At it's peak in 2007, Quiznos had ~5,000 stores and generated nearly $2 billion in revenue.
Today they have less than 200 stores and can't stop the bleeding.
Here's how the toasted sub empire collapsed 👇
Today they have less than 200 stores and can't stop the bleeding.
Here's how the toasted sub empire collapsed 👇
In 1978, Jimmy Lambatos & Todd Disner started a fine-dining restaurant in Denver called Footers.
It was there where they had the idea for an Italian style deli, so Footers became a testing ground for Quiznos products.
The partners opened the first Quiznos in 1981.
It was there where they had the idea for an Italian style deli, so Footers became a testing ground for Quiznos products.
The partners opened the first Quiznos in 1981.
The concept was an immediate hit.
Locals loved how toasting the sandwiches enhanced the flavors and melted the cheese.
Quiznos was a toasting pioneer, and is believed to be the first business to do it at scale.
They still call themselves the home of the toasted sub.
Locals loved how toasting the sandwiches enhanced the flavors and melted the cheese.
Quiznos was a toasting pioneer, and is believed to be the first business to do it at scale.
They still call themselves the home of the toasted sub.
By 1991, they were up to 18 (mostly franchised) locations.
That's when Lambatos & Disner SOLD the whole company to local franchisee Rick Schaden, a 26 year old who owned a few Quiznos thanks to some help from his father.
This is where things started to take off...
That's when Lambatos & Disner SOLD the whole company to local franchisee Rick Schaden, a 26 year old who owned a few Quiznos thanks to some help from his father.
This is where things started to take off...
Schaden and his father wanted growth, so they built infrastructure to support franchise owners via training and marketing support.
By 1993 they doubled their store footprint to 40 locations in multiple states.
Then in 1994 they took the company public, raising $4M in an IPO
By 1993 they doubled their store footprint to 40 locations in multiple states.
Then in 1994 they took the company public, raising $4M in an IPO
With the funds from the IPO, they accelerated growth and hit 1,000 locations by 2000.
At that point they made a fateful decision to form a subsidiary: American Food Distributors (AFD).
They required franchisees to purchase ALL their food and paper products through AFD.
At that point they made a fateful decision to form a subsidiary: American Food Distributors (AFD).
They required franchisees to purchase ALL their food and paper products through AFD.
Suddenly Quiznos was making way more money by supplying franchisees with goods than from royalties.
In peak years, Quiznos made $200M+ from AFD, compared to ~$70M from royalties.
The profits fueled more growth and they hit 2,000 locations by 2003
In peak years, Quiznos made $200M+ from AFD, compared to ~$70M from royalties.
The profits fueled more growth and they hit 2,000 locations by 2003
But franchise owners weren't happy - they were being pressured into offering low prices while paying above market prices on their food and paper goods.
Not to mention, Quiznos was using marketing funds to run some *questionable* commercials:
Not to mention, Quiznos was using marketing funds to run some *questionable* commercials:
To make matters worse, in 2004, Subway went head-to-head against Quiznos and started toasting sandwiches, destroying the only moat they had.
Somehow Quiznos managed to continue growing, and hit ~5k stores in 2007, but internally the company was ready to implode.
Somehow Quiznos managed to continue growing, and hit ~5k stores in 2007, but internally the company was ready to implode.
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