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BY MALLORY PERRYMAN
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Toasty-- tasty -- but evidently not recession-proof. The Wall Street Journal reports -- sub shop Quizno’s is on the brink of defaulting on its loans.
“The chain has hired Wall Street restructuring advisers to negotiate with its lenders, and said it has taken steps, such as cutting food costs, which it hopes will improve cash flow. But it continues to face business setbacks... [including] sour relations with franchise owners...”
Bloomberg’s Jane King explains to KATU -- the sandwich joint is falling behind its competition.
Jane King (Bloomberg): “The chain is losing the battle to Subway. They’ve hired advisers to help restructure and negotiate with lenders. The chain has closed nearly 1500 stores in the past several years.”
Besides fending off rival Subway, Quiznos has also battled its own stores-- settling five lawsuits with franchise owners in 2009. Franchise Hound recommends franchise-hunters stay away.
“It seems like Quiznos is going to need more than just a few advisers to help their current situation. While they may receive some financial relief and debt forgiveness, it’s most likely a case of ‘too little too late’ for this struggling brand.”
Finally -- Gawker explains the sub shop’s struggle in layman’s terms.
“Quiznos sales are down because everyone's buying $5 footlongs at Subway now, so, you know, I don't see the ray of light at the end of the baguette, here? The death watch is on.”
The Wall Street Journal reports -- if Quizno’s does default on its loans, it could trigger calls for immediate debt repayment.
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