced 4-5k (I don't recall the exact number), either by paying up, or a loan with interest from of course yours truly the corporation. He said then, and then many stores made the choice of closing down. I personally thought it was odd that many stores I frequented outside of Charlotte were really nice looking, and didn't need a upgrade, but that is just me.
The owner that I now have good acquaintances with is also a great conspiracy theorist too. He does sometimes let his mind wander about government conspiracies and things of that nature. Kind of funny to hear him, sometimes. I stumbled across this site in its entirety through Google to see see if I could find anything on Quiznos and the BTE, which led me to this wonderful site.

Store Closings Coming

Quiznos just announced significant food price increases to franchise owners. Many owners feel this is the last straw and are planning to close before the end of the year. Watch for more news to be posted here.

Note to Qs zees: going after franchisees ..not practically !

Just had time to see this post. Writer is off somewhat..

The court will do nothing in the event of a Chapter 11 (or 7)...it only will react to filings made by a receiver or future Qs successor. If Qs has no future replacement for said zee, or if Quiznos has no staff left, franchisee could well skirt under the radar for some time. The court has no police force !

If the Qs franchisees not paying, have no money (which is most) and get sued by a fruture Quiznos successor, deny the claim quickly, officially. Send it to legal purgatory. Volley the ball back and forth. Make them come up with origianl documents. It will be there so long and Qs will be such a disaster, the claims cant effectively be worked.

Its over now....

Guests, Granville;
I've ran my Q store here in San Antonio for six years successfully, in all the ups & down of the economy, the roller coaster ride that the Q corp has set us on, I actually lasted this long. I built the store new, never seen a return on profit, but was hopeful that I would. The BTE test provided final nail in the coffin. Our sales have dwindled down completely, I've never seen so many customers walk out, not seeing what they wanted on the menu though we do not have a problem making the classics. Bottom line, the menu is premium. Too premium. As Granville Bean as said above, to only the QSRs franchisors, Q Corp, the menu is premium, not the customers walking in. Even though its only a ten cent price hike, what the corp doesn't understand is, that's ten cents the consumer just doesn't have or want to hand over. I don't blame myself for the store now failing, and us closing in the next two weeks, nor do I blame anyone. The economy is just too tough for too many changes. Its like Mc Donalds getting rid of the Big Mac and forcing everyone to eat the Mc Bistro.... Oh wait they did do that!? And it failed. This too will fail. It will make a great chapter in college text books called "The rise and failure of Quiznos". This is and a great valuable lesson that they will teach over and over.....

Buy Q Corp

This isn't McDonald's buying Boston Market and getting some prime locations and a concept that still worked when run by professionals. What would they own? A bunch of five year leases negotiated by qtards not interested in the franchisee's well being but how much of a kickback the landlord would pay to q corporate. Junky, second rate equipment and furniture forced on franchisees at inflated prices. A concept that has failed and would need to be radically changed. A second rate management team lead by a former hair designer. It would be cheaper to start a chain from scratch.

Received a call from an investment company...

Not too long ago I received a call from an investment company. They paid me a couple hundred dollars to answer some simple questions. They only wanted to talk with me the owner of my store. Questions were basically:
1. Would you do this again?
2. How much if you could would you sell your store to us for? We want to eliminate the owners and own the stores and the Corp. out right.
3. Do you think there is any hope for this franchise?
4. What do you think ultimately drove this company down?
5. Do you have any other input or advise?

this is ricki and dicki

this is ricki and dicki ....thats enough bad talk about my brand....all you stores back to work now....this brand will be just fine after we have our new roll out and get you stores to update your appearances all for a small fee of course.....now if you don't mind i need to get back to my massage..er ...board meeting.....back to work....

perfect

I could not have summed this up better than you did here ...i raise my glass

Turkey Based Meats

GB,

Thanks for your post. I'm working on a new concept and used the insight you provided to differentiate our meat product offering strategy in a conversation I had with a key shareholder this afternoon.

Cheers!

Scapegoat Schaden

Think Superman is available to come fix Q? I think even he may not be able to fix this heap of Kryptonite. I hear that Wonder Woman can bark out orders to franchisees in a pleasant voice.

Quiznos bankruptcy effect: Schadys out

While a debt redo or Chapter-11 wont change the essential economic problem of Quiznos for franchisees, what it will do is boot out the Schadys. They are the impediment to fixing this company.

Granville_Bean's picture

Premium food

Guest says: "Go back to offering premium food at a more expensive price. "

Here's the problem with that: The ONLY people who regarded Q as having premium food are Q Zees.  The customers never thought that.  To a customer, it is a QSR that competes with Subway.  You order standing up at a counter, move down the line to the cashier and are handed your food.  You then go seat yourself if you want to eat in, or walk out with it in a bag.  It's a QSR.  You can get an $8 toasted sub at Subway too.

If the only way forward is to abandon a "value" approach and cede that to Subway, it might be "out of the frying pan and into the fire" since there is no guarantee they can compete with Panera (or anyone Q regards as "premium") either.  Q would start out having to BUILD a "premium" image since they DON'T have one now. Yes, you & I know that lots of the supposed Italian cold cuts at Subway are really turkey products, but the customer doesn't see much of a difference between a Q and a Subway.

Granville_Bean's picture

Advertising

Guest sez: "The 4% local and national advertising fund is a black hole. "

Maybe so, maybe so.  And the fewer Q stores there are, the less effective such a fund will be.  With a decreasing density of stores even less advertising can be bought, and if national ads are attempted, more and more of the advertising will land in areas with no Q.

My county had ONE Quiznos and seven McDs.  Guess what went out of business?  All those seven McDs advertising together could buy a lot more local ads than the one Q could.  Now that the one Q is gone, any national ad that landed here would have little effect.  (Yes, it could have a brand awareness function for when a local resident goes somewhere that a Q is located, but again the fewer stores nationally, the less effective are national ads.)

A system with a small number of untis works best if it is regional and can be a major player in a regional market.  A system with a small number of untis disperesed nationally, not so good.

I Agree with Qsuck, on getting control of the food/supply

Although, Bankruptcy will not help franchisee with taking control of the food and supply cost, they will not save themselves from franchisees quitting. The main problem with Quiznos under the management of the two d*cks are the fact that they overcharge on food and supplies. This causes a ripple effect towards franchisees not being able to make enough money per store to be able to expand or become a multi-owner. Ask anyone, and you wonder if it's worth opening a business that can't not afford to hire any employees? As a result, owners are forced to run the stores by themselves. Compared to subway, with same store sales as quiznos, their profit from lower food and supply cost equals to extra payroll dollars which helps their owners from being stuck at their store 24/7.

As a franchise owner, you don't want to be a worker.

At Quiznos, Even if your store makes money, it's not worth it because you have just bought a job to run the entire business by yourself. If only, Quiznos give back the over priced cost of their food and supplies, then every owner will have at least an extra $2000-$3000 per month to hire more workers. So don't blame it on the fact that rent is too high, poor management(franchisee), and franchisee are stupid people that b 8tches and whines. Because Subway does not make more in terms of revenue and they have over 30,000 location, Im sure that there are about the same bad owner at Subway then there are at Quiznos. So please reconsider.

Granville_Bean's picture

but can this be accomplished thru bankruptcy?

qsucks wishes: " is for the franchisees to get control of food/supply cost and the advertising fund through co-ops."

But can this be accomplished through bankruptcy?  Bankruptcy of the F'sor is not for the purpose of helping the Franchisees. Why would the reorganized F'sor give up major revenue sources?  Perhaps there are scenarios where this might happen, but what are they?

Granville_Bean's picture

a small error....

qsucks said: "The key, and as a Subway franchisee Granville you know this "

We do not own any Subways.  Interestingly, someone we were developing in management decided she'd rather own her own business, so she went into Subway due to the relatively low entry cost.. She is a small multi today, sometimes I talk business with her.

The New Boss - Same As The Old Boss

The key, and as a Subway franchisee Granville you know this as well as anyone, is for the franchisees to get control of food/supply cost and the advertising fund through co-ops. Run properly they will get food costs in line, get the the supplier kickbacks, and get the brand on tv with some good, hard hitting ads at prime advertising times. They'll also have a seat at the R&D table. Anyone remember the last winner Q had? Yes, it has been that long.

By the way, I knew someone back around 2006-2007 that suggested co-ops to Brannanman as a way to get the franchisees healthy again and get costs inline. That was when franchisees thought Brannanman gave a rat's rear-end about them. I think the Savior is still laughing about that.

But, you say, this is 2011 and Dick won't ever agree to give up the ability to overcharge franchisees. He won't. And neither will the Wall Street fat cats that Dick ripped off for hundreds of millions of dollars. If they take this albatross over what else do they have? Some depressed downtown Denver real estate and the Quiznos name and that's it. What? Oh yeah, they also inherit all that managerial and marketing talent that Dick has assembled - hahahahahahahahaha. But I digress. That's why whether it's Dick or the Fat Cats in charge franchisees will maintain the same position they have for years; bent over and grabbing the ankles.

Granville_Bean's picture

better than usual

"How's that for a start Granville?"

Better than usual.  Usually we just hear repetitious rants about how bad the former owners were, and delusional schemes as to how they will be set free from onerous franchise agreements.

RE: Ahhh.... I see.....

In order to be set free in a Quizno's bankruptcy the franchisee will need their franchise agreement to be rejected by Quizno's with the permission of the court. If the franchisee owes royalties and ad fund contributions those will not be forgiven and the court will vigorously go after the monies from the franchisee. Franchisees who are set free will have to spend money to de-indentify to the satisfaction of Quizno's as well.

Ahhh.... I see.....

Just when I thought I could stand on my second store balcony yelling "Free at last!" "Free at Last!"
What I think Charles is looking forward to is when Quiznos does and when they go under, in the financial restructuring and with the bankruptcy in progress, he would quietly change over his store. I've seen this happen first hand with other franchise owners I know of, but with franchises Corporations that have not gone under IE Dunkin Dougnuts, Pizza Hut, Church's Chicken, and a handful of others. By the time the New Corp figures out, he"ll already have a new LLC, sign, bank accounts and different staff, Q won't know what happen.

What New Ownership would do

New ownership would use the existing advertising funds to advertise the brand. The 4% local and national advertising fund is a black hole. Money goes in but it never comes out. When was the last time you saw a Quiznos commercial?

New ownership would recognize that the business model does not work by forcing owners to pay excessive costs for food and supplies by using their cash cow supply network call AFD.

New ownership would recognize that you cannot coupon each and every week. The non-stop coupon bonanza is lazy and stupid marketing.

New ownership would fire every single employee in the Denver office and start over. You have people occupying that office who would not have qualifications to be an "occupy Wall Street" protester. One bad decision after another comes out of that office with no accountability.

New ownership would re-position the brand to compete on a higher level by recognizing they cannot compete with Subway. Go back to offering premium food at a more expensive price.

How's that for a start Granville?

Granville_Bean's picture

what should new ownership do?

What do our numerous Guests think that new ownership should or would do to turn around the company called Quiznos?

Re: BTE Test and its failures

@Charles LaFont " He hopes he and the others can go local and with no Quiznos name or fingers involved he wants to roll out gumbo, and other fine local foods in his restaurant, if he has any money left over."

Well going independent ain't going to happen unless in a Q bankruptcy the franchisee's agreements are rejected by the debtor in possession or new owner. It is not a choice for the franchisees to decide whether they want to remain a franchisee or not. Bankruptcy protects the estate and the creditors not franchisees.

Oftentimes franchisees wish for their franchisor to go bankrupt so they can be freed from the franchisor and it simply doesn't work that way.

BTE Test and its failures

My friend who owns a Quiznos here in Baton Rouge, and he said that Quiznos is flying around desperately trying to roll out a new menu. They are testing a whole new menu that costs more to the store owners, with much more premium products and lower prices to the customer. In return for good assurance of continuing to price gouge the remaining owners, he also said they will coupon him to the brink of bankruptcy in this new menu test. Training all the new employees for the new menu also comes at a cost to him. Also for good assurance the prices are slightly higher on the new grilled flat breads, roast beef, turkey and ham. Pre weights are also larger (something he complained about that currently their smaller portions of meat on the subs and now will be more). He feels like the others here in Baton this is the final nail in the coffin. He hopes he and the others can go local and with no Quiznos name or fingers involved he wants to roll out gumbo, and other fine local foods in his restaurant, if he has any money left over.
On another note, the schadens don't care what happens to this business. Rumors are they are killing in the "Smash Burger" (Five Guys rip off) business and their "Red White & Blue" (Chipotle Mexican rip off) Mexican restaurant. Again he told me, but too scared to put it on the internet in fear of retaliation.

Need Cash Rich Franchisees

For the target to be attractive. DD was prime with blood when the vampire squid approached.

No blood left??

But I thought the vampire squid approach was working so well at places like D’Donuts.

The PE World Won't Touch Q

They are the laughing stock of the PE world. Dick has been trying to sell it off to avoid bankruptcy. I started laughing in the boardroom when Dick tried to pitch the prospects of this crap to us.

Bugsy Denaro's picture

Q-pocalyse, Da poifect buyout moment

I'm a waitin' for da Q Apocalypse so as to get 'da brand and 'da rights to 'dem franchise contracts for pennies on 'da dollar. 'Dem whining franchisees have had it way too easy. Wait until I own 'dem. I'll show 'em how to make me money.

Q's Apocalypse Now

Only someone who graduated from the Mao Tse Tung School Of Economics would believe that sucking the life blood out of the producers in the system would end in anything other than collapse. Dick and Dick were in for the short term - they thought they would be out before the collapse but they got too greedy on the cash-out. Now the company built on the broken dreams of thousands of hard working franchisees will soon collapse and these two swinging Richards will have their names written in the history books as the reasons for one of the biggest company collapses in US history. Yes, money matters but every day Dick and Dick will look in the mirror and know that they were responsible for Quiznos' failure, that they were and are failures, and everyone will know their names as failures. They'll be called failures by CEO's and the working man, taught as failures by college professors, written as failures in college textbooks and their failures will be dissected in business schools and term papers from coast to coast. And I? I'm enjoying it all. And I laugh. Because he who laughs last, laughs best. hahahahahahahahahahahahahahaha

Quiznos On A Roll!

Problem is the rolling is downhill. All hopes are now being pinned on what these corporate buffoons are going to do for franchise owners..............Next Year. Tweak the menu and prices and issue a press release that customers should try the "new and improved Quiznos"

Until new ownership comes in, 2012 may well indeed be the last year of a company called Quiznos!

RichardSolomon's picture

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