Quiznos is moving ahead with upgrades to its restaurants in order to restructure and improve profitability following a Chapter 11 bankruptcy filing.
Quiznos filed for Chapter 11 bankruptcy on March 17, listing debt of more than $500 million according to court documents. Executives at the restaurant chain agreed to a restructuring plan that will reduce its debt by more than $400 million. It is estimated that the chain has between $190 million and $265 million in value to distribute to its creditors, which falls short of covering its debt.
Quiznos was initially scheduled for a Chapter 11 plan confirmation hearing on April 25, but it has been pushed back to May 12 after unsecured creditors asked for more time to examine the chain's restructuring strategy.
"This type of extension which provides the creditor committee and their advisers an opportunity to review our plan is common in a restructure process," said CEO Stuart Mathis, reports Nation's Restaurant News. "We met with this committee for the first time earlier this week. Based on our conversations with them we do not anticipate any major issues will arise and will significantly deter or prolong our court supervised process. We still expect to execute our plan successfully and emerge from this court supervised process on an accelerated basis."
Part of Quiznos' plans to improve profitability will include the rollout of a new point of sale system companywide before the end of the year, Quiznos told franchisees in a call on Thursday, according to a source. Currently, the system is being tested in roughly 40 locations. The new system is designed to be compatible with a Quiznos smartphone app that will potentially allow customers to order and pay for their meals.
Quiznos is also moving forward with modifications to its menu, which will eliminate underperforming items, reduce waste and make better use of existing ingredients. Two locations are currently testing a menu with 15 fewer SKUs, though the company said it was too early to discuss results.
Quiznos operates 2,100 locations worldwide, and all but seven are independently owned franchises. All units will remain open during the restructuring.
Quiznos follows behind pizza chain Sbarro, which also filed for Chapter 11 bankruptcy protection on Mar. 10.
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