Quiznos CEO, Greg Brenneman, will become executive chairman of the board effective September 30, 2008. Company president, Dave Deno, will assume the role of CEO and president while founder and current chairman, Rick Schaden, will continue to be very involved in the company.
“As president and CEO, Dave will handle all the day-to-day operations of the company and have all the direct reports,” Brenneman says. “As executive chairman, I will work with Dave and the Quiznos board to set longer-term strategic direction and to make sure we’re progressing on our efforts to improve franchise owner profitability.”
Quiznos maintains that its overall direction will not change despite the transition. Of the six areas the company will focus on, improving franchisee profitability remains No. 1, just as Brenneman told QSR in 2007, weeks after being named CEO. The remaining focuses are: continuing menu innovations, offering value to customers, encouraging multiunit ownership, emphasizing delivery operations, and expanding internationally.
“We would like to have a race between how many restaurants we can open in the U.S. and how many restaurants we can open overseas over the next two years,” says Deno, who was named company president just eight months ago. The company plans to open about 500 new stores overseas in addition to its existing 700 units. According to a statement issued by the company, there are already plans for 100 restaurants in India and 175 restaurants in Brazil, both over the next ten years. There are also discussions underway for the brand’s expansion into Singapore, Chile, and Ecuador.
As for domestic growth, Deno says Quinos “would be foolish not to take advantage of our unit-distribution opportunities, but growing our volumes and profits in our existing restaurants is of paramount importance.” Both Deno and Brenneman agree that in terms of unit growth, the international expansion will outpace that in the U.S. The company hopes to have domestic unit growth occur mainly through multiunit ownership and what Brenneman calls a “thoughtful addition of units.” The company’s closure rate, according to Restaurant Research, has increased every year since 2004, with an average closure rate of 8 percent between 2003 and 2007. By comparison, competitor Subway’s rate is 2.1.
Deno joined Quiznos from CCMP Capital Advisors, LLC where he was a managing director. While at CCMP, Deno was a board member of Quiznos. In May 2006, Cervantes Capital sold part of its ownership in Quiznos to affiliates of J.P. Morgan Partners, LLC, a private equity division of JPMorgan Chase & Co., in order to take the company to the next level. Cervantes Capital and JPMorgan Partners together with Brenneman’s firm, TurnWorks Inc., which invested in January 2007, all continue to have significant equity positions in the company.
To read the 2007 QSR interview with Brenneman, click here.
For the Toasted Subs Franchisee Association’s response to Brenneman’s 2007 interview, click here.