Quiznos Franchise in 2024: Costs, Fee & FDD

Discover where the Quiznos franchise opportunity is at this time. Explore startup costs, profitability potential, and key differentiators that Quiznos is offering within the fast-casual dining industry. Learn more about this iconic toasted sub brand.

Last updated 17 Oct 2024 Time 11 min read
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Quiznos is a well-established player in the fast-casual restaurant industry, known for its toasted subs and innovative approach to sandwiches. Founded in 1981 by Jimmy Lambatos in Denver, Colorado, Quiznos quickly grew in popularity due to its unique cooking method and emphasis on using fresh, high-quality ingredients. Lambatos, a chef himself, envisioned a sandwich chain that brought gourmet-style subs to the masses, with a focus on bold flavors and premium meats. Quiznos’ impact in the fast-casual market is significant, as it was among the first to introduce toasted sandwiches, which set it apart from other sub shops at the time.

The core products at Quiznos revolve around their toasted subs, including classics like the Italian, Spicy Monterey, and Turkey Bacon Guacamole. They offer a wide range of sandwiches, salads, and soups, catering to customers who value convenience without sacrificing quality. While their core market consists of busy professionals, students, and families seeking a quick, satisfying meal, they’ve also expanded their menu to include lighter options like flatbreads and wraps to appeal to health-conscious consumers. Quiznos’ focus on bold flavors and toasted bread continues to be a major draw for sandwich enthusiasts.

At its height, Quiznos operated over 4,500 locations globally. Today, they have around 300 locations in the U.S. and are actively seeking international expansion opportunities, with stores in more than 30 countries. This global presence allows them to serve a diverse customer base, offering regional menu variations while staying true to their core offerings. On an average day, each Quiznos location serves hundreds of customers, making it a favorite spot for lunch breaks and quick meals.

Quiznos provides comprehensive support for franchisees, including extensive training programs that cover everything from day-to-day operations to marketing strategies. New franchisees undergo an intensive onboarding process that includes hands-on training at an existing store, along with guidance on site selection, store design, and staffing. They also offer ongoing support through regional managers and corporate teams, ensuring that franchise owners have the resources they need to succeed. This level of support makes Quiznos an attractive option for both experienced and first-time franchise owners.

Quiznos Franchise Insights

  1. The average initial investment for a Quiznos franchise ranges from $221,000 to $611,000, depending on the location, making it more affordable compared to many other fast-casual restaurant franchises.
  2. Quiznos offers a more compact store design with an average size of 1,200 square feet, allowing for greater flexibility in choosing locations with lower real estate costs.
  3. The brand’s operational model requires fewer employees per store, making labor costs more manageable compared to larger fast-food chains, which can result in better profit margins for franchisees.

Quiznos Franchise Key indicators

Growth YOY (%)

-5%

vs industry 0%


Total U.S. Franchised Units

156


3-Year Failure Rate

59%

vs industry 10%


Sales-to-Investment ratio

1:1

How much does it cost to open a Quiznos franchise?

Understanding the potential investment size and capital requirements is crucial when considering opening a Quiznos franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.

Min & Max Investment

Opening a Quiznos franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a Quiznos below from the most recent Item 7 below:

Type of Expenditure   Minimum Investment   Maximum Investment  
Initial Franchise Fee  $5,000  $5,000 
Initial Franchise Support Fee  $25,000  $25,000 
Leasehold Improvements  $50,000  $250,000 
Architectural  $15,000  $60,000 
Restaurant Equipment  $77,500  $175,000 
Uniforms  $500  $500 
Computer Systems, Online Ordering, Telephones, Point-of-Sale and Delivery Equipment  $3,000  $27,500 
Security Deposits, Utility Deposits, Permits and Business Licenses  $3,600  $8,000 
Training Expenses  $3,000  $5,000 
Opening Inventory and Supplies  $3,000  $15,000 
Additional Funds (3 months)  $35,000  $40,000 
Total Estimated Initial Investment  $220,600  $611,000 

Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.

Required Capital

For Quiznos or similar franchises in the fast-casual restaurant industry, the required capital, liquid assets, and net worth can vary based on location and specific franchise terms. Based on industry standards for comparable franchises, here are some general estimates:

  • Initial Investment The total investment for a Quiznos franchise typically ranges from approximately $211,000 to $611,000. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
  • Liquid Assets Franchisees usually need liquid assets in the range of $100,000 to $150,000, though this can vary with specific franchisors or regions.
  • Net Worth A net worth requirement of $350,000 to $500,000 is common across fast-casual franchises, ensuring financial stability throughout the startup phase.

These figures are estimates, and it’s important to confirm specific details with the franchisor during your due diligence process.

How much does a Quiznos franchise owner make?

Calculating the salary of a Quiznos franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a Quiznos franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.

Quiznos Revenue & Gross Sales

Based on the most recent analysis, Quiznos franchises have a median gross sales of $417,000, showcasing the brand’s steady performance in the fast-casual dining sector. This figure highlights the potential for consistent revenue generation, driven by the brand’s established presence and loyal customer base.

Which key factors impact the average revenue performance of Quiznos franchisees?

The performance of U.S. Quiznos franchisee median gross sales is likely influenced by several key factors. First, the ongoing shift towards online ordering and third-party delivery services has expanded Quiznos’ reach, increasing sales opportunities beyond traditional in-store dining. Additionally, the brand’s ability to adapt its menu with innovative offerings, such as seasonal subs and healthier options, likely attracted a broader customer base. However, industry-wide challenges like rising food and labor costs could have impacted profit margins, even as sales remained stable. Furthermore, market saturation in certain regions and competition from other fast-casual brands may have affected growth. These combined factors contributed to maintaining steady sales compared to the prior year.

Quiznos Franchise Operational Costs

Operational costs for a Quiznos franchise are the ongoing expenses required to run the day-to-day operations of the business. These costs are essential for maintaining the business’s functionality and ensuring smooth operations. For a Quiznos franchise, key operational costs include:

  • Food and Beverage Costs Expenses incurred from purchasing fresh ingredients like meats, vegetables, bread, and beverages necessary to prepare menu items. Maintaining inventory levels to meet customer demand is crucial.
  • Labor Costs Wages, salaries, and benefits for employees, including hourly workers, managers, and kitchen staff. Labor management is a significant ongoing expense, especially in busy locations.
  • Rent or Lease Payments The cost of leasing the property where the restaurant operates, including rent, property taxes, and insurance. This is a substantial fixed cost that varies by location.
  • Utilities Expenses for electricity, water, gas, and internet, all of which are required for running kitchen appliances, lighting, and maintaining an optimal customer experience.
  • Maintenance and Repairs Routine maintenance and unexpected repairs for kitchen equipment, ovens, refrigerators, and the overall upkeep of the restaurant to ensure smooth operations.
  • Supplies and Inventory Costs for purchasing non-food items like packaging, cleaning supplies, uniforms, and office supplies that are essential for running the restaurant.
  • Insurance Payments for various insurance policies such as property insurance, liability coverage, and worker’s compensation insurance to protect the business from risks.

Careful planning for these operational costs is critical for the financial success of your Quiznos franchise.

Quiznos Franchise Fees

When opening a Quiznos franchise, it’s important to understand the ongoing fees associated with operating the business. These fees are integral to maintaining the franchise relationship and ensuring the brand’s support and marketing efforts continue to drive success.

  • Royalty Fee A 5% royalty fee is charged weekly based on gross sales from the prior week. This fee is automatically debited from your bank account and is subject to adjustments based on Quiznos’ designated weekly period.
  • Marketing Fee Currently set at 2% of gross sales, this fee supports brand-wide marketing initiatives. It is also debited weekly, and Quiznos reserves the right to increase it up to a maximum of 5%, with no more than a 0.5% increase per year.
  • Additional Fees There may be other ongoing costs, such as local marketing fees, technology fees, or training costs, depending on your specific franchise agreement and location.

Understanding these fees is essential for financial planning as you manage the daily operations of your Quiznos franchise.

Quiznos Franchise Earnings

For a Quiznos franchise, median gross sales are reported at $417,000, which provides a solid benchmark for potential earnings. Owner-operators expect a yearly income of around $62,000 based on these figures and industry margins. This reflects the income you would earn after accounting for standard operational costs like food supplies, labor, and other regular expenses. While this income is a solid figure for a small business, it’s important to note that individual earnings will vary based on factors like location, operational efficiency, and customer demand.

Additionally, maximizing profitability can come from strategic cost management, boosting customer loyalty through marketing efforts, and leveraging Quiznos’ established brand name. An owner-operator model often allows for more direct control over daily operations, which could improve both revenue and profit margins when efficiently managed.

How to Open a Quiznos Franchise

Becoming a Quiznos franchisee involves a structured process that ensures you’re well-prepared to run the business. Here’s a step-by-step overview:

  1. Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
  2. Franchise Application After expressing interest, you will complete a formal franchise application, providing details about your financial situation, background, and experience. This is used to determine eligibility.
  3. Interview and Discovery Day You’ll participate in an interview with the Quiznos team and possibly attend a Discovery Day. This allows you to visit the corporate headquarters or an operational store, meet key personnel, and learn more about the business model.
  4. Signing the Franchise Agreement After due diligence, if you decide to move forward, you will sign the franchise agreement. This legally binds you as a Quiznos franchisee and outlines your responsibilities.
  5. Training and Site Selection Quiznos provides an intensive training program that covers operations, marketing, and day-to-day management. Simultaneously, you will work with the franchise team to secure an approved location for your store.
  6. Build-Out and Permits Once a location is finalized, you’ll begin the build-out process to meet Quiznos specifications. During this time, you will also secure the necessary permits and licenses to operate your business.
  7. Grand Opening and Start of Operations After completing training, store construction, and final approvals, you will host your grand opening and officially begin operations as a Quiznos franchisee.

Pros & Cons

Pros

Affordable Entry Costs: Compared to other fast-casual franchises, Quiznos has relatively lower startup costs, making it more accessible for first-time franchisees.

Niche Market Appeal: Quiznos is known for its signature toasted subs, which sets it apart from many competitors, allowing franchisees to tap into a unique market niche.

Smaller Workforce: Compared to full-service restaurants, Quiznos operates with fewer staff members, which can lead to lower labor costs and easier management.

Flexible Store Formats: Quiznos offers smaller, more flexible store designs, allowing franchisees to operate in different types of locations with lower real estate costs.

Cons

Market Saturation: Quiznos once had a much larger footprint, and competition from other sandwich chains, like Subway, has impacted its overall market share.

Limited Growth: The number of Quiznos locations has declined significantly, which may reflect challenges in maintaining profitability across all locations.

Higher Food Costs: Quiznos’ focus on premium ingredients can lead to higher food costs, which may eat into profit margins, especially with fluctuating supply prices.

Brand Rebuilding: With a shrinking number of locations and competition growing, new franchisees may face challenges in rebuilding the brand’s presence in certain markets.

Operational Complexity: Running a fast-casual restaurant involves juggling food preparation, staffing, and customer service, which can be complex and time-consuming, especially for first-time franchisees.

FAQs

Who owns Quiznos?

  • Quiznos is currently owned by High Bluff Capital Partners, a private investment firm that acquired the company in 2018. The firm specializes in turning around distressed brands, and it has been working to revitalize Quiznos through operational improvements, marketing initiatives, and menu innovations.
  • Yes, Quiznos operates primarily as a franchise. The company offers opportunities for entrepreneurs to own and operate their own Quiznos locations, with the support of a comprehensive franchise system that includes training, marketing, and operational assistance.
  • Quiznos’ biggest competitor is Subway, which dominates the sandwich market globally. Other alternatives to Quiznos include Jimmy John's, Firehouse Subs, and Jersey Mike’s, all of which offer similar fast-casual sandwich concepts.
  • Quiznos is known for its signature toasted subs, offering a unique flavor profile that distinguishes it from competitors like Subway. Additionally, Quiznos focuses on premium ingredients, bold flavors, and continual menu innovation, such as seasonal and limited-time offerings, which help keep the brand fresh and appealing to customers.
  • Quiznos can be profitable for franchisees, but profitability depends on several factors, such as location, operational efficiency, and market competition. With median gross sales of $417,000 and careful management of operational costs, many franchisees can see a positive return on investment. However, factors like rising food and labor costs may impact overall profitability.
  • As of the most recent data, Quiznos has 157 locations in the U.S., of which 156 are franchised locations.
  • The most recent calculated 3-year failure rate of Quiznos was 59% in the U.S.
  • Quiznos saw a dramatic decline over the years due to a combination of financial mismanagement, franchisee struggles, and increased competition. At its peak in the early 2000s, Quiznos aggressively expanded, opening thousands of locations. However, the franchise model they employed put a significant financial strain on franchisees, as they were required to purchase food and supplies at inflated prices from company-approved vendors, which cut into their profit margins. This, combined with high franchise fees and royalties, made it difficult for many store owners to stay afloat. Meanwhile, competitors like Subway gained a competitive edge with lower prices and successful marketing campaigns, such as the $5 footlong, pulling customers away from Quiznos. Additionally, the company struggled under the weight of massive debt, which limited its ability to invest in marketing or support its franchisees. Lawsuits from unhappy franchisees, accusations of unfair business practices, and a lack of consistent brand identity further damaged Quiznos' reputation.
  • Over time, these factors led to the closure of thousands of locations, leaving the brand with only a small fraction of the stores it once had. Quiznos still operates today and is working towards rebuilding as a franchise.
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