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    28 Replies Latest reply on May 31, 2010 3:38 AM by Mongoose

    Subway vs. Quiznos: which franchise is better?

    blitzlocal Adventurer
      Would enjoy hearing viewpoints of what experience you might have.
      There are 25,000 Subways out there and only 5,000 Quiznos-- so more opportunity for Quiznos.
      Plus, Quiznos, in my humble opinion, has better food-- but at a higher price.
      And the franchise fee is a lot higher for Quiznos, which must reflect something about the opportunity.

      Could you share your thoughts here please?

      Dennis
        • Re: Subway vs. Quiznos: which franchise is better?
          DomainDiva Ranger
          For my hard earned money: Subway. Always fresh and I have never had a bad sandwich no matter where I have been in the USA.

          Quiznos is .. just not good. All sorta fried/heated and mooshed and squished was what I had the one and only time I have ever eaten there.
          • Re: Subway vs. Quiznos: which franchise is better?
            intechspecial Ranger

            Quizno's - Reaches out to the average American, who desires to get a good sub, but is not worried about health.

            Subway - Known to the average American as being a salad on a bun, but to the health-consciensous American is known to be the best choice of all the fast food restauarants out there.

             


            MY VOTE GOES TO SUBWAY!
            • Re: Subway vs. Quiznos: which franchise is better?
              Lighthouse24 Ranger

              I like Quiznos better as a customer -- but as a business decision, I'd be more likely to look into a Subway franchise. I think it's a little better operational model. A lot depends on the location, however, and where specifically the store would be sited. There are specific types of locations and customer bases for which one is definitely better suited than the other. I would be seeking input from people who live, work, go to school, play, etc. near your prospective store site(s).

              Good luck!
              1 of 1 people found this helpful
              • Re: Subway vs. Quiznos: which franchise is better?
                NoBullFunding Scout
                I know of one very large SBA lender who will no longer finance any quizno's because they have begun to fail in droves. There are lawsuits pending because quiznos was requiring franchisees to buy provisions from their vendors, and were getting slaughteres.
                  • Re: Subway vs. Quiznos: which franchise is better?
                    Navigator
                    NoBullFunding: I'd like to know more about the lawsuits against Quiznos and the failing franchisees. I've heard some of the stories, but also would like to know what you've found aswell.
                      • Re: Subway vs. Quiznos: which franchise is better?
                        NoBullFunding Scout

                        What I heard is that they were putting undue burden on the franchisees by having them deal with vendors who charge prices above market prices. I found a good article about it:

                         


                        Illinois Franchisees File Class Action Suit Against Quiznos Sub

                         

                        This press release was just issued by Marks & Klein LLP, litigating attorneys.

                         

                        Also read Janet Sparks interview with Chris Bray, President of the Toasted Subs Franchisee Association, Inc. published on BlueMauMau.org

                         

                        Illinois Franchisees File Class Action Suit Against Quiznos Sub
                        2007-04-19 20:23:17 -

                         

                        CHICAGO, April 19 /PRNewswire/ - A class-action lawsuit was filed against Quiznos Sub today in the U.S. District Court for the Northern District of Illinois, alleging that the company has systematically defrauded its franchisees in a scheme designed to build the brand at the expense of its operators in the field.

                         

                        Among other things, the lawsuit contends that the company forces franchisees to buy food, supplies, and services from Quiznos or its affiliates at inflated prices while concurrently setting artificially low retail prices for its products - in many instances, making the stores unprofitable for the franchisees. In addition, the plaintiffs allege that Quiznos unlawfully participates in a scheme to sell the franchises by omitting or otherwise misrepresenting key facts about Quiznos' business operations in an effort to induce potential franchisees to buy into the system. In seeking damages for lost investments as well as injunctive relief, the suit alleges, among other things, statutory and common law fraud, violations of federal and state antitrust laws, violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act, breach of contract, and violations of Illinois franchise and consumer protection laws.

                         

                        The suit in Illinois is the third class-action brought on behalf of Quiznos franchisees in less than a year, according to Justin M. Klein, Esq., a partner in the Red Bank, N.J. law firm of Marks & Klein, LLP. Klein also represents the plaintiffs in similar actions filed on behalf of Wisconsin and Michigan franchisees, joined by Mark M. Leitner and Joseph S. Goode of the Milwaukee-based law firm of Kravit, Hovel & Krawczyk S.C.

                         

                        "Quiznos has been taking advantage of its franchisees for years through practices that we contend are illegal and in violation of the franchise agreement," said Chris Bray, president of the Toasted Subs Franchisees Association, Inc. (TSFA), a trade group representing Quiznos franchisees that helped organize the class-action suit. Bray, who owns two locations in Texas and has been a franchisee for nine years, said Quiznos "has slowly, methodically and deliberatively modified the business model, year over year, to inflate corporate profits at the expense of franchisees system wide. This has led to a lack of franchisee profitability and excessive store closures. It is time to put a stop to this."

                         

                        Added Klein: "There are Quiznos franchisees around the country that have been and continue to be injured and we will continue to fight to protect their interests."

                         

                        Defendants in the Illinois lawsuit include, among others, The Quiznos Franchise Company, LLC, and Quiznos Franchising LLC, both of Denver, Colo.; various affiliates of the company; Richard E. Schaden of Lafayette, Colo., and Richard F. Schaden, of Westminster, Colo., the father-son owners of Quiznos; and Cervantes Capital, LLC, of Denver, which is alleged to run the Quiznos operations. The plaintiffs in the class action are all operators of Quiznos franchises in Illinois.

                         

                        In April 2006, Quiznos announced that J.P. Morgan Partners, the private- equity division of J.P. Morgan Chase & Co (JPM) would acquire a significant share of Quiznos pursuant to undisclosed terms. Since the acquisition, the company has replaced its CEO with former Burger King CEO Greg Brenneman. Almost one year later, in a February 24, 2007 article published in the New York Times, Brenneman acknowledged historical problems with the franchise and vowed to work to correct those problems. In that article, Brenneman is quoted as saying, "it was clear when he got involved with the company that food costs, as a percent of revenue were, quite honestly, out of line ..."

                         

                        "Management changes are a step in the right direction, but there is still a lot of work that needs to be done before there can truly be a synergy between Quiznos and its franchisees, and even that won't help all of those that have already been damaged," concluded Klein.
                    • Re: Subway vs. Quiznos: which franchise is better?
                      restaurantmom Newbie
                      Dennis,

                      What you need to do is speak with the franchisees of these concepts in your area. Both have their risks. Subway has brand recognition but I understand that franchisees are not happy with the profit margin on the $5 footlong campaign they are required to participate in.

                      Also, Quiznos has definately experienced trouble with the high food costs passed along to their franchisees.

                      When investigating a franchise ask the franchisee what their food costs are and what their overhead expenses and payrolls costs are. They may or may not tell you what they are making specifically, but if you ask them how many customers they average per day and what the average ticket is you can do the math.

                      Also consider with Subways numbers, the placement of the stores. Ask the owner if center placement is an issue. If you enter into a franchise agreement for a Subway there is no guarantee that another Subway won't open up later in the same neighborhood.

                      Also good to consider other options. Look at Entrepreneur Magazines list of top sandwich shops if that is your interest. Extreme Pita is the top in the pita sandwich catagory and sometimes people are looking for something new.

                      Just something to consider.
                      1 of 1 people found this helpful
                        • Re: Subway vs. Quiznos: which franchise is better?
                          blitzlocal Adventurer
                          RestaurantMom-- thanks for the helpful advice!
                          Do you own several restaurants? How did you get involved in restaurants?
                          Gee-- I wish there was the ability to "friend" folks or send private messages on this forum.

                          Dennis
                            • Re: Subway vs. Quiznos: which franchise is better?
                              Navigator
                              Blitzlocal: Yeah, would be great to private message people instead of having to openly respond

                              RestaurantMom: Amazing post, and i agree about Subway and the chains sprouting near each other, inadvertantly choking out business. Both franchises are not without their problems, so i guess it comes down to personal preferenceson what style of sandwich you're after.
                              • Re: Subway vs. Quiznos: which franchise is better?
                                restaurantmom Newbie
                                Dennis,

                                I was out of town for a few days, just got back to see your response. I do currently own a QSR in San Diego. It is a franchise. I had 10 years of experience in the franchise industry but not in food, so making the leap was a big one. I was very comfortable going with a franchise becasue of all of the support you get from the "right" concept, that is why it is important to do your homework.

                                I left the corporate world so I could spend more time with my young children. With the exception of the last couple of weeks due to the economy, I was very pleased with how the restaurant was going. I do not own either a Subway or a Quiznos, but work with people who have both owned and worked for the corporate offices of these companies.

                                It could be less important about how the concepts you are investigationg are doing overall. I don't believe that either of those concepts are corporately failing, although individual franchises do. Important to consider is your market, where you are interested in opening your restaurant. What are the demographics. Being that I am in So. Cal we have a healthier mind set, and our residents demand/expect options along those lines. I went with something that I believed the consumer would respond to that is similar but different than Subway or Quiznos.

                                Just something else to think about.
                            • Re: Subway vs. Quiznos: which franchise is better?
                              abizkw Newbie
                              In my opinion, Quiznos has many more better tasting subs and a more interesting variety. The only advantages Subway has on Quiznos, is the image of being "healthier," which may or may not be true, and being slightly cheaper. Unless I have less than 6 bucks on me, I'd go Quiznos any day.
                              • Re: Subway vs. Quiznos: which franchise is better?
                                BlitzJordan Newbie
                                In my experience I have always thought that Quiznos may have been more expensive, but the sandwich is just that much better than Subway for me.

                                As far as franchises I think restaurantmom did a very nice job of explaining.
                                • Re: Subway vs. Quiznos: which franchise is better?
                                  CARZ4YOU.COM Newbie
                                  I like both, but visit Subway more, better price, faster service, healthier. Why not think big? Start your own sub shop, use the franchise fee to get you going, local restaurant supply company's will help you with inventory, maybe someday (if you work hard and are creative) you too can franchise your business. A franchise is not a guarantee of success, it's still a risk, just ask someone who has failed.</e<br /> Several years ago we looked into car dealership franchises, after lot's of due diligence we decided to create our own brand http://www.carz4you.com It's been GREAT ! We have not decided to franchise yet, but it is an option available to us. What ever you decide to do, be prepared to work hard and long hours if you expect to make it, the rewards are worth the sacrafice.+*

                                  + Dave Wilson ceo+
                                  *+ CARZ4YOU.COM+ *
                                  • Re: Subway vs. Quiznos: which franchise is better?
                                    thesyz Newbie

                                    Hi Dennis -

                                    If you are considering purchasing either franchise, there is another question that it seems you might want to ask. Are you sure that you have done enough research to narrow your choices to two? The reason I bring this up is because of something you said.

                                    And the franchise fee is a lot higher for Quiznos, which must reflect something about the opportunity.

                                    My specialty is franchise and business opportunity consulting, and from my experience the franchise fee has very little to do with the opportunity. That is to say, just because the franchise fee is higher doesn't mean that the quality of the business is better. There are great opportunities with low fees, and some of the worst opportunities come with very high fees.

                                    Patrick
                                    • Re: Subway vs. Quiznos: which franchise is better?
                                      koz4change Adventurer
                                      Neither, look into a Jimmy John's franchise, especially in a college or business region. The company is really growing.
                                      • Re: Subway vs. Quiznos: which franchise is better?
                                        Navigator
                                        Have you seen the Quiznos Franchises Facebook fan page? They are gaining traction against Subway-- Facebook is where people are going to leave reviews and share experiences.

                                        Dennis
                                        dennis@blitzlocal.com