Quiznos today announced an initiative to renegotiate franchisee leases, effectively reducing the single largest expense franchise owners incur. Quiznos has established three teams to renegotiate store leases into accordance with current market values, at no cost to franchise owners.
“Even a down economy can be an opportunity, and the current market for retail rent is an example of that,” says Rick Schaden, Quiznos founder and CEO. “Through innovative and strategic techniques, we are working toward mitigating the impact of the economic situation and ensuring our franchise owners’ success. My primary goal as CEO is for franchise owners to say in one year from now they are better off than they are today.”
Since the teams have been in operation, Quiznos has negotiated more than 40 leases thus far, with an average reduction of 15-20 percent in lease payments.
The store leases in consideration include leases that are expired as well as those that have high rent given current property values. This program will be beneficial to both franchise owners and lessors, lowering the leasing cost while extending the lease.
Thomas Mihailovich, a franchise owner in Rochester Hills, Michigan, participated in the lease renegotiation program in late February. Quiznos and a third-party team worked with Mihailovich and his lessor to arrange a reduction in rent of more than 20 percent, a cost savings of $50,000 over the term of the lease.
“I began the process, and within one week I was saving nearly $500 per month on my rent,” Mihailovich says.
Schaden is focusing Quiznos’ 2009 business plan around maximizing profitability for franchise owners in non-traditional ways, such as the lease renegotiation initiative.
“Rick started with Quiznos as a franchise owner before growing the Quiznos brand into what it is today,” says Greg Brenneman, executive chairman for Quiznos. “He knows what it takes to make franchisees profitable and personally understands those costs that affect the bottom line.”