Quiznos did everything wrong and absolutely deserve their failure they are tasty they are crunchy they are because they them known for their signature toasted Subs Quiznos dominated the sandwich industry from the time they opened in 1981 to the mid 2000s at their Peak they had 4,700 locations an astonishing number even today to put their size into perspective Jersey miks and Firehouse Subs today operate a combined 3,100 locations Quiznos was huge during their Heyday they made billions in annual revenue and gave Subway a run for their money now that's far from the case in 2023 Quiznos operates less than 400 locations from 2007 to now their business shrunk by 90% And this collapse is Far and Away the biggest failure in the history of fast food the current state of Quiznos is sad however with hindsight it's clear they had a flawed business model from the start in 1981 business partners Jimmy lomatos and Todd disner opened the first Quiznos location in Denver Colorado but before starting Quiznos Jimmy and Todd got their start in business when they opened a fine dining Italian restaurant called Footers in 1978 while operating Footers Jimmy and Todd had an idea to start a new restaurant with a whole new concept their idea for this new restaurant was similar to that of Footers yet instead of fine dining they sought to create an Italian style deli in footer's kitchen they formulated the brand concept and menu for Quiznos using their knowledge of Italian food they developed a full menu including submarine Sandwiches soups salads and a few pasta dishes they invented recipes for red wine vinegar dressing and for their trademark soft baguette instead of using chopped and formed Meats they opted for Quality cuts of whole muscle meat including capicola and Genoa salami but most importantly before adding any vegetables they toasted the sandwich to melt the cheese and bring out the flavor of the meat and bread the concept of a toasted sandwich was an immediate hit and customers fell in love with what at the time was a unique idea from here Quiznos began franchising and that's where the first signs of trouble began to show by 1991 10 years after opening the first Quiznos Jimmy and Todd had a total of 18 locations each one averaging about 27,000 per month in sales from the outside looking in everything looked great and their future looked bright however just below the surface the business was crumbling though Quiznos as a franchise continued to grow it did so without improvements to individ idual restaurants and the product quality at some locations deteriorated and unfortunately Jimmy and Todd didn't have the money or expertise to address these issues and were unable to provide support to existing franchisees so in January 1991 Jimmy and Todd made the difficult decision to sell the company they sold it to a franchisee named Rick shadon who already owned and operated three locations with his father dick shadon by this point Rick had already been involved with Qui quos for about 4 years the shadin For Better or Worse made Quiznos what it is today from the GetGo The shadin Wanted growth which is of course understandable however the issue was how they went about achieving growth they immediately began building an infrastructure that would promote growth and profit over everything else just 2 years after buying the company they increased their annual sales from 7 million to 8.5 million and they doubled their locations from 20 to 40 it took Jimmy and Todd 10 years to reach 18 locations and the shatons more than doubled this in 2 years encouraged by their immediate success the shatons took Quizno's public in 1994 raising $4.4 million for the company the following year in 1995 Quiznos opened their hundredth store and by 1997 they became the number three sandwi franchiser in the world just behind Blimpy and then Subway from here they continued ramping up the rate they opened new restaurants until they reached a staggering 1,000 locations by the year 2000 once again from the outside looking in things looked fantastic franchisees were seemingly making money and had little to complain about but that was all about to change because unfortunately at this point Quiznos made the awful decision to form a subsidiary also known as a company owned and controlled by them called American food distributors franchisees had no choice but to buy their food and paper products through this company and all the products were allegedly marked up so high it became near impossible to turn a profit and the shatons did nothing to alleviate this problem for franchisees they did the exact opposite at some point along their business Journey the shaton family realized they can make way more money selling supplies to franchisees Via American food distributors than they could earning royalties according to an article by wolf of franchises in Peak years American food distributors made $200 million in Revenue while royalty Revenue was roughly 70 million and all the profits made from this allowed for even more growth because between 2002 to 2004 Quizno's ballooned from 1,700 locations to 3,300 locations around the mid 2000s franchise owners began voicing their concerns when National promotions mandated they offer low prices but they had to pay above market prices for their supplies franchises became fed up with not making enough profits and started suing Quiznos one lawsuit cites a memorandum drafted by a Quizno's lawyer in 2003 that stated 40% of Quizno's units are not breaking even a fact that prospective franchisees say they were never told franchise owners felt scammed when their franchises weren't performing the way they had hoped they felt like Quiznos took advantage of them you also have stories of people like Alisa White Hall who say that 3 years after handing over her check for the licensing fee she had yet to open a Quiznos in the location she bought and Quiznos refuses to return her $25,000 license in fee according to a lawsuit from 2003 to 2005 Quiznos collected about $7 million in fees from the 350 franchising licenses that it sold but never found locations for in 2005 to add insult to injury Subway launched two fatal attacks on Quiznos number one they added toasts to all of their locations and number two they kicked off their $5 foot long promotion now Quiznos had no unique marketing angle for their sandwiches in thousands of locations that were bleeding money on top of this Subway's marketing was phenomenal and Quiznos was not even though Subway's mascot Jared aged poorly and sucks it was nonetheless a successful campaign that shaped everyone's perception of subway subway had Jared and Quiznos had sponge monkeys and it only get gets worse from here on out in 2006 in a leveraged buyout Quiznos further sealed their fate when they sold 49% of the company to a private Equity Firm called CCM Capital Advisors this leveraged buyout left Quiznos with hundreds of millions of dollars in debt on top of every other hardship currently going on in the company but oddly enough their massive debt paled in comparison to what happened next in 2007 wios hit their Peak at 4,700 locations but unfortunately that same year they also hit their Peak number of franchisees suing them this article by Janet Sparks further illuminates the situation Quiznos encountered a franchisee Revolt so vast that it has been forced to settle following years of litigation brought by literally thousands of its franchise owner operators last Friday Judge Rebecca r palmier filed an order and dismissal in federal court that brings a close to the lawsuit the deal promises to provide over $26 million to Quizno's sub sandwich shop owners and to the system as a whole after the lawsuits which prompted many franchises to close their doors Quiznos encountered the Great Recession of 2008 with stores already struggling the recession was effectively the final nail in their coffin from 20 8 to 2012 Quiznos closed over 2,000 stores if you do the math that's over one store closure every day for 4 years as more stores closed the system they built began to crumble and weaken fewer stores meant less revenue from franchisees going to their marketing budget which meant less eyes on their products overall they were growing weaker each day losing stores losing money losing everything finally in 2014 after putting it off for as long as possible Quiznos filed for bankruptcy on March 14th 2014 they reported $875 million in loan obligations 2015 was truly the beginning of the end at this point they had less than 700 stores open with more to close in the future however that same year they launched a grill concept is part of their turnaround plan this turnaround plan and Grill concept failed within a year and franchisees continued to lose money and close more stores 3 years later in 2018 a private Equity Firm called High Bluff partners for some reason purchased Quiznos Quiznos is an iconic brand with room for growth Jerry Lopez High Bluff operating partner said in a statement we are excited about the acquisition well it's been 5 years since High Bluff Partners purchased Quiznos and about the only thing that's changed is they have about 40 Less locations now as of right now Quiznos has 176 Us locations and 183 International locations it's possible that in our lifetime we'll see this restaurant go completely extinct and it's sad because unlike Subway people never complained about the quality of Quizno's food Quiznos didn't fail because people hated their food they failed because the people in charge couldn't care less about the health and well-being of their franchisees over time they began to see and treat them as customers they became a glorified expensive food distributor and for that they paid the ultimate price they're basically gone now the closest one to me is over 2 hours away and I can only imagine that distance will grow further and further over time but what do you think will Quiznos ever make any kind of meaningful comeback in the near future or are they doomed to suffer a slow and painful Extinction let me know down in the comments below I'd love to hear what you think also I know it's been a while since my last video and I just wanted to say I'm back let's do this in all seriousness though thank you so much for watching
