Quiznos Follows Sbarro Into Bankruptcy Court
Quiznos, which was started in 1981, and has restaurants in all 50
states and 34 countries has declared chapter 11 bankruptcy. The toasted-sandwich franchise has been consistently losing business to its fast casual competitors such as Panera Bread, Chipotle, and Subway. The prospects for success in this industry is tough due to constantly changing consumer tastes and preferences. If a firm is not able to keep up with the changing demand, they are likely to be replaced by a firm that will. Quiznos underwent a financial restructuring program in which it was able to eliminate about $300 million of its $500 million in debt in a $150 million equity infusion and
debt-to-equity swap with Avenue Capital Group LLC--giving that firm majority ownership. Quiznos, Sbarro and others have dropped out of the market recently. Which companies will be next? And what new ideas will be launched to fill the void?
1 comment:
The article suggests that it is "the survival of the fittest " and the market is not growing, so the weak are getting weeded out. Wouldn't Quiznos want to make changes that would make them not weak? The article states that they added pasta dishes to do so, but that obviously failed. Subway is more successful because they promoted their "freshness". Did Quiznos marking plan just fail? Or did they not try to become the strong members of the market?
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