Wednesday, January 31, 2007

Quiznos - Thoughts from an owner

I get email from time to time about the Quiznos business from potential owners. They do a bunch of research on the web, and I'm sure the find all the truely negative sites, I'll leave that as an exercise to the reader instead of posting links to them.

I just responded to one, and I pretty much give the same advice in every email I respond to, so I'm posting the response here to help out others.
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Hello Potential Quiznos Owner,

Sure, I have no problems talking to you. Our store opened in May of 2005. I wish I would have done a little more research like you are doing now.

The number one thing I would advise, is to take everything the Quiznos people tell you with a grain of salt. At the initial meetings they make everything sound like it is super simple. Talk to as many owners in your area as you can. See if any of them will give you the weekly sales reports. Every store gets a fax everyday with the sales numbers for the top 25 stores. That will give you a good indication of what stores in your area are making.

There are ~35 stores in the Austin TX area, and we are about #10 every week. So just be sure to find out how the stores you are talking to are doing in sales relative to everyone else. That might let you know if their opinion is skewed because of their sales.

LOCATION, LOCATION, LOCATION. It can not be said enough. Don't trust what the Quiznos Real Estate person is telling you. Check the location for yourself and talk to other QSR's and businesses in the same area to find out the traffic patterns, and growth patterns. The Quiznos people are worse than time share people. Once you sign that paper and fork over the money, you will not see that guy EVER again. His part is done, he gets his comission, and he's on the the next one. Don't buy that crap about, "we only succeed if you do". The real Estate guy succeeds when he cashes your check. He will tell you anything to sign the paper. Do your due dilligence in scouting out the location.

Another owner started at the same time I did, he never checked out the location and just went by the demographics and sales from other businesses in the area. Well it turned out he was in a corner of a strip center on a one way street, and had ZERO visibility for all the traffic passing by. Needless to say, he was out of business in one year.

We do work in the store ourselves and would recommend it. NOBODY is ever going to care about your store more than you. We both have "regular" jobs as computer professionals, and work the store on the weekend. If we didn't have these jobs, we would have went under the first year.

Whatever they say you need for startup costs, add $25,000 to it, then maybe even $25,000 more. You will burn through cash the first year until you "figure" out how to run the store efficiently. This is not a get rich quick deal, or easy money. It is hard work, but it is rewarding from other aspects other than money. You get a great feeling from the employees when you teach them life lessons. It's fun to hire a bunch of 16 year olds and then watch them grow up, you will go through a ton of teenagers. One of the most challenging parts is finding good employees, and figuring out what motivates them, and trying to keep the good ones, weed out the bad ones, and start the cycle all over again every few months. You will also get to know and love all your "regular" customers !

There is no better feeling that owning your own business. But keep in mind that you have Quiznos Corporate has a partner. Not a bad thing, just part of the franchise deal. They help you out, you help them out with royalties.

The store will consume all your free time in the first year, then it gets better. If you had talked to me during that first year, I would have said, "RUN RUN RUN!" ... it's better now that we are making a small profit and we don't have to be in the store everyday.

- Scott

14 comments:

Joshua said...

What is your email Dell Boy? Joshuah@ibm

lisa said...

I am researching and was glad to find your letter!! If you had to do it all over again would you??

lisa said...

wow..I am researching and was glad to find your letter...I have to really consider everything...if you had it to do all over again would you do it??

PrettyPokerBoy said...

Would do it again to gain the experience. You can't get this type of real world experience by reading books or things on the web. You can however, gain some insight as to what to do and what not to do. I wish I would have researched more internet sites. We just kind of went into it blindly. Trusting the Quiznos sales guy. Don't EVER trust that guy, he's just a sales guy, usually they have never run a store or any type of business. Sure it all looks good on paper, but DEFINITLEY talk to local quiznos owners in your area to get a feel for your local market.

And don't feel pressured to purchase everything from quiznos. You can find some really good deals on refurbished ovens, and Quiznos POS systems from other owners that couldn't make it. Freezers and walk-ins as well. And get a change machine for the register, makes the line move much faster.

DON'T use any money to finance the project that you can't afford to lose. IE, don't take another mortgage out on the house, DON'T take a loan from your 401K. JUST DON'T do it. If you don't have the money to invest in the venture, just say no. You will not see ANY cash flow out of the store for at least 2.5 to 3 years. AND you will absolutely pump more money into the store than you thought for the first year, and even bleeding into the second year. TRUST me on this.

When negotiating the lease, put in some clauses to protect YOU. They could care less about YOU. All the wording in the lease is to protect them. If you have a date for move in, and the space is not ready, make sure you have a clause for free or no rent. Negotiate a better deal as well. This is a NATIONAL Franchise, not some mom and pop shop. You deserve better rates because you will be here for the long haul, not just close up shop one day and be gone. Landlord would rather have a steady consistent stream of income, than higher rent from somebody that justs leaves town.

What part of the country are you in ? Do you have other jobs ? Who is going to run it during the day ? You need somebody in the store you can trust. Any experience in the restaurant field ?

The best part are the tax breaks, the first 2 years it will just hemmorage money, and that flows through as a write off on the personal taxes.

The worst part is EVERYBODY wants some little piece, the Muzak, the towel people, the local taxes, the state taxes, the payroll people, the accountants, the maintenace people, the floormat people ... and the list goes on, and you are forced to do business with some of these vendors as part of the franchise contract system. Even though you could get better rates elsewhere.

The other great part is that after you have done this for 3 years, you will KNOW what it takes to run a business. Restaurants are the hardest, anything else you choose to do will look like a piece of cake, AND you won't have to pay the royalites to anyone. But you will have to market it much harder. That's part of the trade offs of getting into a franchise. Yes, you own the business, but in many ways you are still working for someone, the franchisor.

Ohh and don't take it lightly that you need to be working ON your business, not IN your business. That means hitting the streets everyday and marketing to the local business in the area. It is not enough to do it once a week, or every month. Do it everyday, and they will be on the top of mind when picking where to go for lunch.

And hire FRIENDLY people. Dont' worry about previous experience. You can train a MONKEY to make a sandwhich, but you can NOT train a personality. A person either has a certain personality or not. You will never train someone to smile, they either do or don't. So if someone comes in with previous Q experience, and they have a bad attitude, don't hire them. Or let them work the line for 10 mins and see how they interact with the customer. This will make or break you. Customers have MANY places to choose for lunch. Your friendly crew will make them choose YOUR place.

Now please paypal me $20 for the advice :-)

lisa said...

Thank you so much for being so forth coming!! I had googled the other night, and went about 26 pages when I found your blog,and found it to be very helpful. I have only gotten so far as to talk with the area director and of course being credit preapproved. He said the new UFOC is being printed and will meet with me when they come out. I have also been on my own finding the place I want to set up business. It is shopping center not yet built, and I was trying to determine what business I wanted to own. Quiznos sounded pretty good. I have researched on the internet, but really have only looked for the negative...and boy is there a lot. But yet they are everywhere! I am waiting to meet with the sales guy to before I go to talk to every owner in the area. I live in VA, and have worked the restaurant business. My husband is actually a purchasing manager for a theme park, and so very knowledgable on pricing and food costs( which I read is a huge problem). We also for the last 10 years have run our own vending business. My husband would love to quit...and run the vending business fulltime( we are much more then just your typical bubble gum machine) But we would need another income. Do you pay yourself at all?? I really do believe I have found a good location ...and I really do believe customer service is as important as you say. My brother has expressed interest in working for me, which he has before ...i see no problems. Money we have some, but would probably need to take a loan. Buying secondhand...awesome idea...wasn't sure you could do that. I live in a community that I really could market to...word of mouth means alot around here..plus i would want to pull of a major interstate and highway to Maryland. The car count is promising for the area!! I want to open a business...but will I make the biggest mistake of my life??? Maybe I should go visit a fortune teller too!! My very best friend lives in texas and i will tell her to eat at your quiznos!! Thank you so much for listening and helping...be on the lookout for 20 bucks...hehhee! If you want to email me directly it is lisadutton@cs.com

PrettyPokerBoy said...

Glad to be of help. I believe that was truely the intention of the original internet, to help people out one on one. Not all this Advertising crap ! ... sometimes you can't even see the real content with all the ads around the page.

Yeah I guess I forgot to mention the fact that we have NOT paid ourselves one dime out of the store as of yet. Hoping to take some money out during the summer. Summer is the months of biggest sales. This will be our third summer, and all trending is pointing towards taking some money. But the best part right now is that we just stopped working on the weekends. We finally have that free time back !

So again, just do the due dillegence, and don't expect a get rich quick proposition, it won't happen. This is all about getting rich slow, well not really rich, but building another stream of income.

Good Luck !

store said...

I am a Quiznos franchisee in Southern California and I must say, Scott's advise is true to every word. This month is my first aniversary as a Q franchisee, and I am thinking of selling my store. My partner and I each work about 20-30 hours/week in our store, and each one of us take home less than $1000/month, some month we just break even. We rank about 25 out of 50 stores in my region in sales $. I am not sure how the other bottom 24 stores can survive. If you are thinking of owning a Q store, buy an existing one instead of building a new one, it is usually cheaper. Most Q store are sold below their building cost, which I believe is between $230,000 to $300,000. Search bizbuysell.com with the keyword "Quiznos" and you will find hundreds of them for sell, narrow the search to your state. Good luck.

Henry

Tris said...

I worked at a Quiznos and the owner only had me and 3 other people running the busy place.

He didnt have any managers or supervisors and a limited hourly staff. He pretty much lived there. 10am-9pm. 7 days a week.

That saved him alot of money. some times his family would come in and work that way he didnt have to pay any wages.

PrettyPokerBoy said...

@Tris - I'm sure he did save a lot of money. I'd be curious to know how much money that helped him PROFIT. I for one, would not look forward to working 12 hour days 7 days a week.

Isn't the reason we started a small business is to be able to work for ourselves ? How is that working for ourselves, sounds like working for the man to me.

Just an update, we are still very much in business, coming up on our three year anniversary of the store. Still have not paid anything to ourselves. However, we do get a massive tax write off every year. That part is worth it. We only spend about 2 hours a week in the store. Usually me on Sunday doing paperwork and payroll.

Still fun, lots of community involvement, and we get to mold the minds of teenagers :-) .. that part is really fun. Of course, they will never listen to our advice and take the life lessons we have learned. Guess that's why they call them "Life Lessons" .. you kinda have to live them to learn them.

Ohh well, if I only had a time machine and could talk to myself as a teenager !

koppl said...

Chris
I was thinking about purchasing a quiznos because the start up price was so cheap. The owner is selling the store becuase he has 4 total stores and only wants to work 20-30 hours a week. He said that it is getting to much for him to handle. He is selling his store for 40,000 dollars which includes everything including the franchise transfer fees. I went to the store today between 12:15pm-1:00am and 35 people ordered food. I asked the girl working and she said that the manager totally neglects the store and has not been there in a month. She said they used to be slammed about 6 months ago but it has really gone downhill in the last six months.
So my question is that I feel that I can get the store for around 35,000 for everything and really turn the store around. I am going to be a fulltime manager and work everyday for 6-8 hours. I want to make at least 35,000 a year is this possible?

PrettyPokerBoy said...

koppl, More info is needed. Is the store in a good location ? You have to take the "All this store needs is a great owner to turn it around" .. with a grain of salt, because you have to remember that they are trying to SELL you the business.

$40K is VERY cheap for a store, what part of the country ? How do the P&L statements look ? How much are the fixed costs per month ?

In our area you need to be making at least $400K in revenue per year to pay yourself $35K-$40K per year. And that is with you being the manager and working in the store 7 days a week at least 10 hours per day.

So it should be possible, but you need to research the fixed costs, and how much were they making before it "turned bad" ? it will take at least 6-8 months of running a GREAT store to overcome the reputation of being a crappy place to come for lunch.

Unfortunately you don't get second chances to make that first impression on the customer, they simply will never return, and they'll tell their friends not to eat there, and you don't get a say in the matter.

So plan on $80K investment in the store .. $40K to buy it, and $40K to fix things up, and ride out the storm of 6-8 months more of crappy business.

Look at those P&L statements, and remember that he is probably selling off his worst store, you have an uphill battle.

Good Luck !

Gordo_1 said...

I owned 2 Quiznos stores in Ohio and worked in my stores nearly 7 days a week for almost 2 and a half years. Although I did not draw any salary from the business, I lost over $600,000. Much of it was in operating losses from being forced to sell products at artificially low prices mandated by Quiznos corporate and pay artifcailly high prices for all my goods and services through vendors mandated by Quiznos. You see, Quiznos gets a kickback from every one of those vendors, even Muzak. You could negotiate a better deal on most of the food, paper, sanitation and cleaning products, exterminator services, laundry services, etc than what you pay to Quiznos' vendors. But the franchise agreement prevents you from doing that unless you want to risk getting caught and fined, sued, and/or closed by Quiznos.

Yes, the sales and real estate people were smooth operators. And yes, they disappeared the moment I turned over my check for 2 franchise agreements.

Quiznos does have a "proven system" alright. A system of selling franchises by fraud and deception, raking its franchisees over the coals with inflated prices for goods and services, using the Operations Manual to mandate requirements not found in the franchise contract, and releaving its franchisees of the burden of managing their life's savings (and later spending it).

So if you ask me, I would recommend you RUN, RUN, RUN and not look back. You do not want to find out why so many franchisees call Dick Schaden "Tricky Dicky".

Anonymous said...

DO NOT BUY A QUIZNOS. comming from a quiznos owner that recently had her franchise agreements on 4 locations terminated (per my request) look up quiznos lawsuits and how much quiznos is still paying out daily!! and these lawsuits are only the people who still have enough money to defend themselves!! do not buy a quiznos!!!

ajay said...

So I put an offer down on an existing store and will begin the training for Quiznos Sub but am worried about the Testing...is it hard? What does it consist of?