International Law

Want to Buy a Quiznos? Listen Up.

From the ever interesting Blue Mau Mau, we get an insider's look into the costs of a operating a Quiznos franchise.

First lesson: the cost of staying open.

"We transferred our Quiznos over 23 months ago.

Our weekly labor ranges between 22% to 25% - the goal is 20%. Average food costs range between 30% to 33% the goal is 30%.

Not only have we not made money, but we have lost over $45,000 in the last twelve months in addition to $34,000 during the first 11 months.

Additionally, another Quiznos near my location is also showing similar dollar losses based upon information that the owner has shared.

I realize that there are poor stores in the system. It is unrealistic to assume that every owner runs a great operation. However, our store has one of the highest customer approval ratings in the area."

Ok, so high customer approval is meaningless when it comes to profits. Not a good indicator. What is next? Can you sell and get out?

"We realized that we were not going to make money two months into our venture. We put our store on the market right away.

Today, almost two years later, we have been forced due to financial constraints to give it away.

Another owner has offered us $90,000 and we are finally getting out. He knows that he will make a profit because at $90,000 it is a positive net sum gain for him.

A store cannot even be constructed for $90,000. He has said that based upon our P&L and the price that he is paying; he will probably make about $30,000 - perhaps $35,000 per year at our location.

The key to profitability according to our buyer, is owning several that were purchased for very little and planning to make about $30 - $50K per location based upon the traffic flow of each individual store.

The key is to pay a low as possible for a store in order to squeeze out a profit from each location."

Listen up if you are buying a new Quiznos location. It looks like that you are going to fail, and have someone pick up your investment for 25 cents on the dollar. Interesting, eh?

Full post as published by Misleading Advertising Law on April 01, 2008 (boomark / email).