Quiznos Franchisees See Mixed Results on Company Turnaround

The Associated Press reports that Quiznos franchisees are seeing mixed results for CEO Greg Brenneman in turning around high food costs, low profits and company restrictions on how they could do business.

"Brenneman and his team found the chain had a strong brand but weak profits created by a number of corporate decisions made over the years."

In 2007 the firm tried to "detox" past mistakes made. Stores were weined off of their many coupons.

"This year, as we detoxed everything, we expected sales to come down fairly dramatically. They didn't actually," Brenneman said.

Since Quiznos is a private company, it does not release audited or verifiable financial data. But regarding financial performance of the stores, Brenneman says that store revenues have largely stayed:

"... Average sales for 2007 are estimated at $415,000 per store, about the same as a year ago, the company said."

And he says food costs to franchisees are down.

"With the changes, food costs for franchisees fell about 4 percent across the board."

According to franchise owner Danny Kessels, who is also president of a Quiznos independent franchisee association that represents what he said is some 20% of the network's franchise owners. In contrast to lower profits that corporate officers declare, Kessels said, "2007 profits were down 3 percent to 5 percent" in his store. And he is not alone.

The company is in the middle of launching new products and services. Besides the newly launched Sammie small sandwich, expect to see lobster salad sandwich, pizza and delivery services.