- Front Page
- Biz Tools
The Franchise Owner's most trusted news source
HEARD ON THE STREET – Rumor has it that Quiznos franchise owners, many struggling in even a good economy to reach profitability, are grumbling that the head office is requiring a significant decrease in the price of what store owners can charge for many sub sandwiches. Not only does that mean less margins on their most profitable items but prices are also coming down without also reducing food costs. For example, the large premium steak subs will go from $9.99 to $7.49. Yet cost structures for the shop and sandwiches will remain roughly the same.
"Na-ah," says the head office. In local marketing meetings, Quiznos has argued with owners that the chain actually is reducing costs by slightly trimming meat portions for the cheaper sandwiches. Its master franchise in Canada pioneered the reduced prices and saw an increase in customers. Some franchise owners reply that the increase in customers did not last long and wasn't worth the erosion in price. Once cut, it is anticipated that sub sandwich prices will take considerable time to bring back.
Bringing its sandwich prices more in line with the competition is a sign that Quiznos is trying to maintain market share. Domino's Pizza and Arby's have recently entered this sector with their under $5 toasted sub sandwiches.
In January, the sub chain plans to blitz the market with a buy one sandwich get one free coupon. Franchise owners need to mail in the coupon, and the store owners will be paid $0.75 per coupon, up to $300 when Quiznos Corp. gets around to processing those rebates.
It's a tough market out there.