After two years away, Richard Schaden is back at Quiznos. But according to the Toasted Subs Franchisee Association, he never really left.
Quiznos asked Schaden, the company's founder and a major shareholder, to return to his former spot as CEO after Dave Deno resigned from the position. Deno, who was no longer willing to make the commute from his home in Louisville, Kentucky, to head the Denver-based company, was appointed CEO only seven months ago.
“What the chain picks up [by appointing me] is a very restaurant-focused, unit-level-focused CEO, and I think it's probably a good time for that,” says Schaden, who opened his first Quiznos when he was 22 years old and plans to focus on expanding internationally and creating a new value menu. “As I came back in, I've had an overwhelmingly positive reception.”
But not everyone has been thrilled with Schaden's appointment, which was announced Feb. 23.
The Toasted Subs Franchisee Association (TSFA), a coalition of independent Quiznos franchisees frustrated by the company's high-priced supplies and lack of communication with franchisees, is disappointed to see Schaden return.
“Rick is nothing new to the company,” says Brad Shelton, a spokesman for the TSFA. “He's always been there in the background.”
Although Schaden left his role as CEO in 2007 to create the quick-serve chain SmashBurger and to work with two nonprofits that his family founded, he remained Quiznos' chairman and one of the company's major shareholders.
But, according to Shelton, Deno's departure is proof that only shareholders—who are set on maintaining the current business model—have power. “The new management team failed to right the sinking ship,” he says.
Schaden says one of his main focuses as CEO—after making Quiznos the go-to brand for hungry customers—is to improve what has historically been a rocky, law suit–plagued relationship between the company and its franchisees.
“My No. 2 job is to make sure my franchise partners increase profits in this environment,” Schaden says. He plans to make that happen by rolling out a new Everyday Value Menu and returning to Quiznos' edgy marketing past thanks to the company's new advertising agency, Nitro.
“We're going to be a lot more visible than we have been in quite a long time,” Schaden says. “That's what our franchise owners want.”
Schaden also plans to open 30 company stores this year, something that he says will help corporate better align with the issues facing franchise owners.
But Shelton insists their desires are simple and still not being addressed by the company.
“The franchisees want to be able to make money in the system,” he says. “With the food and paper costs so high, it's virtually impossible for franchisees to make money.”
Schaden, who has owned up to 20 Quiznos in the past, is no stranger to the franchisee experience.
“I paid my bills for eight years running these restaurants,” he says. “My goal is a year from today to make sure [franchisee partners are] better off than they are right now.”
While he says food and supply prices are “fairly competitive,” Schaden plans to implement a new menuboard that will decrease food costs. Additionally, he has started offering franchisees free lease-renegotiating services to help them take advantage of dropping retail rents.
But Shelton remains pessimistic about the future of Quiznos' franchisee-corporate relations.
“We don't see any change right now,” he says. “This is the same thing we've had for years.”
And despite quick exits from former CEOs Greg Brenneman and Dave Deno, Schaden says the position won't be empty again anytime soon.
“I'm here as long as I need to be here,” Schaden says. “There is no time limit on it.”