QUIZNO’S: Rick Schaden, CEO… He’s Ba-a-a-ck!
February 24, 2009 by Sean Kelly
Filed under Business
Quiznos has announced that CEO Dave Deno has resigned and the franchisor’s founder and largest shareholder, Rick Schaden, is taking over the reins again as the chief executive.
Deno had joined Quiznos as president in 2007 and became CEO last September. The company statement said he resigned “for personal reasons.” Schaden had stepped down from day-to-day operations in 2007 after growing the chain from 18 franchisees in 1991 to more than 5,000 today.
In a released statement, Schaden said:
“I am excited about working closely with franchise owners to improve restaurant operations. I also look forward to spending time with the outstanding Quiznos management team developing new products. Moving forward, our strategy will be exactly as it is today. Our primary focus will be on increasing restaurant profitability for our franchise owners by bringing value and convenience to consumers so that they frequent Quiznos more often.”
Quiznos is one of the most controversial major franchise players in the nation. According to franchise site Blue Mau Mau:
The Quiznos system has been riddled with problems and litigation over the past seven years. According to some lawsuits, franchisees allege that the company has been engaged in illegal and deceptive business practices, inducing unwitting prospects to purchase and operate Quiznos stores. The documents state that with 4,636 franchises in the U.S. today, a number that is continuing to grow, Quiznos classifies the majority of its franchisees as financially distressed.
WHAT DO QUIZNOS FRANCHISEES, INVESTORS & PUNDITS THINK OF QUIZNOS & SCHADEN’S RETURN? SHARE A COMMENT BELOW.
Why is it we hear no peeps from the fleeced sheep?
Is the silence of the lambs at work here? Dead lambs are beat and don’t bleat!
Will the 2006 securitization borrowing of millions of dollars in which Quiznos was acquired by private equity investment firms further work against the franchisees, who, as Richard Solomon, of Franchise Remedies, indicates will be at the end of the line in any lawsuits, etc.. Richard Solomon, a franchise attorney, apparently speculated on another website that Quiznos might be in serious trouble and he states that he already had a nasty Email in response.
Apparently, in “securitisations” even when the franchisor servicer fails into bankruptcy, the contracts of the franchisees remain in full effect and the royalties must continue to be paid on to the “true owners” of the franchise contracts to allow reorganization under Chapter 11. Apparently, the interim managers of the system are designated in the original terms of the securitisation agreements to protect the investors, and the creditors of the bankrupt franchisor can’t touch the royalties, supply fees, etc.. that are now the property of the investors.
Looks like business is good for the lawfirm of Quick, Steele, Hyde, and Bail—–huh!
Quiznos has fired all of the field team and rehired a few to inspect stores ? They pay them so much per store to inspect and no fringis’. A sign of trouble. They stopped the contacts almost all together with everyone.- No communication – Another sign of trouble brewing. Have gone wild with coupons to boLster the volume so that they can continue to get the 7% royalty and the kickbacks to give them income – To heck sith the store owner – STORE OWNER foots the bill for the high discounts for coupons! Like 76% food costs when acceptig a coupon That smells like trouble also. A store can opt out of accepting coupons if they post a sign in the window |They stop and start ads spasmodically !!!!! They sure need public relations and store owner relations and they have neither. More store closings, more banksruptcies, no new stores IT ALL SMELLS LIKE TROUBLE !!
My store went bankrupt. Quiznos didnt care and they didnt even call to ask any questions. Banks, Credit Card companies, and other investors lost thousands of dollars as well as myself. Quiznos walks away with all the cash and didnt care about any of the people who lost everything.
Quiznos took all of my lifes savings. They lied from day 1. They never ever lived up to any of their committments and their figures were the furthest thing from the truth. They were not accountable for anything that they had did wrong and my lord they did alot wrong. I would not advise anyone to invest any money with this terrible organization. When you deal with Quiznos (SCUMBAGS) you are dealing with the bottom of the barrell. You are the last to get paid but the first to go down when the shit hits the fan. Now my Credit is ruined and hundreds of thousands of dollars are thrown away or actually now reside in a Quiznos bank account. I hope you do your homework before ever investing with these Scumbags.
As always, there are two sides to every story. While it is true that Quizno’s runs a very sketchy franchise system at best, there are people who get into the business without doing their homework. While I was a franchisee, in a market where not one of the 6 stores were profitable, people still bought into the Quizno’s dream. On the rare occasion that a potential franchise would come to me and ask me my opinion, I would tell them to save their money. I would tell them about all the evils of Quizno’s corporation. I would tell them about escalating costs. Then, 2 months later they are the newest franchisee in town. Then 6-9 months later they are crying and blaming Quizno’s…
I have did all of my homework and then some. You cant forsee certain things happening no matter how much homework you do. They truly did do much wrong. They told me I would be opening in the early summer and they changed my opening date in excess of 10 times. They opened me 1 week before Xmas. I ended up paying $500 for insurance for 8 days coverage by the time I opened. I really could go on and on with the ridiculous schemes these Scumbags pulled off, and I will as soon as I find if I have a lawsuit or not. They certainly are a nicer organization before you buy as opposed to after you purchase. They told me my store would sell north of $15000 a week when my store was selling only $5000-$6000 a week they had said to me “What do you want us to do”? They dont care that your life savings are totally gone. I just hope I can hold them accountable for all of the stuff they had done.
Quiznos.
I have so much to say as a franchise owner.
But I will limit myself to this:
Quiznos is a horrible franchise which I advise not to frequent as a customer, or potential franchisee.
CORRUPT!
Yeah it is true. As a franchisee I was treated very poorly. This organization doesnt care anything at all about its franchisees. You really will have a very tough time making enough money to pay for the overpriced equipment that they sell you. They are not responsible for anything they do to franchisees. There crew are just miserable and will not do anything for you except try to put things off and hope you forget about it all. The stories are true and I really see this franchise as failing and heading into a bankruptcy. I would not invest in these guys. Invest in something that will make you some money and earn you a return on your investment.
I don’t get how you guys are selling 5-6k a week and not making any money. I own a Frozen Yogurt Shop. My biggest selling month was 12k FOR THE MONTH in July. I’ve had 1 month where I sold only 2k and some 4k in the dead of winter yet I am making a profit and no where near going out of business. If I sold even 3-4k a week for the year, I would be swimming in moolah; you guys make me wonder.
Plain and simple chad. overhead is much much more for Quiznos then it is for your yogurt shop. I had $350,000 in bills to pay with quiznos… break even of about 10,000 a week… your ice cream shop can break even much cheaper.
They are selling Quiznos in Houston for $12,500 down with fininacing for $37,500. Can money be made with little buy in?
I am serious. I would NOT touch a Quiznos with a 10 ft pole. If it were really a good franchise why would someone want to sell it for so cheap. They cant wait to get out. It is a money pit. I would be shocked if the whole organization doesnt go bankrupt. Too many closures. BE CAREFUL
Please run as fast and as far as you can from any Quiznos franchise purchase. I’ve had a number of successful businesses over the years so I know how to read financials. I spent 3 months in the summer of 2006 going over the numbers of an existing Quiznos franchise in Omaha. I bought it relatively inexpensively at $83k, or so I thought. It actually had decent numbers but I was later to find out that they were pretty much BS. After 6 months I was consistently one of the top 2 grossing stores in the area. This was out of about 25 stores.
I came to quickly realize that with the 11% royalty 38-40% food and paper costs (not 28.5 as it should be)and many other operating expenses etc, etc etc, there was absolutely no way to make any money even if I was to keep grossing more. My best week was about $11k but most times I was averaging 6500 to 7500 per week. My break even was around 8500. To make a long story short, I kept losing more and more money and finally filed for bankruptcy. In the time I closed my store in May of 08, 7 more stores in Omaha closed their doors and I’m sure were still counting.
I would dearly love to sue the hell out of them and maybe still will if I can join a class action suit. I really felt I was an experienced businessman but now merely feel stupid and broke. I’m thinking the execs at Quiznos in Denver have plenty of money, mostly from bankrupt franchisees.
Good luck to those of you who don’t heed advice from those who have been there and lost it.