Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Quiznos to file for bankruptcy amidst debt and declining sales
Author: Joel R. Glucksman
Date: March 25, 2014
Key Contacts
Back
Global sandwich chain Quiznos is preparing to file for protection under Chapter 11 of the bankruptcy act. According to reports published the evening of Feb. 27, the one-time fast food giant has accumulated about $570 million in debt and is experiencing declining sales nationwide.
Quiznos has been negotiating with creditors and unhappy franchisees for weeks to put together a restructuring plan that will help to ease the bankruptcy process, reported The Wall Street Journal, but thus far a deal has not been reached.
Two years ago, the chain underwent a major effort at turning business around, which included an out-of-court debt restructuring and change of management, according to the news source. While these efforts didn’t manage to change the company’s slide into bankruptcy, a Chapter 11 filing may be able to give Quiznos the flexibility on leases and contracts that it needs to turn things around.
A major challenge that the company will face, even if the bankruptcy filing is successful, is the damaged reputation that it now holds with its franchisees, who feel that the company has been attempting to squeeze more money out of them than is fair. Darren Tristano, executive vice president at restaurant consulting firm Technomic Inc., told The Wall Street Journal that the franchise fees charged by Quiznos – 7 percent in royalties and 4 percent in marketing – are higher than the industry average of 6 percent in royalties and 2 percent in marketing.
Since the company’s hey-day in the mid-2000s, its U.S. store count has fallen from more than 5,000 to about 1,200, according to CBS News. The average store’s sales have also fallen from an annual $425,000 per year to only $300,000 for the best performing stores, with weaker stores doing considerably worse.
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Commercial Real Estate Trends to Watch in 2026
Commercial real estate trends in 2026 are being shaped by shifting economic conditions, technological innovation, and evolving tenant demands. As the market adjusts to changing interest rates, capital flows, and workplace models, investors, owners, tenants, and developers must understand how these trends are influencing opportunities and risk in the year ahead. Overall Outlook for Commercial […]
Author: Michael J. Willner
One Big Beautiful Bill: New Tip Income Tax Rules Employers & Workers Need to Know
Part 2 – Tips Excluded from Income Certain employees and independent contractors may be eligible to deduct tips from their income for tax years 2025 through 2028 under provisions included in the One Big Beautiful Bill. The deduction is capped at $25,000 per year and begins to phase out at $150,000 of modified adjusted gross […]
Author: Scott H. Novak
One Big Beautiful Bill: New Overtime Tax Rules Employers and Employees Need to Know
Part 1 – Overtime Pay and Income Tax Treatment Overview This Firm Insights post summarizes one provision of the “One Big Beautiful Bill” related to the tax treatment of overtime compensation and related employer wage reporting obligations. Overtime Pay and Employee Tax Treatment The Fair Labor Standards Act (FLSA) generally requires that overtime be paid […]
Author: Scott H. Novak
New York’s FAIR Business Practices Act: What the New Consumer Protection Measure Means for Your Business
In 2025, New York enacted one of the most consequential updates to its consumer protection framework in decades. The Fostering Affordability and Integrity through Reasonable Business Practices Act (FAIR Act) significantly expands the scope and strength of New York’s long-standing consumer protection statute, General Business Law § 349, and alters the compliance landscape for New York […]
Author: Dan Brecher
How to Reduce Legal Risk as Your New Jersey Business Grows in 2026
For many New Jersey businesses, growth is a primary objective for the New Year. However, it is important to recognize that growth involves both opportunity and risk. For example, business expansion often results in complex contracts, an increased workforce, new regulatory requirements, and heightened exposure to disputes. Without proactive planning, even routine growth can lead […]
Author: Ken Hollenbeck
Crypto Investor Protection: SEC and CFTC Enforcement Trends
Crypto investor protection continues to evolve, with the SEC and CFTC investing resources and coordinating more closely to uphold regulatory standards. Whether you’re a retail investor, an institutional trader, or part of a crypto startup, understanding enforcement trends is essential for navigating this dynamic and high-stakes regulatory environment. Crypto Is No Longer the Wild West […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.