Quiznos Plans Overseas Franchise Push

Quiznos is planning to bring its sandwiches to 15 new markets in the next two years, boosting its total international presence to 40 countries and territories.

The Denver-based chain, which now has nearly 4,000 restaurants in 25 countries and territories, is focusing on opening new ones in Europe, Southeast Asia, Central and South America, and the Middle East. The company estimates it will open several hundred restaurants overseas in the next five years. Quiznos will team up with international partners, or “master franchisees,” who buy the rights to develop Quiznos in certain countries, purchase the real estate and build the restaurants, and franchise them out to local operators to run while paying Quiznos annual royalties. Lee Vala, Quiznos chief development officer, has strengthened the global development structure with an executive training program for prospective international franchisees. It features in-depth training at corporate headquarters in Denver, lengthy in-store training, and an extensive ground-support program.

The chain’s franchising system has been under scrutiny in the United States. Just days prior to the expansion announcement, a federal judge upheld four class-action lawsuits brought by disgruntled franchisees against Quiznos Franchise Co. and its parent company, QCE Holdings. The settlement, valued at an estimated $200 million, focused on the plight of franchisees who took on personal debt and allegations revolving around Quiznos’ supply chain and food costs; marketing funds; and royalties disputes among franchisees that agreed to but did not open locations. Quiznos has denied all claims made in the lawsuits and the settlement agreement involves no finding or admission of liability. In addition to financial compensation or debt forgiveness, the settlement calls for business changes to the Quiznos franchise system, including the creation of an independent franchisee association.