Less than a week after Sbarro filed for Chapter 11 bankruptcy for the second time in three years, Quiznos has followed suit with a filing of its own. The move comes with an approved “prepackaged” restructuring plan that will reduce the Denver-based sandwich chain’s debt by more than $400 million.
The bankruptcy filing is designed to increase the company’s flexibility as well as “elevate the profile of the brand and help increase sales and profits for our franchise owners,” said Stuart K. Mathis, Quiznos chief executive officer. “We look forward to continuing to work with and support our global network of franchise owners, who are the backbone of our business.”
Senior lenders have agreed upon $15 million in financing to support the ongoing operations of the company during bankruptcy. Support from lenders is expected to allow the company to recover quickly.
The filing is also not expected to affect the vast majority of Quiznos 2,100 restaurants in the U.S. and 30 other countries which are owned by independent franchises. Only seven Quiznos restaurants are company-owned.
Karen Lo is an associate editor at The Daily Meal. Follow her on Twitter @appleplexy.