Fast food chain Quiznos announced on Friday that it had filed for Chapter 11 bankruptcy in Delaware. The news comes within a week of pizza chain Sbarro’s filing bankruptcy papers in Manhattan, N.Y.
With fast food chains filing for bankruptcy in quick succession, it makes you wonder, “Who’s next?”
As for Quiznos, their woes are blamed on two separate but not too surprising factors. First is the heavy competition between fast food restaurants in recent years, especially coming out of the recession.
“It’s survival of the fittest,” said Bob Goldin, executive vice president at Chicago-based restaurant researcher Technomic Inc. “The market is not growing, or it’s barely growing, so the weak players are getting weeded out.”
Some fast food chains, such as McDonald’s, brilliantly met the challenge of getting customers into their fast food joints through the offering of cheaper food, such as a “dollar menu”.
Quiznos? Well, their subs weren’t exactly the least expensive fast food items around.
The Denver-based Quiznos is also have thought to have expanded to at an alarming rate.
Quiznos files for bankruptcy…. Still known as Subways slave
— Benji Pfeffer (@PfefferBenji) March 15, 2014
$14 subs… they did that to dem bloodclot self RT @globeandmail: Quiznos files for bankruptcy http://t.co/rW1fF3WkOS pic.twitter.com/50SIUPKrc1
— suprocyram (@buckingfitch) March 14, 2014
Check out: Quiznos files for bankruptcy http://t.co/Th0vSW9ft7 about time, can't believe it lasted so long…..
— FCB-J (@BlaugranaJ) March 15, 2014
Said Goldin, They had a weak franchisee network.” Goldin also blames the sandwich chain’s woes on having to compete with the “Paneras of the world”.
Goldin also references the restaurant chain’s main competition in the sandwich and sub realm: Subway. Goldin said that the rival, “came in on the lower end and aggressively promoted themselves as fresh.”
Being unable to compete with the newer, hungrier companies for younger customers or make itself attractive to more financially cautious, post-recession customers seems to have led to Ouiznos downfall.
The toasted-sub pioneer must now hope that restructuring itself and the elimination of $400 million of its $500 million debt can help the restaurant chain find a way back. The company says their plan has the support of lenders.
Quiznos is hoping that a loan for $15 million will enable it to make the restructuring process happen. If this doesn’t work out, the company will likely fade away in a few years time.
Image via Wikimedia Commons
