Why the heck should Quiznos franchisees trust the new CEO…or anyone at Quiznos corporate office?
Can you come up with a reason?
Oh. You haven’t been following the Quiznos franchise saga?
For starters, there used to be (in 2007) 5,000+ Quiznos stores. Now, there may be 1,000.
The Quiznos Franchise Saga
What you’re about to read will make you feel like you just got punched in the head.
“I was a guy with a net worth in 2006 of over $500k, perfect credit, a good job in the medical field, a good passive income from some rental property. I lived on my 80+ acres farm in my own home. I was also engaged to get married. I was taken in by [sandwich franchise] Quiznos’ lies about the wonders of being your own boss and how much success I could have.
How stupid I feel now. This settlement is just a drop in the bucket to me. I understand that I will get a check in the mail for seventeen hundred dollars…. [And] it will be delivered to my mom’s house, because that is where I now live. My home, farm, rental property, credit rating and fiancé are all gone after my bankruptcy last year. Fortunately I was able to go back to my job and I’m getting back on my feet and doing well at repairing the damage, but it will take a long time.
I know how they got me. I was a dreamer with no business experience and I played right into the hands of these liars. Some of my fellow owners in my area were experienced at business and they fell for it too, so Quiznos was really slick. I hope one day they put these people under the jail.”
See what I mean?
Those uplifting words came from Joe, who claimed he was a “former Quiznos franchisee.” He wrote those paragraphs underneath a blog post I published a few years ago about the issues that were going on at Quiznos corporate. Little things. Like class-action lawsuits. Fun stuff like that. And, it looks like it’s going to continue to be “fun” for awhile.
Why Should Quiznos Franchisees Trust The New CEO?
A discussion on trust can’t begin-in the case of Quiznos, without sharing a little about former CEO, Rick Schaden. (Two Schaden’s actually; a father-son duo.)
Actually, Schaden is the former CEO of Quiznos-twice. He left Quiznos in 2007 to start Smashburger, another food franchise business. Then he came back in 2009 to improve things.
Alleged Financial Fraud
Avenue Capital and Fortress Holdings were both large Quiznos lenders in 2012. They pretty much bailed Quiznos out…their injection of money prevented the food franchise’s demise. But, in July of last year, they said that “The deal was fraught with Schaden-forged fraud, costing the hedge funds hundreds of millions of dollars.” And, they sued. Read
So, now, there’s a new CEO at Quiznos.
Doug Pendergast replaced Stuart Mathis, who took over for Schaden. (Mathis recently resigned to “pursue other opportunities.”)
From PR Newswire:
“Mr. Pendergast joins Quiznos having previously held a variety of leadership roles in the restaurant industry. Most recently, he served as President and CEO of The Krystal Company. Prior to that, he held positions as Chief Development & Franchising Officer for Craftworks, EVP & Chief Franchise Officer for Church’s Chicken, and VP of Strategy for AFC Enterprises. Mr. Pendergast has also held positions with McKinsey & Company and Procter & Gamble. He has an MBA from Harvard University and a Bachelor’s in engineering from Georgia Tech.”
Great credentials. But, will the current Quiznos franchisees trust him? They’ve had to endure a lot of B.S. over the years.
As a matter of fact, should these people…the ones who have put their money, their hearts, and their souls into this struggling franchisor, trust anyone at Quiznos headquarters?
Or, should they try to sell their locations and move on?
Do you know any Quiznos franchisees?
If so, please pass this post on to them. I’d love to hear their feelings about the newest CEO and the state of Quiznos. They can comment anonymously below.