Quiznos Summary

Sandwich drawing string Quiznos made its name selling savory subs at premium prices, but a leveraged sullyout at the top of the marketplace and the ceding back helped turn that strategy to toast. Now the company finds itself on the brink of default, also thanks to sour relations with franchise owners, expensive rents and stepped-up competition from rivals like Subway. The chain now has about 3,500 stores, down from nearly 5,000 in the lead the recession. With sales sliding, Denverbased Quiznos told lenders July 8 that it would soon violate loan terms, which would put the chain in default and could trigger demands for immediate repayment of its debt. The chain has hired Wall track restructuring advisers to negotiate with its lenders, and said it has taken steps, such as edged food costs, which it hopes will improve cash flow. But it continues to face contrast set stomachs. Having a great deal of debt hampers your ability to grow because youre paying back interest, rather than investing in the brand, said Darren Tristano, executive vice chairwoman at eating place consulting Before the recession, most of us believed the restaurant industry could continue to grow by leaps and bounds, so when you combine the recession with having a lot of debt, it creates two enormous barriers to success, he said.

Quiznos, formally QIP carrier LLC, was on a growth tear for much of the past decade, chop-chop attracting franchisees as its hot sandwiches carved out a deferral in the fast-food market. Franchisees pick out complained for years about Quiznos?s prices for ingredients. Above, employees at a Seattle Quiznos in 2005. The company required franchise owners, who paid it royalties on their sales, to buy their supplies from a Quiznos subsidiary, which became a sore point early on. Franchisees have complained for years that the Quiznos unit charges substantially more than independent distributors for ingredients and other supplies. Those claims were the radix for five class-action... If you want to get a full essay, rove it on our website: Orderessay

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