Quiznos sold trade areas that never opened — and shrank from 5,000 stores to 145

Quiznos was founded in 1981 in Denver, Colorado, and grew into the second-largest sub sandwich chain in the United States through aggressive franchising. By 2007 it had more than 5,000 locations, with 4,700 in the US alone. The growth strategy was built on selling franchisees exclusive trade areas and requiring them to buy supplies through Quiznos' controlled supply chain at high markups.

The model was unsustainable. A 2003 internal memo revealed that 40% of Quiznos units were not breaking even. The Small Business Administration found a 23.4% failure rate for Quiznos franchises, compared to 4.8% for Subway. In New Jersey, Quiznos sold 234 trade areas between 2003 and 2004 — none of which ever opened a store. Franchisees accumulated crushing debt, with one reporting $750,000 in losses.

Franchisee lawsuits began in 2006, consolidated into a class action covering nearly 10,000 current and former franchisees. The suit alleged racketeering, supply chain price gouging, and misuse of marketing funds. Quiznos settled for an estimated $100–200 million in 2010. In a tragic coda, one franchisee took his own life in 2006 after a legal battle with the company, citing Quiznos in his final note.

On March 14, 2014, Quiznos filed for Chapter 11 bankruptcy. It emerged four months later having reduced its debt by $400 million, but the damage was done. By 2017 the chain had fallen from the second-largest sub chain to ninth place, with only 400 US stores remaining. By December 2023, only 145 Quiznos restaurants were still open.