Quiznos CEO Stuart Mathis stated in today’s statement that the organization proposes to cut food costs to the stores, make loans available to some franchisees for improvements to invest in advertising, as well as add technology to boost efficiency of the organization as a whole. The strategic move of Quiznos bankruptcy is a vital signal that the quick service standard has evolved concerning price point and the amount of brand equity, which resonates with consumers. Although Goldin suggests, “They expanded too fast, they had a weak franchisee network”.
Alix Partners studied 110 restaurant chains across four main categories: fine dining, casual dining, fast casual and QSRs. It also surveyed 1,000 consumers about their recent dining habits and expectations for future spending. Forty-eight percent of respondents said they plan to eat out less frequently in the coming year, while 51 percent predicted their average spend per meal would be $10 or less, up from 42 percent for 2008.
"While certainly there are healthy companies in every restaurant category, our analysis suggests that, without aggressive intervention, up to 40 percent of chains face the possibility of a severe liquidity crisis, which could mean failure, within a year," said Andy Eversbusch, a managing director at AlixPartners and leader of the firm's Restaurant and Food Services Practice. "Overall, we found declining growth rates and declining same-store sales in all four sectors, as well as declining EBITDA in three of the four sectors, with only quick-service restaurants bucking that latter trend."
“Once the Panera’s of the world came along, I think, many consumers thought that was a better quality price point. And Subway came in on the lower end and aggressively promoted themselves as fresh.”
Rebranding of Quiznos as efficient, fresh and economically friendly on the wallets of many Americans would not be perceived as a weakness among the competition. The lessons to implement as the restructuring process takes place are to take note of Panera Bread’s financial strategy one of several fast food establishments, avoiding the liquidity crisis, which enables a debt free organization.
While many organization filing bankruptcy never emerge from it, Quiznos has the ability to not only emerge with a new image; they have the opportunity of implementing integrated marketing strategies across all promotions of the organizations to remain as one cohesive unit as opposed to marketing single franchises with the perception it’s part of a cohesive unit.