A Quiznos franchise owner posting as FQuiznos has voiced the frequent complaint of struggling Quizno operators: That heavy discounting and couponing makes it impossible for Quiznos franchise owners to achieve or maintain profitability. Quiznos franchise owners complain that this strategy is profitable for the franchisor – which makes money on marking up products sold to franchisees as well as royalties on gross sales – but devastating to its franchise owners.
On a Quiznos discussion post, FQuiznos wrote:
Quiznos wants to “increase franchise owner profitability” yet they keep mandating lower prices and mandating that we accept coupons on top of those prices as well. They lower retail prices and launch coupons at the same time. So a regular size prime rib which should sell at $8.49, now is at a regular price of $5.99. They launch a coupon for two dollars off and now you are selling a regular size prime rib sub for $3.99. Food costs remain the same so how is that going to increase franchise owner profitability. I think Quiznos just wants owners to close their doors, saves them the headache of dealing with failing stores and lawsuits. If they haven’t gotten this right in 27 years who says they will today.
FQuiznos maintains that Quiznos marketing department is so coupon-happy they’ve added coupon books as an actual product. FQuiznos explains:
Customer Purchases the book for $20, we’re supposed to sell it to them.
Then the coupon contains $50 worth of coupons, $25 worth of $5 off any order of $5 or more. Then the other $25 of coupons are for catering.
Running promotions that raise top-line sales – the amount from which royalty payments are derived – at the expense of franchisee profitability is always a sure way to create franchise owner discontent. After all, franchisees pay into advertising and marketing funds they expect to be used in their – not solely the franchisor’s – best interest.
What do you think? Do Quiznos franchisees have a valid complaint? Or is Quiznos advertising driving customers into their stores? Share a comment below.