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In the midst of a $400 million debt reduction plan, Quiznos filed for bankruptcy last week. As a 2013 IBISWorld report reveals, consumer preferences in the sandwich space are strongly influenced by prices.
How much would these changes cost?After it emerges from bankruptcy, Quiznos will likely be looking for a change. The bottom lineBecause Quiznos is private, it's difficult to get a crystal clear picture of its finances.
While only a handful of its 2,000-plus locations are affected, the news illustrates just how far the toasted sandwich chain has fallen. It's estimated that over 50% of this market is comprised of lower-income households (below $50,000 in annual income), and just 12% of all customers come from households that make above $100,000 a year. Stimulate customer creativity.No official stat exists, but I can say with relative certainty that a portion of sandwich-eating consumers prefer customization. Although it's possible to create your own sandwich at its franchises -- I do on a regular basis -- first-timers are not made aware of this fact.


Tweak the toasting experience.The full-length conveyor oven is arguably the most iconic part of any Quiznos restaurant, but it may be time to tweak the toasting experience. As my colleague Daniel Kline recently wrote, "It has to be something different, even if the products look similar." And that's the beauty of the aforementioned three-step plan -- it's not overly expensive.
Including design time, the expense would likely be in the low seven figures, possibly less.
But considering its 2,100 locations generate average sales of about $350,000 per year, according to Pacific Management Consulting, the company likely oversees at least $700 million in annual revenue. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
The number of active franchises has been cut in half over the past seven years, 25% of all Quiznos restaurants now fail, and perhaps worst of all, the company is losing the market share battle to Subway and Jimmy John's by a significant margin. Quiznos' biggest problem is customer experience, and more specifically, the ordering process.
Most sandwich-buyers are focused on value, and by failing to organize its menu like its competitors, Quiznos is ignoring the majority of its customer base.


As some customer complaints show, the chain, whether it's because of a lack of signage or employee training, doesn't stimulate customer creativity properly. By giving customers the option to toast, rather than making it an assumption, it could make the menu even more customizable.
Of course, a companion marketing campaign -- to highlight a "new focus on customization" -- is an option, but not a must. Given that, it's reasonable it could consider spending a few million dollars to fix its customer experience.
This Submay sandwich menu is an example only, and prices and the availability of subs may have changed. The majority of franchises' menus -- including the locations I've visited -- are organized by meat, rather than by price.



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