March 17, 2012
UnhappyFranchisee.com [RE: QUIZNOS: Epic Customer Vs. Franchisee Fight over $6.53 editor's note: based on new information, we have edited the original story, which remains in black type. New text appears in green.]
Have you ever been involved in a dispute that you just can’t let go of, even when it makes you look like a raving maniac to those around you?
UnhappyFranchisee.com chronicles many mutually destructive disputes that could have been avoided had both parties taken a step back, looked at the situation from the viewpoint of their “opponent,” then agreed to a mutually beneficial compromise.
[Read more on the Quiznos Sub Franchise]
How to create a lose-lose situation
According to a person who claims to be a Quiznos customer who witnessed the incident, the woman “parked her $70,000 Red Corvette across the handicapped parking space AND the handicapped loading/unloading clearance.”
“When she entered the store, she was clearly in a bad mood.”
According to the woman, she was in a great mood when she entered the Quiznos.
The woman ordered a Quiznos Large Cobb Salad.
A franchise owner wanted to sell her a Quiznos Large Cobb Salad.
The woman asked the preparer to put on a fresh pair of gloves.
The franchisee refused her request, saying it was unreasonable. explained that it wasn’t necessary, as the worker had just put the gloves on. The customer said she still wanted the worker to change to new gloves.
The franchisee complied, and had the worker put on new gloves. The franchisee stated, though, that next time he would not honor such a request.
Upset that the franchisee had questioned her (even though the salad was completed as she requested, the customer demanded her money back.
The franchisee refused to give her her money back.
A verbal dispute erupted. The woman claims she refused the salad and left.
A witness claims she threw the salad across the counter at the franchisee.
Afterward, both called the police.
The woman started emailing websites and posting complaints about the Quiznos franchisee.
She vowed to “pursue this matter in civil court and will ask for punitive damages…”
What turns rational, professional people into raving lunatics?
Initially, we thought this was a mildly entertaining story that illustrated how both sides of a dispute can blow things out of proportion, and cause each other unnecessary aggravation and damage.
After learning more from both sides, it seems we were wrong.
This now appears to us to be a story about how much abuse foodservice franchise owners must take from the occasional Customer-From-Hell.
Our sympathies go out to the Lenexa, KS Quiznos franchise owner who bent over backwards to please a rude and demanding customer, only to have his best efforts (literally) thrown back in his face, to be criticized on the Internet, and to have the police called on him.
Hopefully the woman will file her civil lawsuit to try to recover $6.53 plus punitive damages, and the laughter and publicity it generates will bring him much business and sympathy in the future.
What turns rational, professional people into raving lunatics?
In situations like this, it’s often a case of feeling disrespected.
I searched the customer’s name (which I’ve withheld), and learned that she’s a highly educated woman-of-color who has a government job and also owns a small business. It seems likely that, as a woman and member of a minority group, she has worked extra hard to achieve success and feels that she has the right to be treated respectfully when she is the customer.
Isn’t her patronage worth a few pennies worth of latex?
If a white business executive with a Rolex and expensive suit had asked for a fresh pair of gloves, would the franchisee have refused and told him he unreasonable?
At the same time, we know that Quiznos owners are highly stressed, with a parent company in financial distress and thousands of fellow franchisees having lost their investments, savings and some their houses. Quiznos franchisees are stressed about their thin profit margins, which have been strained by pressure from “dollar menu” competitors and a parent company that jacks up the products it sells to them, then advertises buy-one-get-one-free deals and “Million Sub Giveaway” promotions that eat up what little remains of their profits.
Don’t consumers care that coupons, discount prices and freebies are forcing local small business owners into bankruptcy?
Isn’t it enough that his employees wear gloves and prepare food in plain sight? Must he buy new gloves for every salad or sandwich? Where does it end?
The solution is simple when you follow the Rule
The customer is so incensed that she will waste hours writing long, passionate diatribes (see below) about an obviously (to everyone but her) trivial incident. Her overdramatization of the franchisee’s bad behavior (“outrageous and nefarious misconduct,” “theft, malice and reckless behavior,” “he is a thief; he stole my money, and caused public humiliation and embarrassment”) does not further her reputation as a emotionally balanced professional.
While she has every right to have Visa reverse the charge on her card, her threat of a civil suit (with punitive damages) over a $6.53 salad is, at best, silly.
Of course, the franchisee handled the situation as poorly as possible. Not only did he lose future revenue from a valuable customer over a few pennies, he created a lot of negative buzz about his store that will surely spread in the future. He sent a negative message to his staff that not only is the customer NOT always right, but it’s fine to tell them so to their face.
Unfortunately, the customer may be correct in saying “his reckless behavior, poor attitude, and lack of respect for customers is a high indicator that he will not be in business long.”
What’s striking is how easily this Lose-Lose situation could have become Win-Win with a single statement from either party:
The customer could have said: “I understand my $6.53 doesn’t cover it, so here’s 25 cents to cover the cost of the gloves.”
The franchisee could have said: “Be assured that we always do everything we can to provide a clean prep area. However, if it will help you enjoy your Quiznos salad, we’ll be happy to put on a fresh pair of gloves.”
Remember The Golden Rule?
The customer could have shown respect for the franchisee’s business by offering extra payment for extra service.
The franchisee could have shown respect for the customer and prepared her salad the way she wanted it, and probably gained a customer for life.
Are you engaged in a heated dispute? Take a step back and look through your opponent’s eyes.
There may be a simple, mutually beneficial compromise right in front of you.
HERE IS THE QUIZNOS CUSTOMER COMPLAINT WE RECEIVED:
Date: March 16, 2012: 1:30 p.m.
Subject: Outrageous misconduct and petty theft by a Quiznos manager
Location: Quiznos, located at 11099 Lackman Road, Lenexa, Kansas 66219
Food preparer: I placed an order (to go) for a large Cobb Salad and politely asked the Hispanic food preparer if she didn’t mind putting on a new pair of gloves before making the salad. The look on her face implied that she was somewhat disturbed about the request. She made eye contact with a short, white man, who had brown hair, a light beard and who appeared to be in his early fifties. He asked the food preparer what I had said.
The short man I interacted with demonstrated outrageous and nefarious misconduct. The nature of his wrong doing involved theft, malice and reckless behavior. Below is a precise account of the event.
Short man: (very defensive) “She just put those gloves on.”
Me: “I still would like for her to put on a new pair of gloves.”
Short man: “May I ask the reason why?”
Me: “I’m ordering food for someone else who is very meticulous.”
Short man: “We practice the highest standards of cleanliness and she just put on those gloves.
Me: “I want the salad made with a new pair of gloves.”
Short man: (harsh tone of voice) “We’ll do it this time, but next time we will not do it for you.”
Me: (offended) “You really should not say that, and in my case, the customer is right.”
Short man: (angry) “You’re wrong and now are you trying to tell me how to do my job?”
Me: (irritated and intimidated) “I don’t want the salad; refund the $6.53 back to my bank card.”
Short man: (arrogant) “I am not going to do it.”
Me: (upset but calm) “Why not, I don’t want the salad.”
Short man: “Because it’s already made.”
Me: “No it’s not; she’s still working on it.”
Short man: “You’re not getting your money back and you’re upsetting customers.” (other than me – only one customer was in the restaurant)
Me: “I don’t care about your one customer, you’re upsetting me, your other customer, and if you won’t refund my bank card then I will contact my bank and put a stop payment on the transaction.”
Short man: (very self -satisfied and sarcastic) “You would do that?”
Me: “I need to speak with the manager.”
Short man: (smug and proud) “I am the manager and I’m the owner of the store.”
Me: (disdainfully) “You’re really pathetic and I will never, ever come here again.”
Short man: (gives me the salad) “Get out of my store and you are never allowed to come back.”
End result I gave the salad back to the idiot and walked out, then after a few seconds I went back into the restaurant to ask for my receipt. He said that he had given it to me so I looked in my wallet, found it, apologized and left. Ten minutes later after arriving home I called the Lenexa Police to report the incident. The contact offered to send two officers to meet me at the restaurant to see if this idiot would refund my money but that they could not make him give it back because it’s a civil matter.
While I was on the phone with Lenexa Police, the contact said that someone from Quiznos had called the police to have someone put out of their store but that she was uncertain who the person was (probably me).
Summary The aggravating circumstance clearly involved a situation in which the short man acted foolishly, intentionally malicious, and with utter disregard of me as a customer. Additionally, he is a thief; he stole my money, and caused public humiliation and embarrassment in the presence of his two female workers and one male customer.
This individual is a lose cannon and something is seriously wrong with him. It is frightening to know that he is
the owner – if this is true. Owner or not, his reckless behavior, poor attitude, and lack of respect for customers is a high indicator that he will not be in business long.
Suspiciously, since the guy refused to refund my money and keep the salad too, business must really be hurting financially.
Last, this man is subject to treat other people like this and it is not right. I plan to pursue this matter in civil court and will ask for punitive damages to prevent this guy from acting out similar behavior in the future.
What do you think? Share a comment, example or observation below.
August 22, 2011
Just three years ago, [Quiznos] topped $2 billion in sales. Now, industry observers say the Quiznos sandwich chain, led by Denver investors Rick and Richard Schaden — is $875 million in debt, with sales down 14 percent and 600 stores closed last year. “It’s one of the biggest restaurant collapses in American history,” says restaurant analyst – John Gordon.
(UnhappyFranchisee.com) The Denver Post reports that the Quiznos chain faces tough finance issues, and may earn the distinction of becoming one of the biggest financial collapses in restaurant chain history.
UnhappyFranchisee.com has been reporting on the rancor between Quiznos corporate and its Quiznos franchise owners for years now. The Denver Post article cites a report that lists Quiznos adversarial relationship with its franchisees as a major factor in its current dire financial situation:
The problems stem from a highly leveraged investment in 2006, competition from other sandwich purveyors and a protracted battle with the company’s franchisees over operating costs and profitability.
The result is an estimated 14 percent drop in sales last year and the loss of 600 restaurants — the steepest decline of any major fast-food chain, according to restaurant consulting firm Technomic Inc.
Sales in 2010 were about $1.55 billion, down from the 2008 peak of $2.02 billion, Technomic estimated. During the same period, stores declined from about 5,000 to 3,500 and likely are fewer than 3,000 this year.
Quiznos took a big hit when rival Subway introduced toasted subs in 2005, effectively stripping Quiznos of its key differentiator.
Subway delivered another blow with its highly successful $5 foot-long campaign in 2008. Quiznos’ attempted counter-punch, the $4 “torpedo,” failed to bring back its lost customers.
Instead of working in a unified fashion to beat the competition, Quiznos has also been at war with its franchisees over price gouging and poor marketing strategies, especially in terms of discount promotions:
As Quiznos has fought to maintain market share, it has suffered lingering animosity from some franchisees who say profit margins are lean or nonexistent — due in part to a requirement that franchisees buy food at allegedly above-market prices from a Quiznos-mandated supplier network.
In 2009 Quiznos settled a franchisee class-action lawsuit by agreeing to pay up to $95 million.
The corporate debt problems are troubling to remaining franchise operators, said Justin Klein, a New Jersey attorney who represented franchisees in the lawsuit.
If Quiznos were to default on its debt and file for bankruptcy reorganization, “it would have a negative impact on the investment these franchisees have made in the company. It pretty much puts that investment into the toilet,” Klein said.
Quiznos seems destined to become a franchise restaurant chain cautionary tale, with the moral being that franchisor indifference to franchisee profitability and a callous disregard for the welfare of those who financed your growth will result in a catastrophic failure for all involved.
Quiznos had a great product, strong, enthusiastic franchisees and a golden opportunity to be a leader in the fast casual segment. What a shame it had to come to this.
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August 1, 2011
Unhappy Franchisee contends that Quiznos current misfortune is the result of Franchise Karma exacting revenge for past, well-documented misdeeds.
Usually these misdeeds were the result of a Quiznos corporate attitude that its franchise population was like a mountainside ripe for stripmining.
UnhappyFranchisee.com and other blogs have been documenting these misdeeds for years. We are revisiting these posts and discussions as part of our Franchise Karma is a B*tch series.
Today’s post is a rebroadcast of “Why Your Quiznos Won’t Give You a Free Sub.” published February 26, 2009 by Sean Kelly.
* * * * *
Why Your Quiznos Won’t Give You a Free Sub
February 26, 2009 by Sean Kelly
Why oh why would Quiznos announce a million sub giveaway, and then issue free sub coupons that your local franchisee won’t honor?
Because Quiznos’ amazing talent for shooting itself in the foot is surpassed only by the speed with which it reloads.
To put it simply, Quiznos corporate decided to give away 1,000,000 subs that weren’t theirs to give away. Quiznos not only expected its franchisees to foot the bill for the millions in food giveaways, Quiznos corporate would actually make money selling them the ingredients.
Ex-Quiznos franchisee Rich Piotrowski explains:
The reason so many Franchisees are not honoring this coupon is that the company delayed this promo TWICE, as many of the Franchisees said they would not go along unless Quiznos Corporate (which makes about a hundred million a year selling food to its franchisees, and prohibits them from buying food from anyone else) paid for the food in this promotion.
Late last week, Quiznos decided to roll it out anyhow saying no, franchisees would have to pay the entire cost. Every other system (such as Denny’s Arby’s etc) the cost of the promo was shared by both parties. In addition, most of those system sell food at cost to Franchisees. Like those other systems, Quiznos makes money by collecting a 7% royalty and 4% from franchisees which they say is for advertising. Unlike those other systems however, on top of those fees, Quiznos makes that hundred million IN ADDITION by selling food to them.
And you wonder why Franchisees are not honoring the coupon?
In related news, the SBA has released a report showing that Quiznos franchisees have the highest loan default rate of any franchise chain.
And Quiznos CEO Dave Deno has resigned and infamous Quiznos founder Rick Schaden has once again taken the reins to ensure that franchisees continue to get toasted to a crispy brown.
Comments on the original post:
I just went to Quiznos with my coupon in hand. I was greeted with all smiles until I mentioned the coupon. I was told they were not honoring it. I said it was OK and turned to leave. The cash register girl asked the guy making the sandwich(possibly the owner or mgr) if she could give it to me anyway since the sandwich was almost finished. The guy gave a frustrated look and just walked away, not finishing the sandwich preparation, just leaving it for the cash register girl to finish. It was supposed to be a honey bacon club with everything. I received a couple slices of ham with onion, that’s it! It looked pretty bad, and I didn’t trust eating it so I threw it out. I was made to feel like charity for this disgusting sandwich. That will be my last visit to Quiznos.
I just fired this off to Quiznos Corporate:
My husband and I took our little boy in to redeem our Free Sub from the coupon issued to me in your Million Sub promo. The man at the register said it had “already been used”, which is 100% false. They would not accept the coupon, and they kept the coupon since I refused to pay for what was supposed to be a free sub. He also said that they had many customers with the same problem who were very angry.
This promotion of yours is a DISASTER. One million outraged and disgruntled customers will tell another million people about what a scam you people at Quiznos pulled. If restitution is not made to our family, I can promise you that no one in our immediate and extended family will EVER set foot in another Quiznos as long as we live (or as long as there is a Quiznos, which, at this point, looks doubtful). I also will be visiting a great number of the consumer complaint websites, as well as registering a complaint with the Better Business Bureau and our NJ Office of Consumer Affairs.
I want you to call me directly. If I do not hear back from someone from Quiznos by the end of the work week March 6, my hand will be forced and I will be contacting the mentioned parties, as well as a friend at Business Week.
This entire experience was horrible. People in Quiznos were hearing everything I had to say about never ever returning to Quiznos, and frankly, the sandwich didn’t even look that appealing. The franchise in Wayne Hills Mall is not very welcoming anyway.
The way this Million Sub giveaway was handled is an bright shining example of how NOT to run a promotion. If it was meant to foster good will with your customers, you have failed miserably. Right now, Quiznos is Public Enemy Number 1.
That’s the problem in corporate America: Most think when getting a franchise everything is easier. Wrong. Putting a (real) entrepreneur into a franchise is like putting an creative artist in jail.
In my opinion only a few franchises are really worth it: Like McD, maybe Burger King and Wendys and maybe Subway (only because the brand is good).
Quiznos is the most stupid system. I remeber 2 years ago the TV shows “Own your own Quiznos” where corporate tried to sell a restaurant to almost everybody. If you are a good entrepreneur, save the money for the franchise and open your own individual store. You must be better than others!
By Carol Cross:
In the food wars and in the saturated “fast food” sector, the franchisors are fighting to compete and retain their market share with coupons and free stuff, etc.. Franchisees, as always, are calculated sacrifices to this competition.
The margins for the surviving Quiznos franchisees are very “thin” to begin with, but while it may not do anything for the franchisees, it does mean that increased traffic will increase the EBITDA for the franchisor who shares none of the overhead costs of producing free subs.
Quiznos, of course, is the poster franchisor for exploitation of franchisees. It is no wonder that many of their franchisees will revolt and not honor the coupons.
Sounds like there needs to be some restructuring of franchise and corporate law in this country…
It also sounds like that this country would be better off without any Quiznos anywhere…
C’mon – It’s a sub shop… Other sub shops have ovens now, and can toast your sandwich… The only thing that makes Quiznos different, is that they charge more for their food, and that the corporate office is willing to be a little more evil than average…
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July 31, 2011
Dear God, you are all-knowing and all-powerful. Your ways and Your Plan sometimes seem beyond our comprehension.
Like, for instance, how you are taking one of our kindest, gentlest retailers from us, while leaving the sub chain that has tortured its own franchise owners and the American public for years.
Borders let us sit in their comfy chairs, drink good coffee and read their books and magazines for free.
Borders made us smarter, more literate and better-caffeinated.
Quiznos tormented us with disgusting, singing rats, migraine-inducing cats, and workers who imply they had sex with the very ovens that toasts Quiznos subs.
Putting all else aside, Lord, doesn’t Quiznos deserve to be smited (and smited hard) for ANY of the three commercials posted below?
Spongmonkeys – Bug-eyed Vermin From Hell
In what universe could the disgusting “Spongmonkey” characters induce a life form to ingest a Quiznos sub?
Where, exactly, did Quiznos marketing executives get the idea that they could win the fast food wars by grossing out and annoying their potential customers?
The reaction to this commercial was so bad that, according to Ad Age, Quiznos franchisees posted signs on their doors saying they weren’t to blame for the bug-eyed rodents. Franchisees posted signs that directed complaints to Quiznos corporate. Quiznos franchisee Huey Mack reported to Ad Age that all comments were negative and the backlash was clearly hurting sales.
Singimals – Proof Quiznos Hates Us All
Cyphervirus wrote: “I’ve never wanted a cat to die before, until I saw this commercial…”
Soundsourz wrote: “There is no possible way that any serious business could ever think something this pathetically annoying would ever serve as good advertising.”
netsurferx1 wrote: I used to think that their commercial with those rat/hamster/gerbil things (way back in about 2003) was annoying. And then there was this.
Seriously, WHAT THE F*CK ARE THEY THINKING! And how the f*ck does this sell sandwiches in the first place, anyway?”
dpaanlka wrote: “I can’t believe Quiznos is still making ads like this. They’ve been trying the good old stuffed dead animal routine since at least 2003 and it has never, ever worked.”
fosbury68 wrote: “Quiznos announced layoffs at their corporate offices on 1/7/11. 69 people. Guess the ad didn’t work.”
Toasty Torpedo – Sex Sells. Gay Oven Sex Doesn’t.
Imagine the ad agency creative pitch for this commercial. The agency exec puts up the Powerpoint slide and says “Our research indicates that what consumers really want is to imagine a Quiznos worker inserting his penis into the oven used to toast their Mmmm toasty sub.”
Oven: “Scott, I want you to do something…”
Scott: “I’m not doing that again, that burned.” (looks at groin)
Oven: “We both enjoyed that.”
And a few lines later…
Oven: “Put it in me, Scott”
Seriously? How does one company make such bad advertising decisions so consistently for so many years?
WHAT DO YOU THINK? SHOULD GOD DELIVER US FROM MORE UNHOLY QUIZNOS ADVERTISING WITH A BOLT OF LIGHTNING? SHARE A COMMENT BELOW.
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July 28, 2011
Let’s start off with the alleged unreturned franchise fee scam.
On August 27, 2007, Sean Kelly published “How to Make $75 MILLION in 3 EZ Steps!” on the Franchise Pick blog. Instead of focusing on building successful franchises, according to Kelly, Quiznos used the franchise sales process to extract $75 million in unreturned franchise fees for stores that would never open.
* * * * *
How to Make $75 MILLION in 3 EZ Steps!
by Sean Kelly
How Quiznos invented the Everlasting Gobstopper of franchise fraud. Allegedly.
So, you say you want to make $75 million, but you have no special skills, work ethic or motivation? No problem! If you follow this secret formula and these three EZ steps, you will have $75 million in revenue in no time. And you won’t have to do ANYTHING to earn it. Guaranteed.
Three EZ Steps to Becoming a $75 Million-aire
STEP #1: Sell 3,000 sandwich franchises at $20-$25M each
“But I barely know how to make a sandwich, much less run a sandwich shop!” Enough with the negativity! I said sell franchises, not open franchises.
STEP #2: Include a deadline for them to open their sandwich shops
Using the magic System Q franchise agreement, your franchisees will agree that if they don’t find an approved location and open their shop within a given timeframe, you get to keep their money(!) Pssst… Guess who approves the locations?
STEP #3: When they fail to open, keep their money!
That’s right. You not only keep their money, but they’ll sign a release saying you are liability-free, and they’ll promise not to say any bad things about you. Send me 10%, then go buy a yacht!
Skeptical? Learn How Quiznos (Allegedly) Made $75 Million in 3 EZ Steps!
Janet Sparks (a kill-joy franchise writer who never could keep a secret) spilled the beans in a story on BlueMauMau.org. Seems some whiny franchisees continue to act like royal pains in the toasted buns. They’re combining their lawsuits into a Class Action Combo, and Supersizing their complaint:
The amended version alleges that Quiznos fraudulently induced prospects to purchase franchises at a price of $20,000 to $25,000 each, knowing that their stores would never open. It states that, according to Quiznos’ own figures, it sold more than 3,000 franchises that never opened, resulting in approximately $75 million in revenues for the franchisor, without providing anything in return to the purchasers.
The brilliant part (allegedly brilliant part, mind you) is that Quiznos can basically disapprove every location suggested, forcing the franchisees to fail to meet their obligations. Quiznos can then threaten to hold them liable for lost future royalties. The franchisee has no choice but to sign a liability release and an agreement to keep their stupid, ungrateful mouths shut (or else).
No here’s the brilliant part: The franchisor can then resell the same territory again and again and again and again to unsuspecting franchisees who have no way of knowing it was sold before… making this the Everlasting Gobstopper of franchise fraud! Allegedly!
Original comments on this post:
1234 days ago
It’s amazing they have gotten away with such obvious un-ethical business practices. Until the government really sees and acknowledges this as evil and as a scam to get the honest working people of our countries money nothing will be changed. There should be stricter laws that throw out one sided UFOC’s. Until this is accomplished it will allow these crooks to get away with robbing people. How many people does it take before our government changes the laws to stop all this insanity? All I hear is do your due diligence. I believe it begins with laws to protect the honest individual. Let’s face it the honest person doesn’t think like a crook. You have to think like a crook to be a crook. Isn’t that why we have laws to protect the people?
1234 days ago
Barb said:Until the government really sees and acknowleges this as evil and as a scam to get the honest working people of our countries money nothing will be changed.
I agree with everything you’ve said except that nothing will be changed until the laws are changed. The Internet and sites like franchisepick.com, bluemaumau.org, Michael Webster’s biz op blog, Franchise Pundit, Joel Libava’s Franchise King blog, Rip-off report, franchise chat forum, and provide a forum and unfettered discussions that have never existed before. While the laws certainly should change, consumers have a lot more information and caveats as to scams, ripoffs and bad deals – franchised and non-franchised.
People need to realize that the government will not protect you from bad business deals, and even fraud. Look at late night tv: Phony preachers hawk donations with fake faith healing, tons of get rich quick and weight loss scams are sold using fake testimonials by actors reading from a script, famous people push exercise gadgets, investments, insurance scams, adjustable beds at 3X retail and snake oil. It’s not likely to change soon.
The franchisees and ex-franchisees who leave comments about their experiences are making a difference warning others. Until these laws change, prospective franchisees should pay an experienced franchise attorney to review any document before signing.
1229 days ago
I agree you should see a franchise lawyer. But you have to agree the average person who never had to use a lawyer before doesn’t even know there is such a thing as a franchise lawyer. Usually people who look at site’s like this is after the crime is over. People need protection because it takes an incredible amount of time to understand what the franchise world is about. Not everyone knows as much as you Sean. The average person needs protection by enforcing bad franchises to disclose all material facts. More laws to protect the honest hard working person who doesn’t know how the franchising world works. You have to admit there are few good franchisors. And that is why we need laws so ethical business practices will be enforced. Just read all the complaints on the internet. Consistant, real and disturbing that the unethical franchisors get away with misrepresentation, non-disclosures and exagerating material facts.
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July 28, 2011
Quiznos is struggling under a debt load in excess of $850 million. 1500 franchisee-owned Quiznos stores have closed.
In May, 2011 store sales fell by 13%. Quiznos is at risk of violating lending terms that require a certain level of earnings.
Quiznos, of course, blames the economy.
But Quiznos franchisees and readers of UnhappyFranchisee.com, BlueMauMau.org and the former Franchise Pick know better.
They know that Quiznos is finally answering to The Law of Franchise Karma.
What’s the Law of Franchise Karma?
The Law of Franchise Karma states that franchise companies who treat their franchisees as sheep to be sheared, marks to be conned or mountainsides to be strip-mined will eventually have to answer for their misdeeds.
Franchise Karma will be their to hold them accountable.
And Franchise Karma is a B*tch.
Franchise Karma has come a’calling, and Quiznos will now publicly answer for its misplaced priorities, corporate greed, unethical behavior and a seemingly complete disregard for the well-being of the franchise owners who built the Quiznos – and the Schaden – empire.
What are the misdeeds of Quiznos corporate?
In the next few posts, we’ll dig into the archives and post past warnings that Quiznos corporate was acting as stripminer, pirate and plunderer rather than a responsible franchisor.
Read the “Franchise Karma is a B*tch” Series:
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June 25, 2011
(UnhappyFranchisee.com) Know of any Quiznos Sub franchise locations that have closed or are closing soon? Share a comment below, or email a picture to unhappyfranchisee[at]gmail.com.
The Quiznos Sub franchise opportunity may seem like a safe, risk-free investment because of the well-known brand name, the great product and positive media hype (which includes rankings and awards from publications that survive on advertising from franchise companies like Quiznos).
Some Quiznos Sub franchise owners may have a different opinion on how risk-free buying a Quiznos Sub franchise really is. A Forbes article “Where You Might Not Shop In 2011” reported:
Stores closed: Aproximately 1,000 (analyst estimate; company won’t confirm)
Percentage of total: 22.7%
Struggling as a higher-priced alternative to Subway, the sandwich chain began putting mini-stores into gas stations to boost market share. Upscale fast sandwiches are a tough position in a down economy.
Here is a growing list of Quiznos Sub franchise investments that didn’t end so well:
The contents of Quiznos Sub, 2319-A Hanover Pike, Hampstead, MD 21074 were auctioned off Tuesday Febuary 1st, 2011 by Rasmus Auctioneers.
Quiznos Sub, Eldersburg, MD
According to a December, 2010 post on the Eldersburg Patch: “A manager of another nearby business… put it more bluntly saying, ‘he just wasn’t making any money.’ Assets of the sandwich shop were sold in an online auction Nov. 23 by Rasmus Auctioneers.”
Quiznos Sub, Santee, CA
From the Santee Patch, June 21, 2011 “Quiznos Subs shop left a sign posted at the entrance which indicated the downturn in the economy was the main factor in their closing.”
“Dear Valued Guests,
Due to the recent economy and recession, we have regretfully closed our business. We appreciated your business over the years.
Sincerely, Jim and Diane”
Photo credit: Scott Sinclair
Quiznos Sub, Elgin, IL
“Within the last nine months, three downtown restaurants have closed and remain vacant: Quiznos, Mad Maggie’s and RoadHouse/Main Event” June 22, 2011, The Courier News.
Quiznos Sub, Hyattsville, MD
“Update June 8, 2011: After reading the scrawled ‘Closed’ note posted on the door of the Quiznos store at the Shoppes at Metro Station, one might think the manager had simply stepped out for a lunch break. But after about a month of zero activity at the sandwich store, the truth is firm: this sub shop’s ship has sailed.”
In a comment on the Hyattsville Patch story, The Kid wrote:
Quiznos corporate makes its money selling food and supplies to its restaurants at inflated prices… This chain had nearly 6,000 restaurants in 2006 and a tad more than 2,000 now. It’s a loser to everyone except Dick Schaden and the Wall Street fatcats who own it.
“Five months after it reopened to much fanfare, the Quiznos in Bennington Square is once again closed. Tuesday’s closing came as a shock to the sandwich shop’s employees, who learned Friday they would be losing their jobs…” Quiznos Closing Shocks Workers, Tuesday January 11, 2011.
Quiznos Sub, Virginia
”Quiznos is closing down!! by Hannah_Banana222 on Thu Jan 13, 2011 2:30 pm My brother works (well, worked) there, and they told him it was closing on the very last day it was open. No notice whatsoever. Not nice.”
Quiznos Sub, El Cerrito, CA
“Quiznos Sub – CLOSED 10810 San Pablo Ave, El Cerrito, CA 94530, (510) 527-7827” Source: Yelp
Quiznos Sub, Ocean City, MD
See photo. Closed Quiznos shot while on vacation.
Quiznos Sub, Boston, MA
“The Quiznos sandwich shop at 263 Huntington Ave., between Symphony Hall and Gainsborough Street closed Nov. 4, eliminating an eating choice near the Northeastern campus.” The Huntington News, November 11, 2010.
Quiznos Sub, Bloomington, IL
“A Lexington business owner who recently closed his Wings Etc. restaurant and bar has also shuttered his two Twin City Quiznos locations. The Quiznos franchises, at 2601 Oakland Ave. in Bloomington and 1700 E. College Ave. in Normal, had been the only two in the Twin Cities, according to the sandwich-shop chain’s website. A sign on the Oakland Avenue store’s door last week read, ‘Sorry, we are closed for business.’ The Quiznos franchise owner was Greg Wilson of Lexington, doing business as Gregors Enterprise Inc….” Pantagraph.com, January 6, 2011.
“Quiznos closes doors, no reason given. Quiznos of Williston closed its doors on Saturday, and it’s unclear if the sandwich shop will reopen. One of the owners said he couldn’t comment on whether the restaurant would open again due to corporate policy restrictions… Quiznos, which first opened in Williston several years ago, had closed before for a few months last year and re-opened July 30, 2010.” Williston Herald, April 20, 2011
Quiznos Sub, Garden City, Kansas
Quiznos’ time in Garden City has come to an end. The franchised sandwich shop closed its doors Friday after more than 13 years in business and will be converted into another sandwich shop, Subway… owner Clark Nelson chose not to renew the rights to his location…
Business over the years has had its “severe ups and downs” and the restaurant had been busier than normal as the closure approached, Nelson said.
“We’re tired of it. It’s been a long stretch,” Nelson said. “We’re ready to do something else.” GC Telegram, 1/1/2011.
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Email Quiznos Sub closing photos to unhappyfranchisee[at]gmail.com
March 4, 2011
After eight years in business, Quiznos franchise owners Joe Follrath and Suzanne Pfaff said they’ll shut their doors for good next week “unless someone makes us a last-minute offer to buy the place.”
The Douglas Avenue sandwich shop, which has been in business downtown for eight years, will stay open until it runs out of stock, which probably will be by the end of next week, they said. The owners plan to hold an auction sometime thereafter.
The Quiznos franchise owners have been looking at options for about six months but the business is no longer financially viable. They plan to hold an auction once they run out of stock.
In addition to the tight economy and downtown construction, Quiznos onerous company policies helped cause shrinking margins tight and dwindling profits. According to the article:
“We originally chose to open a Quiznos franchise because of the company’s growth potential and the quality of its products,” said Follrath. “We did great business for the first few years, but sales have been swiftly declining since we hit our peak in 2007.”
According to information provided by Elgin’s Downtown Neighborhood Association, with the recession on the horizon, between 2007 and 2009, more than 1,000 franchisee-owned Quiznos closed.
“Franchisees cite rising Quiznos-distributor food costs, drastic coupon discounts such as buy-one, get-one-free sandwiches, and other corporate policy decisions,” the release stated. “Currently, Quiznos is requiring its franchisees to undergo a complete interior renovation and point-of-sale system upgrade.”
Tonya Hudson, executive director of the Downtown Neighborhood Association, said she is amazed that the Quiznos franchise owners persevered as long as they did, calling it “a testament to the loyal customer base they built in downtown over the past eight years.”
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April 26, 2010
November 17, 2009
Discount promotions are one of the most contentious areas of the franchisor / franchisee relationship. (Especially when it comes to Quiznos)
The reason is simple: Franchisors make money off the gross sales of their franchisees, regardless of franchisee profitability. Some franchisors make additional money marking up ingredients and food products to their franchisees. Public franchisors benefit from higher sales – and stock prices – that are not tied to franchisee profitability.
SmartMoney.com surveyed franchisees from different franchise chains regarding the cost to them of some current and recent promotions. The Smart Money article points out that franchisees generally bear the brunt of a promotions’s cost, including the food, labor, rent and utilities, among other things.
One of the most contentious examples was the Quiznos Million Sub Giveaway. Here’s the Smart Money finding for Quiznos, which report a $2.25 loss per sandwich:
Promotion: Million Sub Giveaway – The first million people to register for Quiznos’s Q Club received a coupon good for any sandwich. (Certificates for this promotion expired by March 15, 2009.)
What some stores normally charge: $5.29 (one six-inch chicken sandwich)
Promotion Price: Free
Bottom line for restaurant: Loss of roughly $2.25 a sandwich
"The response to Quiznos’s Million Sub Giveaway was tremendous — with all one million free sub certificates requested within three days of the launch," says a Quiznos spokesperson. While Quiznos claims to have reimbursed franchise owners for food and paper costs, which amount to roughly $2.25 for, say, a chicken sandwich, other costs including rent, utilities and labor fell to individual franchisees — leaving some franchisees with an average loss of roughly $2.25 per sandwich, according to a franchisee in Maryland.
WHAT DO YOU THINK OF QUIZNOS PROMOTIONS? SHARE A COMMENT BELOW.