Quiznos filed bankruptcy on Friday (March 14) seeking to reorganize under Chapter 11 of the US Bankruptcy Code. The quick-service restaurant chain expects to continue operating in the ordinary course of business during a restructuring process.
The Denver-based sandwich chain has more than 2,000 restaurants, all but seven are independently owned and operated by franchisees, which are not part of the bankruptcy proceedings.
Senior lenders of Quiznos approved a “pre-packaged” restructuring plan designed to reduce the company’s debt by more than $400 million. The company also received a commitment for $15 million in debtor-in-possession financing from its senior lenders, subject to court approval.
“The actions we are taking are intended to enable Quiznos to reduce our debt, execute a comprehensive plan to further enhance the customer experience, elevate the profile of the brand and help increase sales and profits for our franchise owners,” CEO Stuart K. Mathis, noted in the release. “We look forward to continuing to work with and support our global network of franchise owners, who are the backbone of our business.”
Mathis said key elements in proposed plan include reducing food costs, implementing a franchise owner rebate program, making loans available to franchisees for restaurant improvements in certain circumstances, investing in advertising to improve local awareness, and providing new incentives for prospective franchisees.