Quizno's dilemma

Submitted by Fayaz on Tue, 08/11/2009 - 1:49pm.

 

 
 

These are some clippings I found on the internet. It is everything I have been saying; you need a protected territory and do your due diligence...


Quiznos Sued Over Franchise Agreement

Quiznos franchisee Richard Piotrowski and the story of his win in court against the franchisor keeps spreading. The news clipping on YouTube is described by a richiep41. He writes:

"Quiznos, a company that is known for suing and being sued by their franchisees more then any other chain out there, in 2006 wrongfully terminated contracts with hundreds of their franchisees. In the majority of those cases, the Franchisees just took their lickings and let themselves be "fined" by Quiznos. Why? Because it is not easy for a mom and pop business to go up against a huge corporation. One couple however, with the help of a couple of very dedicated lawyers, took on this billion dollar company and beat them in court. Here is the Fox News coverage about their win against Quiznos. Quiznos still says they did nothing wrong even though the Judge called them "schizophrenic and confused" in his ruling and came close to issuing a contempt of court charge against them for lying under oath."


Story above missed the highlighted claims of the lawsuit. Specifically that Q changes the agreement to the detriment of franchisees. Not mentioned is the little clause that says Q purchases of food and other supplies will be done for the benefit of franchisees. In return franchisees are forced to buy everything off the truck. Our food costs are 40+%. That benefits me?

THE CLAIMS

Among the claims in the lawsuit:

Quiznos “engages in a policy of fraudulently and deceptively inducing franchisees to purchase Quiznos franchises” as it intentionally misrepresents terms of the franchise contract, changes policies with no warning, and also misrepresents financial predictions and the likelihood a franchise will succeed.

Oversaturates a geographical area with more franchises than the market can support and doesn’t conduct research into whether an area can support even a single franchise.

Forces stores to buy food and supplies at a high price from company-mandated suppliers and won’t allow stores to get cheaper products from other suppliers.

Forces stores to accept coupons for free or discounted food but doesn’t reimburse the stores, cutting into the stores’ profits.

Once a store fails and closes, Quiznos threatens to make franchises liable for royalty payments laid out in a 15-year agreement.

 

Get A Protected Territory Or End Up Like Quiznos

As a Quiznos franchisee I urge anyone who looks at a franchising opportunity to insist on a protected territory or walk away. Unscrupulous organizations like Quiznos take full advantage of the loophole to put four and five stores within a few miles of each other despite the long-term damage. And even with the greatest chain circumstances change or the franchisor gets bought and the priority changes from long-term to short-term. Competition is rough enough with other chains, why compete against yourself?
By Guest2008-07-06 05:57

Fayaz Karim, 949-253-4610, or e mail me your comments

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