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Why Your Quiznos Won’t Give You a Free Sub

Why oh why would Quiznos announce a million sub giveaway, and then issue free sub coupons that your local franchisee won’t honor?

Because Quiznos’ amazing talent for shooting itself in the foot is surpassed only by the speed with which it reloads.

To put it simply, Quiznos corporate decided to give away 1,000,000 subs that weren’t theirs to give away.  Quiznos not only expected its franchisees to foot the bill for the millions in food giveaways, Quiznos corporate would actually make money selling them the ingredients.

Ex-Quiznos franchisee Rich Piotrowski explains:

The reason so many Franchisees are not honoring this coupon is that the company delayed this promo TWICE, as many of the Franchisees said they would not go along unless Quiznos Corporate (which makes about a hundred million a year selling food to its franchisees, and prohibits them from buying food from anyone else) paid for the food in this promotion.

Late last week, Quiznos decided to roll it out anyhow saying no, franchisees would have to pay the entire cost.  Every other system (such as Denny’s Arby’s etc) the cost of the promo was shared by both parties. In addition, most of those system sell food at cost to Franchisees. Like those other systems, Quiznos makes money by collecting a 7% royalty and 4% from franchisees which they say is for advertising. Unlike those other systems however, on top of those fees, Quiznos makes that hundred million IN ADDITION by selling food to them.

And you wonder why Franchisees are not honoring the coupon?

In related news, the SBA has released a report showing that Quiznos franchisees have the highest loan default rate of any franchise chain.  Read:  QUIZNOS, COLD STONE, SUBWAY & CURVES TOP FRANCHISE LOAN DEFAULTS.

And Quiznos CEO Dave Deno has resigned and infamous Quiznos founder Rick Schaden has once again taken the reins to ensure that franchisees continue to get toasted to a crispy brown.  Read:QUIZNO’S: Rick Schaden, CEO… He’s Ba-a-a-ck!, and  QUIZNOS SUB Rick Schaden Back as CEO. Reactions?

WHAT DO YOU THINK?  SHARE A COMMENT BELOW!

Image: Quiznos

MCDONALD’S: Toledo Franchise Owner Leaves an Inspiring Legacy

I never met James Cobham, Jr., or even heard of him until today. I imagine you didn’t, either. 

Too bad for us.

According to his obituary in the Toledo Blade, James Cobham, Jr., 65, was a successful McDonald’s franchise owner who died this past Sunday.  I found it striking that Cobham’s family and friends did not focus on his financial success or his accomplishments as one of the early black McDonald’s franchise owners.  Instead, they recounted James Cobham’s passion for enriching the lives of those who worked for him:

“He always treated people with dignity,” said his wife, Barbara, the firm’s bookkeeper. “That love was like a bond, and [employees] were willing to do their very best.”

He inspired loyalty because he was loyal to employees, said Glenn E. Johnson, who was 15 in 1976 when he went to work at a restaurant Mr. Cobham managed in St. Louis. When Mr. Cobham bought a Toledo McDonald’s franchise in 1984, Mr. Johnson came too as an assistant manager.

Mr. Cobham’s protege became a manager and eventually owned five McDonald’s in Toledo.

“He inspired you. He allowed me to operate his business as if it was my own, which allowed me the opportunity to have the experience,” Mr. Johnson said. “He had a real sense of wanting to help people and seeing people prosper.”

Mr. Cobham had that sense from a young age. He told The Blade in 1991 that all he could do growing up black in segregated Savannah, Ga., was deliver newspapers and cut yards.

“I always hoped for the day where I would be able to give jobs to people,” Mr. Cobham said then.

The eldest of seven, he went to Knoxville College and received a bachelor’s degree from the District of Columbia Teachers College. His first McDonald’s job, part time, was in Washington. He climbed the managerial ladder in Chicago and St. Louis.

Mr. Cobham of West Toledo was a former treasurer of the National Black McDonald’s Operators Association. He was on the boards of Toledo area charitable and community organizations, including as a founding board member of the Toledo Urban Federal Credit Union and the then-Northwest Ohio Black Chamber of Commerce.

In 1993, the City League Hall of Fame inducted him as a distinguished citizen. In 1995, the Business Owners and Professionals Club of Toledo honored him for being the largest Toledo employer of inner-city youth.

Some business owners see their mission as flipping burgers or creating profit & loss statements;  others, like James Cobham, Jr., recognize that they’ve got the opportunity – and responsibility – to change the world.

My condolences to his widow, Barbara, who mourns the loss of her husband and her 38-year old son in the same month.  At least she knows that her husband’s memory and spirit lives on in the hundreds, if not thousands, of lives that he touched.

James Cobham, Jr. clearly shared Martin Luther King’s streetsweeper philosophy, and elevated franchise ownership to its full potential.

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

QUIZNOS, COLD STONE, SUBWAY & CURVES TOP FRANCHISE LOAN DEFAULTS

According to a Wall Street Journal article by Richard Gibson, the number of SBA-backed loan defaults by franchisees increased 52% in the fiscal year ended Sept. 30, 2008, from fiscal 2007. Loan losses totaled $93.3 million, a 167% jump from $35 million just 12 months earlier.

Quiznos Sub had the highest number of loan defaults, with 108 franchisee failures.  Cold Stone Creamery franchises racked up 75 defaults, followed by the Subway franchise with 42 defaults and Curves for Women with 24. 

By percentage of defaults to total loans, meal prep kitchen Dream Dinners had the highest, with 18% of franchisees having defaulted thus far.  Next worse were Taco del Mar and Carvel, with 15.49% and 15.38% defaults, and Cold Stone Creamery with 9.82%.

Fiscal 2008* Loan Defaults at Franchises with 50 or More SBA-backed Loans

FRANCHISE	# Loans 2001-08	# Defaults 2008
1.  Quiznos	1,963	108
2.  Cold Stone Creamery	763	75
3.  Subway	2,148	42
4.  Curves for Women	362	24
5.  Planet Beach	230	22
6.  Aamco Transmission	169	15
7.  CiCi’s Pizza	155	13
8.  Carvel	78	12
9.  Domino’s	242	11
10.  Dream Dinners	61	11
11.  Taco Del Mar	71	11

Source: U.S. Small Business Administration *Year Ended Sept. 30

Who are franchising’s biggest losers in terms of loan default percentages from this list?

FRANCHISE	% 2008 Defaults to Total Loans
1.  Dream Dinners	18.03%
2.  Taco Del Mar	15.49%
3.  Carvel	15.38%
4.  Cold Stone Creamery	9.82%
5.  Planet Beach	9.56%
6.  Aamco Transmission	8.87%
7.  Cici’s	8.38%
8.  Curves for Women	6.62%
9.  Quiznos	5.5%
10.  Domino’s	4.54%
11.  Subway	1.95%

Curves International Inc. chief executive Gary Heavin,  added a bit of levity to the dismal news by claiming “These loan problems were a result of the overpriced resales of franchises between third parties.”  Franchise Pick has published many accounts of Subway resales offered for $1.00 with no takers.

FranchisePick.com and UnhappyFranchisee.com have reported candidly on many of these companies:

CURVES FOR WOMEN,  QUIZNOS,  COLD STONE CREAMERY

CURVES FOR WOMEN: Advice on Buying a Franchise Resale

CURVES FOR WOMEN: List Recent Club Closures Here

Quiznos Franchisee Blasts HQ’s Coupons and Discounts

Curves Franchisee Blames Economy for Closing

Quiznos Overview & Discussion

QUIZNOS SUB Rick Schaden Back as CEO. Reactions?

Cold Stone Creamery franchise on Unhappy Franchisee

What do you think?  Share a comment or insight below.

Photo:  PetroleumJelliffe License:  Creative commons

QUIZNO’S: Rick Schaden, CEO… He’s Ba-a-a-ck!

Quiznos has announced that CEO Dave Deno has resigned and the franchisor’s founder and largest shareholder, Rick Schaden, is taking over the reins again as the chief executive. 

Deno had joined Quiznos as president in 2007 and became CEO last September.  The company statement said he resigned “for personal reasons.”  Schaden had stepped down from day-to-day operations in 2007 after growing the chain from 18 franchisees in 1991 to more than 5,000 today.

In a released statement, Schaden said:

“I am excited about working closely with franchise owners to improve restaurant operations. I also look forward to spending time with the outstanding Quiznos management team developing new products. Moving forward, our strategy will be exactly as it is today. Our primary focus will be on increasing restaurant profitability for our franchise owners by bringing value and convenience to consumers so that they frequent Quiznos more often.”

Quiznos is one of the most controversial major franchise players in the nation.  According to franchise site Blue Mau Mau:

The Quiznos system has been riddled with problems and litigation over the past seven years. According to some lawsuits, franchisees allege that the company has been engaged in illegal and deceptive business practices, inducing unwitting prospects to purchase and operate Quiznos stores. The documents state that with 4,636 franchises in the U.S. today, a number that is continuing to grow, Quiznos classifies the majority of its franchisees as financially distressed.

WHAT DO QUIZNOS FRANCHISEES, INVESTORS & PUNDITS THINK OF QUIZNOS & SCHADEN’S RETURN? SHARE A COMMENT BELOW.

NEXCEN’S PRETZEL TIME to Rebrand as PRETZELMAKER

NexCen Franchise Management Inc. has announced that it beginning this April it will combine its two mall-based pretzel concepts,  Pretzelmaker and Pretzel Time. 

Initially, Pretzel Time locations will transition to the Pretzelmaker name; eventually, most Pretzelmaker locations upgrade to a new logo and store design. According to QSR Magazine:

The consolidation of Pretzel Time into Pretzelmaker will create the second largest soft pretzel brand in the U.S. with over 365 locations across 47 states and four countries outside of the U.S. In April, NexCen Franchise Management will begin to convert approximately 30 Pretzel Time stores a month into Pretzelmaker units. This will be followed by an initiative to update existing Pretzelmaker locations with the new logo and store design. NexCen Franchise Management has already converted seven Pretzel Time locations in several domestic test-markets. So far, the responses from mall developers and franchisees involved with early conversion and development have been positive.

Pretzelmaker and Pretzel Time both emerged as independent knock-offs of the successful industry leader Auntie Anne’s Soft Pretzels.  Both chains were acquired by Mrs. Fields Brands, and subsequently sold to the financially troubled NexCen brands.
Graphics: Nexcen Brands

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

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CUPPY’S COFFEE: A Franchise Without a Franchisor

If ever there were a group in need of an economic bailout, it would be the hundreds of victims of the most blatant franchise scam in recent history:  Cuppy’s Coffee.  Just in case any government official or agency cares (why start now?), there are three distinct groups of victims struggling to recover from their own financial Katrinas:

Cuppy’s Coffee “Depositers”:  As many as 100 or more individuals paid upfront construction deposits ranging from $29,500 to more than $100,000 that were to be returned if they failed to find a location or secure financing for the project;  however, when they requested their refunds they got nothingbut a runaround.

Cuppy’s Coffee “SNO-ed” Franchisees: Dozens of Cuppy’s Coffee depositers who were able to secure funding commitments from lenders for their $150K – $300K investments ended up in the industry category of “Sold Never Opened” (SNO).  Since the Cuppy’s construction entities (Elite Manufacturing, Supreme Building Technologies) were more efficient at collecting payments than paying subcontractors, fulfilling commitments, not getting sued  and avoiding bankruptcy, many SNO-ed franchisees ended up with unfinished sites, liens on equipment they paid for, massive debt and no coffee shops.

Cuppy’s Coffee “Orphan” Franchisees: The final group of Cuppy’s Coffee victims consists of those who somehow battled through the process, incurred extra expenses of $100,000 or more, and somehow managed to get their cafe or drive-thru unit opened despite the fact that the parent company and related entities have disappeared and the corporate officers seem to be in hiding.  Of course, the challenges facing these businesses are enormous, as they are burdened with extra debt and expenses while receiving none of the franchise support they were promised.

Despite the odds, orphaned Cuppy’s Coffee continue to open somehow.  Some recently opened locations include:

Cuppy’s Coffee – Wilmington, DE Claudia & Alan Robbins managed to open in November, 2008.

Cuppy’s Coffee – Eagle, ID Franchise owners Larry and Marci Addleston opened their cafe December 8, 2008

Cuppy’s Coffee – Clawson, MI Franchise owner Steve Ott opened January, 2009

Cuppy’s Coffee – Mansfield, OH Franchise owner Bill Lewis celebrated his Grand Opening February 6, 2009

[Photo, right, Claudia Robbins promoting her Cuppy's Coffee in Wilmington, DE with a local team mascot.  Claudia is the one on the left.  Photo courtesy Cuppy's Wilmington]

ARE YOU FAMILIAR WITH CUPPY’S COFFEE?  DO YOU HAVE A LOCATION TO LIST?  SHARE AN INSIGHT BELOW.

CORK & OLIVE: Bankrupt Wine Store Franchises Being Auctioned

The contents of two bankrupt Cork & Olive wine stores are up for auction.

See them here:  Bay Area Auction Services

Read more about the Cork & Olive WINE STORE FRANCHISE woes here:

Cork & Olive Franchise

CORK & OLIVE: Michael Probst Forms New Corporation

CORK & OLIVE: Oldsmar Store Reopens; C&O Coming to Ocala?

CORK & OLIVE: New Ownership & Franchise Rumors

CORK & OLIVE: The Probst Method of Guilt Avoidance

ARE YOU FAMILIAR WITH CORK & OLIVE?  SHARE A COMMENT BELOW.

Image:  Bay Area Auctions

1-800-DRYCLEAN: Failed Franchisee Taken to Cleaners?

A commenter named James claims he was taken to the cleaners by Service Brands, Int’l.  He recently closed his 1-800-DRYCLEAN franchise.  What do you think?

My name is James, I owned a 1-800-Dryclean franchise. 1-800-DryClean is a national franchise operation. The franchisor’s U.S. home office is in Ann Arbor, MI. 1-800-DryClean is part of Service Brands International whose brands include MOLLY MAID and Mr. Handyman. We deliver dry cleaning door-to-door. I feel that I have been wronged from Service Brands International, which has 600 Franchises under its name. I believe that they are selling territories that they know will not be successful. I have invested around $75,000, $45,000 for the franchise initial start up, and the rest, expenses of trying to get this route up and running, this is an estimate, the money could be more. On October 24th , 2008, I went out of business. The home office sent out a letter to all of my customers that stated that I am out of business and if you would like to own a business in Leominster, MA please let them know. They are trying to sell this territory, knowing full well that it will never reach the goals that they have set. I believe they are just trying to get the initial franchise fee, which is around $45,000.

Here are some of the many complaints I have against Service Brands. I have been fighting with them through emails on almost all of these points through the last couple of years and have kept all of the emails. At one point, it seemed liked they were going to change some of their policies, but never did.

READ ON @ UNHAPPY FRANCHISEE.

ARE YOU FAMILIAR WITH SERVICE BRANDS FRANCHISES?  THE 1-800-DRYCLEAN FRANCHISE? SHARE A COMMENT BELOW.

LA WEIGHT LOSS: New York Members to Receive Refunds

New York Attorney General Andrew Cuomo announced last week that LA Weight Loss Centers Inc. reached a settlement to pay $275,000 in refunds to thousands of New York state customers who paid for but never received services after LA Weight Loss closed its doors in January 2008.

Read more here: LA Weight Loss to Pay Refunds to New York Members

Also Read:  LA WEIGHT LOSS, PURE WEIGHT LOSS

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