POSTED: 1:30 a.m. HST, Mar 15, 2014
Quiznos, the Denver-based sandwich chain, said Friday it had filed for Chapter 11 bankruptcy in Delaware, the second quick-service restaurant chain in a week to do so.
The filing is expected to be speedy, as Quiznos senior leadership had already secured a "prepackaged" restructuring plan with its creditors, the company said in a statement. The move will cut the company's debt by more than $400 million.
Quiznos' bankruptcy filing comes just days after Sbarro, the New York-based pizza chain, filed for court protection in Manhattan on Monday for the second time in three years. Hot Dog on a Stick, another purveyor of quick-service food, in February also filed for bankruptcy protection.
Competition in this food segment has been fierce, with the rise of other competitors that include Chipotle Mexican Grill Inc. and other quick-service options.
Quiznos executives said the bankruptcy filing, if approved, would increase the company's flexibility as it aims to improve operations and boost its performance.
"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, Quiznos' chief executive.
The company, which has outlets in Hawaii, said it had received a commitment for $15 million in financing from its senior lenders to support operations during the bankruptcy.
All but seven of Quiznos' 2,100 locations in the U.S. and 30 other countries are independently owned and operated as franchises. The restaurants will continue operating as usual.
Ricardo Lopez, Los Angeles Times