Brief Summary
This video explores the rise and fall of Quiznos, a once-dominant sandwich chain that experienced a dramatic decline in the late 2000s. The video highlights the company's flawed business model, which prioritized growth and profit over franchisee support and product quality. This led to a series of lawsuits, a franchisee revolt, and ultimately, bankruptcy in 2014. Despite attempts at a turnaround, Quiznos continues to struggle and has significantly fewer locations today. The video concludes by questioning whether Quiznos can ever make a meaningful comeback.
- Quiznos was a successful sandwich chain that dominated the industry in the 1990s and early 2000s.
- The company's rapid growth came at the expense of franchisee support and product quality, leading to a series of lawsuits and a franchisee revolt.
- Quiznos filed for bankruptcy in 2014 and has struggled to recover, with a significant reduction in locations.
The Rise of Quiznos
The video begins by introducing the founders of Quiznos, Jimmy Lomatos and Todd Disner, who opened the first location in Denver, Colorado in 1981. Prior to Quiznos, they owned a fine dining Italian restaurant called Footers. They developed the concept for Quiznos based on their experience with Italian food, offering submarine sandwiches, soups, salads, and pasta dishes. A key differentiator was their toasted sandwiches, which melted the cheese and enhanced the flavor of the meat and bread. This concept proved popular, and Quiznos began franchising, leading to rapid growth.
The Shadon Era and the Beginning of Trouble
In 1991, Lomatos and Disner sold Quiznos to Rick Shadon, a franchisee who already owned three locations with his father. The Shadons prioritized growth and quickly expanded the company, taking it public in 1994. By 1997, Quiznos became the third-largest sandwich franchiser in the world, behind Blimpy and Subway. However, this rapid expansion came at a cost. The Shadons formed a subsidiary called American Food Distributors, which required franchisees to purchase their food and paper products exclusively through them. This subsidiary allegedly marked up prices, making it difficult for franchisees to turn a profit.
Franchisee Revolt and Bankruptcy
By the mid-2000s, franchisees began voicing their concerns about the high cost of supplies and the lack of profitability. They felt that Quiznos was taking advantage of them and began filing lawsuits. In 2007, Quiznos faced a massive franchisee revolt, leading to a settlement that provided over $26 million to franchise owners. The Great Recession of 2008 further exacerbated the situation, leading to the closure of over 2,000 stores between 2008 and 2012. In 2014, Quiznos filed for bankruptcy, reporting $875 million in loan obligations.
The Aftermath and Uncertain Future
Despite attempts at a turnaround, including a grill concept launched in 2015, Quiznos continued to struggle. In 2018, High Bluff Partners acquired the company, but the situation has not improved significantly. As of today, Quiznos has significantly fewer locations than it did in its peak years. The video concludes by questioning whether Quiznos can ever make a meaningful comeback, suggesting that the company's failure was not due to the quality of its food but rather the lack of care for its franchisees.
