Quiznos Franchise Cost Profit Failure Reasons

The Quiznos chain sells subs and other sandwiches, as well as drinks, salads, soups, and other foods. Quiznos used to be a highly well-liked restaurant, but over the past few years, its number of locations has steadily decreased. Quiznos is actively seeking new investors to launch franchises in an effort to keep the brand from going out of business. Quiznos does not require a potential franchisee to have a particular amount as net worth. Instead, it only requires 30% of the initial investment in liquid capital to open an outlet of Quiznos. Like most other franchises, Quiznos can be opened through a similar approach. If your application is accepted, you will be contacted for an interview. It’s not your imagination if you are unable to recall the last time you saw the Quiznos franchise. In a decade, they went from having 4,700 sites to having fewer than 400, according to Restaurant Business. How can such a significant loss ever occur? That’s a tremendous loss, accounting for nearly 90% of their stores.

How much does a Quiznos franchise cost? 

A Quiznos franchise is expected to require a total cost somewhere between $216,100 and $338,500 to buy a new one. A Quiznos requires $10,000 as a franchise fee. Before the restaurant could open, the deposit must be paid. Any additional franchise requires a fee of $5,000. Other fees include: 

• Royalty fee: 5% of gross sales 
• Management fee: 3% of gross sales
• Marketing fee: 2% of gross sales

How much do Quiznos franchise owners make? 

In regards to a franchisee’s potential financial success as well as the previous success of company-owned or franchised locations, Quiznos makes no guarantees. The company might give you the actual records on revenue and profit for Quiznos, though, if you are buying an existing Quiznos franchise.

How to Open a Quiznos Franchise?

You can approach Quiznos to start a franchise. But currently, Quiznos is not offering any franchise opportunity for sale.

History of Quiznos 

Jimmy Lambatos, a chef, started Quiznos in 1981 in Denver, Colorado. Having previously managed a steakhouse kitchen, Lambatos was motivated to create a premium sub sandwich that was modeled in the neighborhood Italian delis during his youth. The Quiznos sub was created using baguette bread and a commercial toaster oven.  After a modest expansion, the restaurant company was bought in 1991 by 23-year-old Rick Schaden and his father and lawyer, Richard Schaden. By the end of 1995, Quiznos had 103 different shops, with Rick serving as the company’s new owner, president, and CEO. The restaurant chain reached its height in 2007 with more than 5,000 Quiznos

outlets globally.   

The real reasons why Quiznos franchise failure across the nation

Quiznos was once a very huge deal, but that was not too long ago. Compared to Subway, they were a little more sophisticated, and those toasted bread were fantastic with anything. However, it appears that when it boils down to fast food sub-shops, toasting rolls is insufficient to keep them at the top of the food chain. Yes, Quiznos was expanding quickly and posing a threat to Subway with its toasted subs, but the 4,500 outlets it had were based on mediocre business. The Quiznos Franchise owners were furious because they were making virtually no profit. The collapse of Quiznos began in 2008 when the recession hit. Franchisees started closing their doors as a result of the meager revenues, but Subway was excited to introduce its new $ 5-foot-long sub. The real reasons why the brand is fading across the nation are

1. Quiznos Franchise Lawsuit and Bankruptcy

Between 2007 and 2017, Quiznos’ business steadily declined, and in 2014, CNN claimed that they were declaring bankruptcy. There were over 2,100 stores at the time, and they were all intended to be open during a major restructuring. Corporate, which only owned seven, said in a statement that they will carefully examine their operating process. Quiznos and Subway have always competed for a share of the sandwich industry, but Quiznos’s issue grew when other higher-end sub businesses started to arise and steal away the customers who still wanted something a bit more upscale. In addition to stealing Quiznos’ customers, franchises like Jimmy John’s and Potbelly’s growth pushed Quiznos to make hard choices that severely affected their financial position.

2. What are Quiznos’ obligations to its franchisees?

Due to the chain’s peculiar business model, Quiznos franchisees are especially impacted by competition and any factor that reduces profits. Quiznos corporate purchases all supplies from suppliers, including food, paper products, and CDs, before reselling them to franchisees. This differs from the majority of fast-food franchises, which negotiate with vendors and then supply locations directly at a discounted price since they are buying in volume. Quiznos’ limiting business tactics weren’t ignored, and in 2006, about 10,000 franchise owners filed a class action lawsuit against the company. According to Forbes, they asserted that corporate effectively turned them into what is referred to as “captive customers” and forced them to purchase supplies at exorbitant costs, making it practically hard for them to be successful. Schaden vehemently denied any wrongdoing, arguing that Quiznos was merely charging its franchisees market prices. They were nonetheless compelled to settle the case and ended up giving their franchisees a staggering $206 million.

3. Birth of Quiznos Franchisee Association

In the midst of all the legal battles, one franchise owner’s experience emphasized the tension between owners and corporate. When another franchisee opened close by, Bhupinder Baber, who had two shops in Long Beach, saw a sharp decline in his business. He established the Quiznos Franchisee Association in an effort to support other owners in their battle against what they saw as unfair business practices after receiving no reaction from the corporate offices, who had previously assured him that no one would be operating nearby.  According to the Long Beach Post, Quiznos terminated Baber’s franchise agreement in 2004. Baber was scheduled to present his arguments in Denver by the year 2005. He committed suicide by walking into a Quiznos bathroom because he was worried the trip would be too expensive and he would run out of what little money he had left. He left a note, which was made public, requesting a thorough inquiry into Quiznos and its business methods.

4.Quiznos Sex Scandal

A sex scandal may occasionally briefly make news before people forget about it. Other times, it causes serious harm, which is unquestionably the case when a senior executive of a company and a 13-year-old girl are involved. The senior VP of marketing for Quiznos was detained in 2006 after conversing with an online identity he believed to be a 13-year-old girl. It turned out to be a police officer from Canon City, Colorado, and they planned to meet up after having several inappropriate discussions. Scott Lippitt was charged with five felonies, including a minor’s sexual exploitation, internet luring, and criminal attempt at sexual assault on a kid, so it didn’t turn out the way he had hoped.

Quiznos Franchise Success and Failure Rate

The below table will highlight Quiznos success and failure rate for 3 years. This will supplement your decision-making process.  

Year	Format	Start	End	Change
2018	Franchise Owned	372	304	-68
	Company Owned	3	2	-1
2019	Franchise Owned	304	278	-26
	Company Owned	2	2	0
2020	Franchise Owned	278	229	-49
	Company Owned	2	1	-1

Competition Analysis of Quiznos

 

Quiznos	Cost to Franchise	Franchisee Fees	Royalty + Ad fees	Expected Profit	Recoup of Capital	FD Rating
Quiznos	$216,100-$338,500	$5,000	5%+2%	–	–	3.0/5.0
Arby’s Franchise	$628,950 – $2,306,000	$6,250-$50,000	4%+4.2%	$3.9 billion	8-14 years	3.9/5.0
Subway Franchise	$207,050-$476,900	$15,000	8+4.5%	$31,000	6-10 years	3.9/5.0
Jack in the Box Franchise	$1,697,000-$2,694,600	$50,000	5%+5%	$196,906-$283,545	7.5-11 years	3.5/5.0
Wendy’s Franchise	$2-$3.5 million	$40,000	4%	$ 330490 to  $ 440653	8 to 12 Years	3.9/5.0

Conclusion: Is Quiznos a good franchise to buy for sale?

With more than 4,500 locations, Quiznos was once one of the biggest franchise network throughout the nation. However, for a number of reasons, the company is progressively going out of business. The primary issue is likely the franchises’ low sales revenues. When a franchisee only earns $22,000 on average, it is not possible for them to remain in business. You would have to work a lifetime to make back your investment.  In addition to being outperformed by their rivals, Quiznos also made some disastrous business decisions that contributed to their massive downfall, making it one of the weirdest tales of restaurant failure in the nation. These decisions involved furious franchisees, an odd business plan, and record-breaking litigation. There are definitely lessons to be learned from this, and time will tell if they acted swiftly enough to rescue their company. Additionally, the franchisor itself is barely breaking even and has even lost a sizable sum of money in some years. This is detrimental for the franchisees because they lack a reliable organization to rely on. We cannot honestly suggest Quiznos to anyone. The contrary of what we desire for our readers is opening a Quiznos franchise for sale, which could result in struggle and little to no profit, review the disclosure document and agreement you decide to give application to buy.

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Frequently Asked Questions (FAQs)

1. Are Quiznos franchises profitable?

The majority of Quiznos franchises are not making money. You should review carefully if buying an existing Quiznos franchise for sale.

2. How much is the Quiznos franchise?

The new Quiznos can cost anywhere between $216,100 and $338,500.Although, they are not franchising now. You can buy an existing Quiznos available for sale. 

3. Is Quiznos a franchise?

Yes, Wendy’s is a franchise. Wendy’s is a franchise, meaning that the company does not operate any locations itself, but instead outsources the operation of its restaurants to independent business owners. This allows Wendy’s to scale its operations quickly and efficiently across the globe.