A year after some franchise owners sued Denver-based Quiznos over business practices, the chain’s chief executive said Monday he expects franchisee profits to increase 60 percent overall in the wake of improvements to the system.
Greg Brenneman also estimated a 32 percent increase in Quiznos’ EBITDA, or earnings before interest, taxes, depreciation and amortization, by the end of 2007, crediting a drop in food and paper costs, a restructured menu and fewer discounts, among other changes.
Brenneman made the comments during a companywide meeting at a downtown hotel attended by 640 corporate employees, area directors and selected franchise owners.
The privately held company does not publicly release financials and invited The Associated Press to attend Monday’s meeting for a rare glimpse into its business operations.
A turnaround expert for Continental Airlines and Burger King, Brenneman took over as CEO this year as dissatisfied franchisees were complaining about low profits, high food costs, company operating requirements and the franchisee recruiting process.
Some franchisees sued the company in Illinois, Colorado and Wisconsin, alleging improper business practices.
Last month, a federal judge dismissed federal claims in the Wisconsin lawsuit and said remaining state claims could be filed in state court if the franchisees desired. A similar lawsuit was settled in August, and two others are pending.
Looking ahead to 2008, Brenneman told the crowd that the company will introduce or expand such services as delivery, catering and Internet ordering and add kiosks or smaller stands called “coolers” at universities and hospitals.
