Shuttered Quiznos highlights franchise failure problem

Another Quiznos franchisee is closing shop, accusing the sandwich chain of “leaving me out to dry.” After almost 20 years of running a St. Louis-area shop, Mike Barron joined the thousands of Quiznos franchisees who have shut their stores in recent years, as Quiznos shrank from 5,000 units in 2006 to about 1,000 last year. Barron told his hometown paper that:

…the company has done little to support franchisees while shifting away from its menu with new items that have not been as successful. … “They don’t want to help. I thought if I stuck around I would reap the rewards of it all. Everything would come my way, but my sales went down.”

Earlier this year Quiznos told franchisees it planned to “aggressively close underperforming stores, and to aggressively default franchisees and bring back fines for franchisees that are not following company operating procedures.”

Unfortunately, the problem of franchisee financial distress goes far beyond Quiznos: A WeAreMainSt report found that federally guaranteed loans to franchisees are failing at a high and rising rate. As the head of franchising research group FranDATA observed:

…for most single-unit franchisees the cost of a failed unit is absolute and often devastating. It can represent the loss of a business, the loss of most of a franchisee’s personal net worth, the loss of their main source of income and job, the likely loss of other jobs, and the resulting impact on many families.

Franchisees are urging the Federal Trade Commission to investigate problems in franchising. To add your voice, sign here.