DENVER — Quiznos U.S. has filed for bankruptcy protection and is planning to tackle its $400-million debt by pursuing a “pre-packaged” restructuring plan.
The Denver-based company is said to be seeking a US$15-million loan from its senior lenders to continue operations as it restructures. “Our business plan includes several key elements aimed at supporting our franchisees, including reducing food costs, implementing a franchise owner rebate program, in certain circumstances making loans available to franchisees for restaurant improvements [and] investing in advertising to improve location awareness,” Stuart Mathis, CEO of Quiznos, said in a statement. The company also clarified that only seven of the chain’s 2,100 restaurants are part of the Chapter 11 proceedings, and the rest, which are owned and operated by franchisees, will remain open as usual.
Industry pundits say the company’s aggressive focus on new menu features, coupled with intense competition from fast-casual contenders, spells out trouble for the chain. “They expanded too fast, they had a weak franchisee network,” Bob Goldin, EVP at Chicago-based Technomic Inc., told The Financial Post. “Once the Paneras of the world came along, I think, many consumers thought that was a better quality price point. And Subway came in on the lower end and aggressively promoted themselves as fresh.”