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NYC Quiznos Owners Say National Value Prices Hurt Them

Don Sniegowski's picture
Posted Tue, 2008/07/29 - 12:57 by Don Sniegowski
HEARD ON THE STREET - There are angry rumblings from New York City Quiznos franchise owners, according to one franchise mole.  The anger is over menu and pricing decisions by the head office that are causing customers to migrate to less profitable items.

Here's what our mole has to report.

In NYC, the Quiznos franchisor has decided to take some items off the menu since the menu was looking too cluttered now that they have calorie counts.

So instead of three sizes, there are only two.

Customers, who used to heavily choose the medium size, are now just going with the large size and skipping the drinks, which is where franchisees were making their money.

And on a related note: the Quizno's franchisees are mad about their franchisor's decision to compete with Subway based on price... especially since Subway's cost of goods is significantly lower.

The Quizno's folks are saying the $5 price matching is causing significant operating losses.

Here in NYC one of the profitable Quizno's locations just sold for over $1M, and the consensus is that the seller got out at the right time and the buyer, an immigrant with more dollars than sense, is in for a rough time.

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Q's Dumb and Dumber by Guest
Submitted by Guest on Wed, 2008/07/30 - 22:00.
Dumb and Dumber, Brennenman and Dino, have completely destroyed the brand. Most franchisees bought because it was a DIFFERENT kind of sub shop, one with great sandwiches and loyal customers that would pay FULL PRICE for a great sandwich. Now, at a severe cost disadvantage, Dumb and Dumber have thrown franchisees to the lions. Their decision to take-on Subway was akin to George Foreman stepping into the ring with Gerry Cooney. It's a knock-out for Subway and a disaster for the franchisees. And of course we can't forget about (p)rick and dick Schaden. They built this rip-off machine that thrives on sucking franchisees dry and churning closed stores to keep their ponzi scheme going. This franchise system is going down.
Quiznos and QSR article on Brenneman by Guest
Submitted by Guest on Wed, 2008/08/06 - 15:26.
According to the latest QSR article on the QSR top 50, the article states that about 10% of all Quiznos locations closed in 2007 which was a tad higher than the 2006 closures. I would bet dollars to donuts that 2008 comes in closer to 12% to 14% closure rate. How in the hell could anyone give Brenneman praise when the closure rates continues to rise when he promised greater unit profitability?
Quiznos Corporate Should Listen by Guest
Submitted by Guest on Thu, 2008/07/31 - 10:20.
In the Bennigans article, one of the reasons they failed was because there was no "differentiation" between them and their competitors. Quiznos executive morons have chose to say that "we are another Subway" and now sell plain sandwiches. As if we don't have enough Subways on every corner, we now have the "me too", Quiznos to join them. I would like some marketing guru to give this positioning a hint of blessing. I am bamboozled why these guys did this.
Q's Dumb & Dumber Strategy by Guest
Submitted by Guest on Thu, 2008/07/31 - 12:32.
And if we're going to compete directly with Subway why even have a "chef" on the payroll? We'd have gotten better recipes from Chef Boyardee than we've gotten from that fast-food line cook. Chef Jimmy came up with original recipes that customers loved - he more than any other single person was the reason for Quiznos' success and growth.
Quiznos Intimidating Franchisees by Guest
Submitted by Guest on Tue, 2008/07/29 - 21:10.
And for those franchisees who are being overwhelmed by the mandated prices - non-participation gets you the threat of a default letter from the jack-booted thugs at Quiznos. Comply or else. Even if selling $5 subs will put you out of business. I guess my questions are the following: 1. Is it legal for Quiznos to mandate prices. 2. Can they default those who ignore the mandates? And as for you Q apologists - this is just another example of how Quiznos will seek out and destroy franchisees who have legitimate concerns with Q policy both financially and personally. It's business as usual at Quiznos, even with Brennenman, Dino, and the rest of the new breed of renegades that runs Quiznos.
Re: Quiznos Intimidating Franchisees by Guest
Submitted by Guest on Wed, 2008/07/30 - 00:50.
Guest wrote: "1. Is it legal for Quiznos to mandate prices." I don't think so ....... Franchise owners are independent business people. Quiznos owns NOTHING inside the stores, other than the trademark, whose value has been steadily diminishing. Perhaps the esteemed lawyers here can give us a legal opinion. Quiznos has stirred up a hornet's nest - a decision they will soon regret.
Quiznos closures at all time high by Guest
Submitted by Guest on Wed, 2008/07/30 - 09:51.
In my area, the Quiznos store closures is at an all-time high and we are in the middle of the busiest part of the year. This would be like Best Buy closing during the Christmas season. We are now a commodity item. The customers are now buying our cheap, bland sandwiches and have steered away from our premium line which distinguished us from Subway. Higher operating costs and food costs will kill us if they continue to force us to compete with Subway. These marketing morons have their heads buried in the sand.
Brand strengths by Guest
Submitted by Guest on Tue, 2008/07/29 - 18:16.
Q should pitch their marketing to the superior product quality. The current ad campaign is a "me too" campaign. And even after the campaign is over, the customers are being conditioned to think of Q as interchangeable with Subway. This is not just a failure of Q corporate, it is a failure of the ad agency which doesn't understand how to differentiate the Q brand from the competition.
Brand Strengths? by Guest
Submitted by Guest on Tue, 2008/07/29 - 18:52.
Guest wrote - "Q should pitch their marketing to the superior product quality. The current ad campaign is a "me too" campaign. And even after the campaign is over, the customers are being conditioned to think of Q as interchangeable with Subway. This is not just a failure of Q corporate, it is a failure of the ad agency which doesn't understand how to differentiate the Q brand from the competition." All this would matter if Q actually cared about the brand and franchisee success over short-term profits and growth metrics which are needed in order to appease their master - the venture capital folks. The use the advertising fund to drive brand exposure to the extent that it will generate interest to the next sucker looking to "be their own boss." Most sheep think that the heavy advertising is the magic bullet to their potential success and Q happily delivers quantity over quality of message to their perspective new victims. Look at all of the marketing they do Martha! We can't lose if we open one of these up! If Q really cared about the franchisees and the brand they would place the advertising and creative direction decisions with the group of people who are in front of the public each day - the franchisees. They'd argue that the franchisees aren't marketing "professionals" but I'd argue that a group of deaf, dumb and blind franchisees could at least equal this marketing spend in terms of brand building and the right type of top of mind awareness.
Franchisees Advertising by michael webster
michael webster's picture
Submitted by michael webster on Tue, 2008/07/29 - 19:45.

Guest writes: "They'd argue that the franchisees aren't marketing "professionals" but I'd argue that a group of deaf, dumb and blind franchisees could at least equal this marketing spend in terms of brand building and the right type of top of mind awareness."

  Well, why don't you do it then by coordinating your local advertising budgets through your IndFA?

Michael Webster PhD LLB
Franchise News


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


Re: Franchisees Advertising by Guest
Submitted by Guest on Wed, 2008/07/30 - 02:52.
Michael wrote: "Well, why don't you do it then by coordinating your local advertising budgets through your IndFA?" We don't have one ........ ! That is an effort being expended by the TSFA to create one. Q collects ad funds for national AND local advertising which they co-mingle, with no accountability of either, to their franchise owners.
Where is that? by Guest
Submitted by Guest on Tue, 2008/07/29 - 20:14.
"Well, why don't you do it then by coordinating your local advertising budgets through your IndFA?" Mike - please point to the area of the Q franchise agreement that allows for this ability?
No More $ For Additional Q Advertising by Guest
Submitted by Guest on Wed, 2008/07/30 - 08:21.
And even if franchisees have the ability to advertise through an independant franchisee association, how much more can they take out of a business to run other advertising? 7% franchise fee, 5% ad fee, 38% food cost, 2.5% paper cost, rent, bank loan, labor and the recent minimum wage pay hike. It's all gone at the end of the month. Something has to give.
Local or national by Guest
Submitted by Guest on Tue, 2008/07/29 - 20:33.
The problem is that the franchisor controls the national ad budget. At best the franchisees control local spending in their market. Quiznos corporate made a decision to devalue the brand image for quick sales. Subway can do this because they have a loyal following and a strong image as fresh value food. They also have a lower cost of goods. Quiznos franchisees can not tell their customers that the store is not participating in the promotion. They will just get mad. To the customer, Quiznos subs are now worth $5 and they will not pay more than that. There is nothing that franchisees can do except sell $2 Sammies and $5 footlongs in competition with the Subway down the street. And the Subway may make a small profit, but with Quiznos food cost and the required purchases from the suppliers owned by Schaden, the Quiznos owner will lose money every day. If you want to see a funny video, go to www.quiznosfranchises.com and see where the salesman says that when you buy a franchise you "mitigate your risk" and "there IS less risk" if you buy a franchise.
Local Advertising by michael webster
michael webster's picture
Submitted by michael webster on Tue, 2008/07/29 - 20:31.

Guest writes: "Mike - please point to the area of the Q franchise agreement that allows for this ability?"

Look at your franchise agreement regarding your obligations regarding local advertising.

Then think: "Asking forgiveness is easier than asking permission." 

Michael Webster PhD LLB
Franchise News


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


Local or national by Guest
Submitted by Guest on Tue, 2008/07/29 - 20:25.
Most zors control the national advertising, which accounts for most of the ad spending and is what positions the brand image. The local spending is normally on coupons or POP material. So even if the zees were able to control local budget, this doesn't fix the problem of a national campaign that says customers should buy our product because it is really cheap. If you want to see a funny video, look at the Quiznos franchisee sales video online, where they say that if you buy any franchise you "mitigate your risk" and "there IS less risk" and franchising is "inherently" less risky. www.quiznosfranchises.com
Selling a Quiznos by Jessica.Taylor72
Submitted by Jessica.Taylor72 on Sat, 2009/07/11 - 15:18.

If any of you out there own a Quiznos and are thinking of shutting down this company sold all of my equipment and I got nearly $30k out of it.
http://www.DoubleTakeAuctions.com
I highly recommend them!