When a Maryland business is struggling to stay afloat, they make take extreme measures in order to reduce debt and bring in new business. Sandwich chain Quiznos, which recently filed for Chapter 11 bankruptcy, is making drastic changes to its Business formation in order to keeps its doors open despite a staggering debt of $400 million.
A large portion of this debt is due to lawsuits and settlements. The company has been sued by franchise owners who claimed that Quiznos charged exorbitant markup fees on its food and equipment. These fees made it difficult for franchise owners to make any money, with many being forced to shut down their stores.
Now, Quiznos is hoping to change all that by taking steps to improve the company's image and make life easier for franchise owners. The company is looking to increase flexibility and advertising, while offering reduced prices, rebates and other incentives to franchises.
Quiznos' overwhelming debt has kept it from performing at the peak levels it saw in 2007. In the United States, Quiznos has about 1,500 franchises, none which are involved in the bankruptcy. The company expects business as usual during the bankruptcy and business restructuring, which is expected to begin right away.
Business reorganization is sometimes essential in order to get a company back on its feet after a financial setback. However, Quiznos has a lot of work to do in order to start becoming profitable again. The company has some good ideas to get back on track, but with $400 million in debt, is it too late or does the company have a chance to reinvent itself with a little time and patience?
Source: Guardian Liberty Voice, "Quiznos Restructuring Business Plan" Christina Thompson, Mar. 15, 2014