In a week that first saw fast food pizza chain, Sbarro, file Chapter 11 bankruptcy, the trend continues. Yesterday, toasted-sub chain Quizno's Subs filed for Chapter 11 as well.
The company says not to worry as they have a plan in place.
Quizno's Subs' CEO said in a statement, "The actions we are taking are intended to enable Quizno's to reduce our debt, execute a comprehensive plan to further enhance the customer experience, elevate the profile of the brand and help increase sales and profits for our franchise owners."
The restructuring is focused on a debt reduction plan that takes care of $400 million.
While Quizno's Subs is mainly a franchised chain, individual franchise owners ran into problems with the prices Quiznos was charging them for ingredients. Although many prices were eventually altered, it may not have been timely enough for some.
Included in the restructuring plan is a rebate program for franchise owners and new incentives for future franchisees.
With big competitors, such as Subway, Potbelly and Noodles and Company, Quizno's has fallen behind in the world of advertising and additional investments are planned to be made in that area as another part of the restructuring plan.
Over the past 4 or so years, Quizno's Subs has gone from approximately 5,000 operations to just about 2,000; therefore, profits have fallen accordingly and advertising has been affected as a result.
Besides investing more in advertising, Quizno's has introduced toasted pastas to their menu and gone back to their original practice of adding veggies to their sandwiches before toasting.
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