Quiznos Franchise Costs (In-depth analysis)

Do you want to own your own business? In this post I take a deep dive into the Quiznos fast food franchise, including a look at Quiznos franchise costs and how to get started.

The company was created in the United States in 1978. It started out with the name Sandwich World. It wasn’t until 1981 that the company changed its name to Quiznos.

Soon there were Quiznos locations all across America. The restaurant business also opened up store operations in Canada during the 1980’s. By 2013 Quiznos had become the second largest fast food chain for subs in North America. This placed it just behind Subway.

The original Quiznos was located in Denver, Colorado. Jimmy Lambatos and Todd Disner set it up in the Capitol Hill area. That first Quiznos store soon became known for its food quality. Quiznos made toasted subs and at the time this was an innovation in the sandwich restaurant industry.

Quiznos first started offering franchises in 1983. Rick Shaeden and his father opened their first Quiznos franchise in Colorado in 1987. By 1991 they had bought the entire chain from the original founders. It then became the Quiznos Franchise Corp.

More than 500 restaurants in North America and more than 200 in 31 countries make Quiznos a viable option in urban and suburban areas as well as non-traditional locations, including colleges, airports, hospitals, and more. There is wide open access to both U.S. and international markets.

With thanks to ownaquiznos.com

Quiznos Values

If you want to run your own business and have some restaurant management experience, this is a clear business opportunity. Having your own Quiznos means aligning yourself with the brand values:

  • Entrepreneur – Take Ownership of Your Restaurant, Stand by Your Results, and Learn from Your Successes and Failures.
  • Leadership – Excel within Your Community and Guide Your Restaurant and Team Members.
  • Experience – Use Your Previous Restaurant Knowledge to Succeed with Your Future Business Growth.
  • Diligence –Give Maximum Effort Every Day and Proactively Respond to Change for Your Restaurant to Succeed.
  • Quality – Provide a Restaurant Experience to the Customer with Great Tasting Food and a better food choice in an inviting environment.

Quiznos Franchise Costs: What will I sell?

The main item on the menu will be Quiznos subs. These are what the brand is based on. However, like many other sandwich chain brands, Quiznos offers a wider menu. Quiznos is also known for soup, pizzas and salads.

Although it is no longer a novelty, Quiznos will forever be known for it’s toasted subs. And that is what will get the customers turning up. The Quiznos brand has been built on that core concept of toasted sandwiches made with fresh ingredients.

The ingredients are what made Quiznos such a big deal in the first place. The restaurants don’t use processed cheese and they ensure that all meat is high quality. There is also plenty of choice, with customers able to select the ingredients they want in their subs.

Quiznos franchise costs: How do I start?

In order to apply for a franchise, you can use one of two methods. The franchise agreement can either be downloaded from the Quiznos website or you can fill in the application online. Upon completing the application, you will be contacted to start discussions. The franchisor and you must both be sure you are a good fit for each other.

Quiznos Franchise Costs: What support will I receive?

As part of the franchise agreement, the franchisor must provide franchisees with the following assistance:

  • A suitable outlet/restaurant location will be found for you, with Quiznos locating real estate on your behalf
  • If financial assistance is required, the franchisor will be able to connect you with approved lenders
  • Architects appointed by the franchisor will draft plans for your outlet
  • A licensed architect / contractor will obtain the necessary planning permissions on your behalf
  • Shop fittings will be provided
  • Deliveries and installations of signage and equipment will take place
  • Training will be provided to you in every aspect of building your Quiznos building, in-store operations training for three weeks, and managerial training for four days. You will take part in some of the training through the Quiznos University, including a focus on the Quiznos business model.
  • Lastly, a designated franchise manager will provide you with whatever guidance you need to open your store, during its opening, and afterward.

When considering a location for a prospective franchisee, Quiznos asks the following questions:

  • Are drivers able to see the location from the road? Is it visible to pedestrians?
  • Is the location easily accessible by car? Could it be reached on foot easily?
  • Are there multiple traffic generators in the area? Is the location already popular among residents? Does the location have other attractions nearby?
  • Is this location popular during lunchtime?
  • Are there other businesses and residences near this location?

Online training

Franchisees will have access to the Quiznos online training platform before attending further training sessions. Modules include educational topics such as the brand, the recipes, how to prepare the sandwiches, the POS system, and how to train employees. As a result of the online training platform, once you have graduated from the training facility, and are ready to open your new restaurant, you have access to the necessary information about your new business no matter where you are in the world.

Classroom training

There will also be several classroom-style training sessions to prepare you to run a successful business. Among the skills that Quiznos will teach you are how to market your business effectively on social media platforms such as Facebook, Twitter, and Instagram and how to hit the pavement in your community to sell catering services to small businesses in your area. Furthermore, Quiznos teaches you how to read Profit and Loss statements, develop a business plan, and grow your business.

Ongoing coaching

Your field representative will visit or call you regularly to determine how well you’re accomplishing the goals you set for your new business, as well as to answer any questions and resolve any issues that arise. You’ll benefit from this ongoing presence in the form of peace of mind, holding you accountable, and assisting you in scaling your business.

Quiznos Franchise Costs: Do I need experience?

In franchising, Quiznos looks for certain experience, focus, skills, and attributes. Master Franchisees in the UK speak of drive, commitment, teamwork, passion, and hard work. Franchisees at Quiznos are also appreciated for their management experience.

It is essential for you to be eager to learn the ropes of the business, ambitious to grow your business and perhaps to open multiple locations, be strongly self-driven, have clear and developed leadership skills, and have access to the required financial resources.

Franchisees who are veterans have proven success following systems, procedures, and processes that make for successful businesses. The company operates on systems. In franchising, following procedures and implementing systems with the precision emphasized in military training is an effective strategy.

Quiznos franchise costs: How much?

To become a franchisee of Quiznos, you will be required to pay an initial franchise fee of around $17,000. You will also need some equity capital to become a franchisee of Quiznos. An additional fee of $68,000 is quoted by the franchisor on top of the franchise fee. This is a fairly typical startup fee for a fast food franchise.

Along with other expenses taken into consideration, your set-up and startup costs may be as high as $255,000.

Franchise fees, real estate agent and legal fees, design and construction costs, signage, a point-of-sale system, and advertising for the opening of your outlet can affect the costs.

Quiznos Franchise Costs: What are the ongoing costs?

Quiznos franchisees will have to pay 4 per cent of their gross sales for advertising fees and 7 per cent for royalties. You may use the remaining funds to cover overheads such as rent, utilities, salaries, and so on. If your business is successful, you may well be able to draw a salary.

Quiznos franchise costs: A turnkey operation

From your first franchise enquiry until your first day in business and beyond, Quiznos offers you turnkey services. Within 24 hours of completing the survey, the architect will draw up plans for the site. The process generally takes four to six weeks. The team of architects, contractors and shopfitters will get your store built on time and to an excellent standard. Planning permissions and construction regulations will also be handled by them. You will receive a key when the store is ready so you can start trading.

Quiznos Franchise Costs: Do I get a guaranteed income?

Franchise income varies according to various factors, including how much and how well franchisees work. How much income you make is entirely up to you. A typical franchisee claims that the restaurant can be up and running, earning income, in as little as six months.

Quiznos Franchise Costs: What about marketing?

Your brand and advertising are supported nationally, but you must also carry out local marketing, especially during your pre-launch and first few months. The right marketing campaign will build Quiznos brand loyalty and result in sales growth. The training that you receive will also consist of assistance in planning a ‘grand opening’ and receiving a store ‘toolkit’.

Quiznos Franchise Costs: So what’s the problem?

Bad luck, basically. When Quiznos was at its peak, it was a huge success. Early in the 2000s, the chain became a formidable competitor to Subway, with its innovative national advertising and a focus on online marketing. Contrary to its larger rival, it served toasted subs rather than cold sandwiches.

Arby’s and Firehouse Subs currently operate a combined 4,300 locations, putting the Quiznos chain’s size of 4,700 in 2007 in perspective. Yet those 4,700 locations were based on weak economic fundamentals of low unit volumes and low profits.

Rick Schaden, the chairman of Consumer Capital Partners, sold a minority stake in Quiznos to private equity firm CCMP Capital Advisors in 2006. Several hundred million dollars of the company’s debt remained after the leveraged buyout. A loan obligation of $875 million was part of Quiznos’ bankruptcy filing in 2014.

Assumed in a leveraged buyout is the ability for the company to continue growing, since money from the company goes to pay the previous owners. This type of buyout is fairly common.They’re also highly risky. In fact, Quiznos would turn out to be the scariest scenario.

Then Subway just kept getting bigger and bigger.

Small toasters were added to each Subway location in 2005, diminishing the company’s competitive advantage. This weakened the small chain’s position. Then Subway introduced its $5 footlong subs. When Quiznos tried to compete by discounting, it made a big mistake. A famous incident occurred when the company sent out a coupon for a free sandwich in 2009, and franchisees revolted and refused to accept it due to the low profits and discounts. Quiznos’ problems worsened as a result.

The free subs and Subway’s $5 footlong offer coincided with the recession’s start. Consumers cut back on eating out because of the recession. Federal data indicate that restaurant sales actually declined in 2009, a remarkably unusual event. The recession hit many companies. Bankruptcies were commonplace. Almost all of Quiznos’ franchisees made very little profit. Many of them closed their stores.

In 2009, 700 locations were closed. Around 800 more closed in 2010. On Craigslist, it was possible to buy Quiznos equipment for pennies. Although Quiznos could have helped those franchisees, it still owed money. The food sales were crucial for funding. Consequently, the chain continued to close stores.

There is good news, however: the financial strategies that led to many closures have been changed. In addition, the company’s unit volumes have risen: Average unit volumes rose 3.9% in 2017.

Then REGO Restaurant Group, a private equity firm that specializes in transformational opportunities, acquired Quiznos. In mid-2019, High Bluff Capital Partners and REGO began an evolutionary process when they partnered with Prophet, a business transformation consultant. According to REGO president Mark Lohmann, several members of the management team have worked with Prophet at previous companies. In this regard, Quiznos knew it would get what it wanted-a brand revitalization.

Prophet conducted in-depth market research and provided recommendations based on consumer insight during the process. A new store prototype was created with updated design, new menu items, and drive-thru ambitions. This new model was introduced to franchisees in 2020.

The verdict

It is fairly clear that Quiznos has been through the mill. The food industry is notoriously difficult to navigate, but Quiznos has had a particulalrly rough time.

The main reason for that bad experience is bad business strategy. But brands can bounce back, and Quiznos still has national brand recognition even against the mighty Subway franchise operation. Quiznos restaurants may have dwindled for a while, but expansion into other countries is continuing, and the REGO factor seems promising.

The next step

According to Quiznos, this is the process:

Request Information

  • Complete the form to start the communication process
  • Speak to a Quiznos Franchise Development Manager

Initial Application

  • Complete application
  • FDD signed & returned
  • Financial Review
  • Speak with a Franchise Development Manager

Final Approval

  • Business plan review
  • Site review and approval
  • Sign franchise agreement
  • Secure financing

Training + Construction

  • Sign lease
  • Begin construction
  • Quiznos University

GRAND OPENING

  • Store grand opening
  • Instore and ongoing operational support

All in all, I feel the new direction for Quiznos is promising stuff. With low initial investment costs and a great support offering, this could well be one of the best franchises around right now.


Read more…

With more than 2800 restaurants worldwide, Arby’s Inc. is a subsidiary of Triarc Companies, Inc. Among other things, Arby’s is known for its roast beef sandwiches. Their food franchises in the United States allowed the chain to expand briskly during the 1970s and 1980s. Arby’s had more than 2,500 stores by 1995.

Want to learn more about investing in an Arby’s franchise? Read Arby’s franchise cost: (read before you invest).

Author: Sal Ashraf

I'm a freelance writer. This site is all about getting more business, and keeping that business, whether you're a solo entrepreneur, or a large company.

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