DENVER – Quiznos on March 14 voluntarily filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Wilmington, Del. The quick-service restaurant chain expects to continue operating in the ordinary course of business during a restructuring process.
Senior lenders of Quiznos voted in favor of a “pre-packaged” restructuring plan designed to reduce the company’s debt by more than $400 million. Quiznos has received a commitment for $15 million in debtor-in-possession financing from its senior lenders. Subject to court approval, the financing will be available to support ongoing operations during the Chapter 11 proceedings.
“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,” said Stuart K. Mathis, chief executive officer of Quiznos. “We look forward to continuing to work with and support our global network of franchise owners, who are the backbone of our business.”
He said key elements in a business 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.
Denver-based Quiznos, founded in 1981, has nearly 2,100 restaurants in 50 states and 30 countries. All but seven of the restaurants are independently owned and operated by franchisees. As separate businesses, these restaurants are not a part of the Chapter 11 proceedings and are open and operating as usual.