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What Happened to Quiznos Franchise? (2022)

Written by: Dylan Tymkiw
Last Updated: December 1, 2022
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This article is based on its 2021 FDD and the video above, from Vetted Biz Youtube Channel

Contents

Quiznos franchise offers submarines and other sandwiches, salads, soups, drinks, and other products. Quiznos has been a very popular restaurant in the past but it has seen a constant decrease in locations in the past few years.

The Quiznos franchise was founded in 1981 in Denver, Colorado. Throughout the years it evolved into Quiznos Franchisor, which is located in Delaware.

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Quiznos currently has 238 locations scattered around the country. This number is a result of a downtrend that seems to be in place for several years now.

Tim Casey is the CEO of Quiznos since 2019. In the past, he was the brand head of Rusty Tacos, CEO of PepperJax, and president of QDOBA Restaurant. All hope to see Quiznos make a comeback lies on his shoulders.

Quiznos franchise

Competitors of Quiznos include other restaurants in the fast-food industry like Subway, McDonald’s, and Burger King, as well as other Quiznos restaurants nearby.

We will analyze if the potential returns are worth the initial investment as well as the reason behind the decline of Quiznos.

Quiznos Franchise – Downward Trend 

Did you know that just a bit over a decade ago Quiznos had over 4,500 locations? Yes, it lost 90% of its locations in 12 years, but why? 

Quiznos was built upon a fragile foundation.

Yes, it was growing rapidly and was becoming a threat to Subway with its toasted subs but the 4,500 locations that Quiznos had were built on a foundation of low profits. This made franchisees mad since they were making almost no profit. When the recession hit in 2008, the decline of Quiznos started. With franchisees not being able to afford the tiny profits they started closing down, and Subway thrilled with its new $5 footlong sub.

 

Quiznos Franchise Costs

The initial fee for a Quiznos franchise is $10,000. The upfront fee must be paid before opening the restaurant. A fee of $5,000 must be paid for any additional franchise.

Quiznos Franchise Cost:

The estimated total investment for beginning operations of a Quiznos franchise is between $216,100 and $338,500.

ESTIMATED INITIAL INVESTMENT

Type of ExpenditureAmountMethod of PaymentWhen DueTo Whom Payment is to be Made
Initial Franchise Fee$10,000Lump SumAt signing of
Franchise
Agreement
Quiznos
Architectural Fees$10,000 – $20,000Lump SumBefore openingOutside Vendors
Leasehold Improvements$63,000 – $95,000As arrangedBefore openingLandlord or
Contractors
Equipment, Construction
Materials, and Signs
$75,000 – $120,000As arrangedBefore openingQuiznos; Used Equipment
Owner; or one of their
Vendors
Delivery Equipment and
Promotional Materials
$0 – $1,500As arrangedBefore openingOne of their Vendors
Uniforms$0 – $500Lump SumBefore openingOne of their Vendors
Cash Register, Credit Card,
Music, and Computer
Systems
$2,000 – $6,000Lump SumBefore openingThird party or one of
their Vendors
Phones, Other
Miscellaneous Items
$1,000 – $3,000As agreedBefore openingOutside Vendors
Security Deposits, Utility
Deposits, and Business
Licenses
$3,600 – $8,000As agreedBefore openingLandlord; Vendors;
or Government
Agencies
Training Expenses$2,500 – $4,500As agreedBefore openingOutside Vendors
Grand Opening Advertising
Campaign
$5,000 – $15,000Lump SumBefore openingOutside Vendors
Real Estate-See Note belowAs agreed  
Opening Inventory$9,000 – $15,000Lump SumBefore openingOne of their Affiliates
or Vendors
Additional Funds
(3 months)
$35,000 – $40,000As arrangedAs incurredVendors and your
Employees
TOTAL ESTIMATED
(excluding real estate
costs)
$216,100 – $338,500   

-Note: “Real estate costs depend on whether you owned the Franchised Location before signing the Franchise Agreement or instead purchase or lease your Franchised Location…”

Other Fees: 

Royalty: 5% of gross sales

Marketing: 2% of gross sales

Management Fee: 3% of gross sales

What do you need to do to open a Quiznos Franchise?

In an attempt to prevent the brand from disappearing, Quiznos is eagerly looking for new investors to open a Quiznos franchise.

Quiznos does not have any net worth requirements and the liquid capital required to open a Quiznos is only 30% of the initial investment. 

The process to open a Quiznos franchise is similar to most other franchises. You fill up an application and if you qualify, there will be an interview.

How much do Quiznos Franchise owners make?

Quiznos does not make any representations about a franchisee’s future financial performance or the past financial performance of company-owned or franchised outlets. However, if you are purchasing an existing Quiznos, the company may provide you with the actual records of that Quiznos.

Is Quiznos franchise profit worth the initial investment?

If our estimates are correct, they are not. With that amount of sales, you will barely cover your expenses and you will not be able to sell the franchise at a good price.

Quiznos Income Statement (Part 01):

 P5 2021 ActualP5 2021 BudgetP5 2020 Actual
Revenues:      
Company Restaurant Sales$ 1,738,57868.0%$ 1,556,85569.4%$ 1,033,42671.7%
Franchise Royalties and Other:      
Royalties – US264,35910.3%243,52410.9%169,94711.8%
Royalties – Canada128,7185.0%99,8874.5%53,1093.7%
Royalties – International1,2000.0%12,0000.5%15,0241.0%
Franchise Fees and Other1,9790.1%2,0000.1%14,4711.0%
Total Franchise Royalties and Other$ 396,25615.5%$ 357,41115.9%$ 252,55117.5%
Advertising Fund Contributions149,3225.8%135,7726.1%75,4755.2%
Vendor Rebates271,48610.6%192,3108.6%80,6135.6%
Total Franchise Revenue$ 817,06432.0%$ 685,49430.6%$ 408,63828.3%
Total Revenues:$ 2,555,642100.0%$ 2,242,349100.0%$ 1,442,064100.0%

Quiznos Franchise

Quiznos Income Statement (Part 02):

 P5 2021 ActualP5 2021 BudgetP5 2020 Actual
Costs and Expenses:      
Restaurant Operating Costs      
Cost of Sales510,11929.3%446,42828.7%406,07139.3%
Labor418,19524.1%401,73225.8%273,08826.4%
Other Operating196,12211.3%170,40910.9%76,7177.4%
Occupancy149,4998.6%189,85312.2%123,49311.9%
Royalties and Advertising78,2014.5%70,5154.5%81,9597.9%
Total Rest. Operating Costs$ 1,352,13677.8%$ 1,278,93882.1%$ 961,32793.0%
Restaurant Operating Margin$ 386,44122.2%$ 277,91717.9%$ 72,0997.0%
       
Franchising Costs      
Operational Overhead77,6079.5%115,33116.8%81,71720.0%
Marketing Overhead35,5894.4%37,0005.4%25,3026.2%
Advertising and Related113,73313.9%110,77216.2%52,13212.8%
Total Franchising Costs$ 226,92927.8%$ 263,10338.4%$ 159,15238.9%
Franchising Margin$ 590,13572.2%$ 422,39161.6%$ 249,48661.1%
Total Contribution Margin$ 976,57638.2%$ 700,30831.2%$ 321,58522.3%
       
Depreciation and Amortization179,4857.0%170,0007.6%168,82911.7%
General and Administrative541,05621.2%547,27424.4%420,11129.1%
Transition/Restructuring Costs0.0%
Deferred Rent11,6930.5%16,0000.7%3,9680.3%
FX (Gain)/Loss5230.0%0.0%(4,993)(0.3%)
Minority Interest11,1640.4%5,0000.2%6,8630.5%
Other(7,014)(0.3%)0.0%(435)(0.0%)
Total G&A and Other$ 736,90728.8%$ 738,27432.9%$ 594,34441.2%
       
Interest Expense211,9698.3%182,0008.1%203,63414.1%
Income Taxes12,4040.5%12,0000.5%18,3671.3%
Net Income$ 15,2970.6%$ (231,966)(10.3%)$ (494,759)(34.3%)

According to Quiznos income statement, the company lost a lot of money in 2020, and in 2021 it only made 15 thousand dollars in profit. These numbers are concerning, it tells us that the company is not doing well and could go out of business at any point.

Quiznos

Quiznos Locations: How many have opened and closed?

Outlet typeYearQUIZNOS
Restaurants at the
Start of the Year
QUIZNOS
Restaurants at the
End of the Year
Net Change
Franchised2018372304-68
2019304278-26
2020278229-49
Company-Owned201832-1
2019220
202021-1
Total Outlets2018375306-69
2019306280-26
2020280230-50

The number of total franchises has been decreasing year after year. 2018 seems to have been the worst year for Quiznos. However, it is noticeable that a lot of Quiznos franchises are doing poorly and they most likely cannot afford to stay open. 


Conclusion

Quiznos used to be one of the biggest franchises in the country with over 4,500 units, but it is slowly going out of business for several reasons. The small sales revenue of the franchises is probably the main factor. It is impossible to stay in business when the average franchise makes only 22 thousand dollars. It would take you a literal lifetime to recoup your investment. 

On top of that, the franchisor itself is making almost no profit and it is even losing significant amounts of money in some years, this is bad for the franchisees as they do not have a strong company to rely on. 

We cannot, in good faith, recommend Quiznos to anyone. Opening a Quiznos franchise might lead to struggle with little to no profit, and that is exactly the opposite of what we want for our readers. 

We invite you to review our franchise listing for thousands of franchise opportunities.

 

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