More than 99% of its restaurants will carry on as usual. Only seven will seek the help of the state’s economic structures. But nevertheless Quiznos is filing for bankruptcy. The prepackaged restructuring is to occur without fail. That means that the food chain’s debt will get slashed by $400 million or so.
Quiznos is a fast food chain that specializes in the toasted sub which is a hot and crispy deal alright. Although people love to eat at Quiznos, the competition from other fast food chains is pretty stiff. Add to that the state of debt the franchise finds itself in and you have all the makings of trouble.
The food firm’s agility is to be increased via this rather drastic action and its functioning will get better too. The words that the franchise wants to apply to itself in the future are: pure, top quality and absolutely delicious.
"The actions we are taking are intended to enable Quiznos 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," said Stuart K. Mathis, Quiznos Chief Executive Officer. "We look forward to continuing to work with and support our global network of franchise owners, who are the backbone of our business."
The company filed for Chapter 11 in the US Bankruptcy Code. Quiznos has over 2100 branches spread throughout the United States as well as the rest of the world. The decision to file for bankruptcy came at a time when another food chain is also doing the same thing. Sbarro, the pizza company is in the same boat as Quiznos.
In fact, the main issue facing these food chains is the ten thousand other eateries that have sprouted everywhere. This mushrooming of so many other enterprises has virtually bled Quiznos and Sbarro dry. Future growth would have been impossible without this desperate step taken by both. The plan for the times to come is simple enough.
Mathis continued, "Our business plan includes several key elements aimed at supporting our franchisees, including reducing food costs, implementing a franchise owner rebate program, in certain circumstances making loans available to franchisees for restaurant improvements, investing in advertising to improve location awareness, and providing new incentives for prospective franchisees. We are also introducing new technology at the restaurants and taking other actions to help our franchisees operate their businesses more efficiently."
A reduction in food prices, a rebate scheme, loans for franchisees and advertising efforts are just a few of the things which need to be done. Furthermore, Quiznos will get $15 million in financial aid from its elderly supporters. So maybe things will get back to normal after all despite the shock of going bankrupt.