News

Quiznos struggling with turnaround efforts

December 9, 2013

Quiznos has reportedly missed a loan payment and is negotiating to restructure some of its debt with creditors, some of whom have hired lawyers. According to a report published in the Wall Street Journal last week, Quiznos owes nearly $600 million.

The Denver-based sandwich chain embarked upon a turnaround effort nearly two years ago, but has continued to struggle. Among its hurdles is a tension-filled relationship with franchisees, many of whom have accused the company of requiring them to buy food from a subsidiary they say inflates prices.

In a memo sent to franchisees last week, CEO Stuart Mathis said a forbearance agreement with creditors has been designed to give the chain more time to reach a deal.

"We have reached an agreement with our lenders and equity partners, and look forward to continuing to work constructively together to establish a framework that will position Quiznos and our franchisees for future growth and success," Quiznos said, according to the WSJ story.

Quiznos had about 5,000 units in 2008. It currently has about 2,100 restaurants, of which 1,500 are in the U.S. Hundreds of domestic units are struggling and could close next year, the story said.

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