March 11, 2014
By Bob Coleman
Editor, Coleman Report
The once thriving 5,000 unit franchise sandwich shop has seen its numbers dwindle to less then 2,000, despite a market that is seeing the proliferation of Panera, Jimmy John’s and industry giant Subway’s 40,000 plus units.
The Wall Street Journal reports Quiznos is on the verge of bankruptcy.
Problems are numerous for the franchisor. Very unhappy franchisees, higher than industry average food costs, stiff competition and a cluttered menu have fueled numerous store closings.
And our Franchise Coleman Report paints a bleaker picture. Through December 2012, 31% of all SBA loans were charged off in the past ten years, well above industry average of 12.5%.
Jonathan Maze, our friend over at Restaurant Franchise Monitor says, “Quiznos wasn’t necessarily always discriminating about the suitability of its owners, factors in to its future viability.
“You’ve got to make sure your operators are profitable. If your operators are not profitable, eventually it comes home to roost. You’ll have angry operators. They won’t develop, they won’t build new units. Ultimately, you have a hard time attracting new operators.”