D Y S F U N C T I O N A L ;
Impaired or abnormal functioning. Abnormal or unhealthy interpersonal behavior or interaction within a group. (In a franchise environment)
Group = Franchisees
Within Group = Quiznos current, ex, and current (again) execs.
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Where should I begin?
Dysfunction Level #1
Let’s start with the fact that in February of 2009, Rick Schaden, Quiznos’ founder and largest shareholder, resumed the role of chief executive after the resignation of Dave Denot. Schaden wasn’t exactly a hit with the franchisees, when he left last time. He comes. He goes. He’s baaaaaack.
Dysfunction Level #2
Did you know that in 2007, Quiznos was sued for selling 3,000 franchises that never even opened?
They’ve been sued many, many times, before, by their own franchisees. For things like “operating a prolonged deceptive business practice that has been carried out since 2000.” Operators allege that the franchisor induces unwitting prospects to purchase and operate Quiznos sandwich shops and pay franchise-related fees. Quiznos has also been accused of implementing slick sales tactics and marketing the American dream of business ownership in what was referred to as the fastest growing franchise in the United States.
Early in my franchise career
When I was attending franchise consultant training back in 2001, one of the other gentleman that was also there to learn franchise consulting happened to be an area developer for Quiznos. Later that day, someone else in the class approached me, and told me that the guy didn’t exactly have a stellar reputation. As a matter of fact, he was considered scum. Nice. (In the months that followed, I was told that lots of area developers for the Quiznos chain were rather slick, and I never heard anything positive about the franchise ever again.)
Here’s the thing; There’s always a couple of stories that are reported on about a company.
One is usually from an industry writer, who knows the in’s and outs of the particular business type. Good stuff.
Then there’s the story that’s told (eventually) from a company insider, or in this case, a bunch of franchisees. Good stuff. The real deal. The real story.
Almost 10 Years Now
In the almost 10 years that I have been in this segment of franchising, I cannot recall one time in which Quiznos was mentioned in a positive light. Not one. Ask anyone inside the franchise industry what their opinion of Quiznos
is. Go ahead.
Dysfunction Level #3
There’s a special website set-up for one of the big class-action lawsuits.. for the folks that want to collect. www.QNationalSettlement.com How many franchise companies have you heard of that get to be under the spotlight like this. It’s special.
Now, just because I think that Quiznos appears to be a little dysfunctional, doesn’t mean that it is. You can decide on your own if Quiznos is a dysfunctional franchise business. There’s plenty of information around.
The real reason that Quiznos is opening 600 “Company Stores“
In my opinion, the real reason that Quiznos has decided to go with company stores this time around, is that they just don’t have the money or inclination to fight with angry franchisees anymore. They can control company stores better. (I wonder how many franchise salespeople from Quiznos have been downsized?)
Two questions;
1. Do you know any current or ex-franchisees of Quiznos? If so, do you know how they feel about the company?
2. Do you think Quiznos will succeed with their new business model? (Or will they have to use OPM, and start selling franchises by this time next year?) OPM = Other People’s Money
Comments are now open.
One more thing; How many current or former franchisees who are experiencing the joys of litigation, currently, could have saved themselves some grief by just doing some really thorough franchise research?
Here’s where to do thorough franchise research
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I work for a Cleveland area commercial architecture firm that does a lot of franchise work. Around 2007 one of our clients was looking into opening a passel of Quiznos and when we were together, he would drag me into every Quiznos around.
His conclusion was that Quiznos is predisposed to shooting itself in the foot repeatedly, and the franchise owners lacked a lick of home office support.
Hi Susie,
Thanks for stopping by, and for sharing that little tidbit.
I’m surprised. And shocked.
The Franchise King®
Like it or not Quiznos went from a brand that no one ever heard of just a short while ago to one of the largest restaurant brands in the country. While they made plenty of mistakes along the way, they are not the first to have done so. Subway went through a similiar experience at about the same point in their growth, and have gone on to build about 20,000 additional stores since then. I suggest that you reralize that there are a lot of very bright people with very deep pockets involved, and I would not bet against them. They clearly know how to build a brand. Now they have the opportunity to fix the mistakes of the past and do it for the long term. The fact that they are doing all of this on their own money speaks volumes of their confidence in the plan and it’s success to date.
Quizno’s are going out of business everywhere…According to multiple Franchisees I spoke with they were forced to pay Quizno’s Corp. for expensive materials and food, yet the company kept lowering the price of the sandwich to keep up with Subway. Franchisees could not make a profit, I wonder if Quizno’s Corp did?
Emily,
Thanks for stopping by and sharing that information.
Great question! Did they? How much $$$$?
The Franchise King®
Great info. Thank you. I was thinking of investing in Quiznos, but after reading your blog I am going to give it a second thought. Thank you again.
I just closed my 2nd Quiznos. They have ruined many, many lives. People are losing their life savings, getting divorced, losing their homes etc. Quiznos Corporate does not give a crap about its franchise owners at all. They were just concerned about opening a franchise on every street corner and now the franchise owners are suffering for it. They did not do protected territories. I hope that if anyone wants to open one, they talk to as many franchise owners as they can and they will see than less very few actually even break even. Very sad.
Monica,
Although I’m not surprised, it’s still a bad situation, especially for you.
They certainly sold a lot of franchises. (And probably to the wrong people)
In your case, I have no idea if you were a “fit” for a food business or not. I do know that lots of folks flock to fast food franchises, especially the ones with 6 and 12 inch sub sandwiches.
Best of luck with all the stuff that you’re going through.
The Franchise King®
We were open for almost 7 years and were in the top 3 of 30+ Quiznos in our area for most of the time we were open. Yes, I do blame the economy for some of it, but Corporate is not doing ANYTHING to help struggling franchise owners. I beleive more are struggling than not. Instead they are sending auditors out to find anything they don’t like and fining owners. Why so many class action lawsuits and why are so many stores closing? I would love for corporate to answer that!
Monica,
It’s tough to hear a struggling franchisee talk about the fact that “Corporate is not doing ANYTHING to help struggling franchise owners.”
What can I do do help out?
The Franchise King®
Unfortunately I think its to late to do anything! I just feel bad for all the people that are working so hard for nothing! I have met so many franchise owners on facebook and they are all so unhappy and shocked at what corporate is (isn’t) doing! They are all losing money, putting their life savings into this franchise….Someone needs to do something to prevent it from happening to more people!
Now it seems they are forcing franchise owners to close…after they have spent all their money and time opening the store and getting it ready. So now the next guy buys it for $5000 instead of the $25,000 franchise fee and the store is already built, or corporate will take it over. Nice move Quiznos….screw over some more people…
Hi Monica,
How can they force you to close?
What’s going on?
Is it just your stores?
The Franchise King®
I am an ex-owner. I bought the franchise (2) in 2004 in the middle of the Quiznos boom. Owners were new for the most part and they were seeing success. In short, I got my money back for the second franchise store (was 2 days under the 30 limit) and closed the one store I opened within 36 months. I did research Quiznos but at that time there was no bad news. Hindsight being what it is let me confirm to anyone reading …. STAY AWAY FROM THIS BRAND AS AN OWNER. No matter what they offer you, SAY NO. Quiznos is owned and sold out by snakes in the grass. Use your money to buy McDonald’s stock, sit back and collect the dividends and forget anything you know about Quiznos.
Sorry to hear about your rather lousy experience.
One never knows how things will turn out.JL