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Vocal Quiznos Franchisees Claim New Concerns
Board members of the Toasted Subs Franchisee Association maintain Quiznos is considering an IPO.

In a letter responding to QSR magazine’s May 2007 stories, “A Tale of Two Quiznos” and a “Q&A with Greg Brenneman,” board members of the independent Toasted Subs Franchisee Association (TFSA) alleged Quiznos will soon file for an initial public offering and voiced cautious optimism about the future of Quiznos under new CEO Greg Brenneman’s leadership.

Why would Quiznos try an IPO right now with all the negative press?”

“The TSFA would like to make this clear: We have nothing against Mr. Brenneman, and we are not out to destroy the Quiznos brand,” begins the four-page letter, which was recently posted on and sent to Franchise Times, the Associated Press, and QSR magazine. The letter vacillates between praising Brenneman for putting together a strong management team and improving communication with franchisees to complaining that Brenneman is not moving fast enough. The letter also claims, “Many franchisees fear that the short-term changes just represent ‘putting lipstick on a pig’ for the benefit of an eventual IPO.”

Rich Emmett, Quiznos chief legal officer, says those “fears” are unfounded. “If we were doing an IPO, I think I’d know about it,” says Emmett, who put together Papa John’s IPO in 1993. “There is no basis for that.”

Though the letter distributed by TSFA mentions a pending IPO twice, the group’s president, Chris Bray, admits his organization has no proof to back up its claims. However, he maintains it’s “common knowledge an IPO is a goal.”

According to Greg Schaefer, a Louisville, Kentucky, Quiznos operator and non-TSFA member, there are rumors within the franchisee community that Quiznos is considering an IPO. But Baird analyst David Tarantino, who covers Panera Bread and Chipotle Mexican Grill, says he’s not heard of these rumors and that Wall Street is not talking about a Quiznos IPO.

Other Quiznos operators say making a leap into the stock market hardly makes sense at this time. “Why would Quiznos try an IPO right now with all the negative press?” asks Steve Bond, a single-store owner in the Denver Metro market.


Cheryl O’Brien, a four-store operator in Cleveland, has not heard IPO rumors either and says she has grown tired of all the back and forth between TSFA and Quiznos corporate. O’Brien is ready to move on and away from all the negative publicity—as are most Quiznos operators, she says.

In O’Brien’s view, Quiznos has made great strides, and the new leadership team is turning things around. It’s the TSFA she now looks at with suspicion.

“Within the past two years, [TSFA] has become filled with hatred,” O’Brien says. “They’re hurting other franchisees everywhere.”

Bond also questions the TSFA and motives. “They use militant tactics,” Bond says. “Why not do something constructive, especially when we’re seeing the changes? The food cost cuts are coming true. [Brenneman] communicates with us regularly through email, voice mail, and phone.”

Bond takes issue with the fact that TSFA largely uses the press and litigation as a means of communication. TFSA members and Quiznos are involved in the 45 pending lawsuits, including class-action suits in California, Michigan, New Jersey, Michigan, and Wisconsin. The suits all claim that Quiznos violated franchise, antitrust, and racketeering laws and contend that the company forced franchisees to buy food and supplies from Quiznos or its affiliates at inflated prices while setting low retail prices for products, making the stores unprofitable.

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