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Date Submitted: 05/08/2016 02:31 PM
Quiznos Gets Toasted: Exploring the Decline of Quiznos Corporation
Quiznos Gets Toasted: Exploring the Decline of Quiznos Corporation
History
In 1981, Quiznos Corporation opened their first sub sandwich shop in Denver, Colorado. The Quiznos concept and menu was created by restauranteur Todd Disner and chef Jimmy Lambatos. Their toasted subs, specialty recipes, and quality ingredients made them immensely popular. Two years after opening, the company began franchising, and in 1991 Quiznos had 18 locations. Also in 1991, the company was sold to franchisees, father and son duo, Rick and Richard Schaden.
The Schadens were motivated to grow the company; and by 2007, Quiznos had more than 5,000 locations and was one of the fastest growing restaurant franchises. The speedy growth can be attributed to marketing initiatives, reduced franchise start up costs and hiring Area Directors. Area Directors were hired to oversee specific markets, and they were allocated a certain amount of new franchises to develop in a predetermined amount of time.
As quickly as Quiznos rose they seemed to fall just as fast. “Things came to a head in 2006, when about 10,000 of the chain’s franchisees filed a class action accusing the company of overselling its markets and making its franchisees “captive customers.”” (Strauss, 2015) The unsatisfied franchise owners combined with the highly competitive market was a recipe for disaster. In 2012, a group of creditors insisted a restructuring of the company, which allowed them to take control of the company. In order to lower their debt, Quiznos filed for Chapter 11 bankruptcy in 2014. The early success of upstart franchises like Firehouse Subs and Potbelly contributed to the downfall of Quiznos. There are approximately 1,500 Quiznos still operating today, but Subway continues to be the king in the sub...