Quiznos Soared High and Crashed Hard. Can It Make a Comeback?

The salutation of “We’re back!” doesn’t have the best track record in American popular culture. It was the line uttered by the evil spirit that grabs poor little Carol Anne in Poltergeist III. Advertising aficionados might recall that “We’re back” was also the slogan originally pitched to Apple in 1997—one that Steve Jobs proclaimed “stupid,” opting to go with “Think Different” instead.

And then came this summer, when “We are baaack!” rang in consumers’ ears yet again. This time it came from the mouths of a couple of bowler-wearing, guitar-playing rodents suffering from strabismus and bad teeth—better known as the Spongmonkeys—who had news to share. A onetime restaurant highflier that spiraled to its doom and all but disappeared was once again bidding for American’s lunchtime dollar.

Quiznos was back. Or, rather, with the help of TV mascots last seen 19 years ago, Quiznos was announcing its intent to come back.

Remember Quiznos?

That’s no minor ambition. Quiznos ranks among the biggest chain restaurant collapses ever. From a high of some 4,700 locations at its 2007 peak, Quiznos’ unit count now hovers around 165; slightly more than 96% of its system has disappeared.

Some experts say the company can’t pull out of a dive like that. But the brass counters that Quiznos isn’t the same brand it was just five years ago. Purchased out of bankruptcy in 2018 by private equity firm High Bluff Capital Partners, Quiznos is now part of the Rego Restaurant Group. Along with new leadership, Quiznos has new store prototypes and new menu items.

The Spongmonkies marketing is one thing that isn’t new. But the creatures are nevertheless part of a reworked strategy that depends on reawakening a fondness for the brand that Rego is confident is still out there.

“We can see in Google search data, there’s still a tremendous amount of ‘what happened to Quiznos?’” Quiznos CMO Brent Phillip told Adweek. “The public [is] saying, ‘Bring Quiznos back to my community.’”

From fame to fiasco

Once upon a time, Quiznos was a proud progenitor of today’s $170 billion fast casual segment, an eatery that departed from sub-chain norms by offering premium ingredients, stylish interiors and the (then) novelty of toasted sandwiches. Throughout the ’90s, franchisees flocked, and the chain grew quickly.

But no sooner had Quiznos crested than its troubles began: a 2006 IPO that left it leveraged to the tune of $500 million, and then the Great Recession. But according to veteran restaurant consultant John Gordon, the coup de grâce was the downfall of franchisees—by the thousands.

Quiznos convinced its suppliers to impose a “sourcing fee” of up to 30% that delivered additional revenue to corporate but resulted in “an unreasonable burden on the franchisees’ cost of goods,” said Gordon, who’d testify as an expert witness in subsequent franchisee suits against corporate. “Because of that, the franchisees had [to impose] prices that were astronomically higher than Jimmy John’s or Subway or any of those guys. That is the reason the franchisees failed so quickly.”

One of those failed franchisees was a man named Baber Vhupinder who, distraught over his losses, took his own life inside of his restaurant in 2006. The note he left behind concluded with: “I deeply regret getting into Quiznos. I wish I had never heard of them.”

All attention is good attention

Overcoming a history like that won’t be easy. But one mercy for the company, according to George Mason University School of Business marketing professor Russell Abratt, is that while the chain has burned bridges with franchisees, “I don’t think that many of its loyal consumer base are aware of these legal battles,” he said. “There are consumers that will support the Quiznos brand.”

Those consumers, however, will still need to be told that Quiznos wants their business back. And that job has fallen to the Spongmonkeys.

One curiosity of the creatures’ return is that they were so polarizing when they first debuted in 2004. As Bob Gray wrote in his 2014 book Great Brand Blunders, “What Quiznos hadn’t bargained for was how negatively the Spongmonkeys would be perceived by many consumers. While the raw quirkiness of the work struck a chord with a young audience, many older consumers didn’t much like the idea of a restaurant chain promoting itself using character that reminded them of rats.”

So why would a chain bring back mascots that freak out a big portion of its customer base? “[Quiznos] already owns it, so there’s no cost,” ventured Bret Bero, assistant professor of practice in the management division of Babson College. “What they know is that it’s controversial—it draws attention.”

And that seems to be the point. Quiznos’ website features a page that lets visitors reacting to the mascots to vote Love ‘Em or Hate ‘Em. The object, clearly, is generating buzz, whatever the sort.

“We need to be loud with our messaging,” Philip explained. “Loud in a way that our message is so absurd, shareable and engageable.”

Rodents aside, the website has also taken hat in hand to apologize for the brand’s disappearance. “It’s harder to find a Quiznos these days, and we’re here to fix that,” the copy intones. “Because it’s a new day, and we’re bringing Quiznos back.”

Now accepting applications

Of course, a comeback will mean attracting investors to build new restaurants. To a degree, this too is a function of marketing, given the amount of reputation repair the company has had to do.

Phillip maintained that Quiznos is finding them already. “There are franchisees who had taken a break from the brand who are coming back,” he said. “Those folks are very important to brand decisions that are happening today. They’ve had a strong seat at the table.”

And, to make clear that this is not the Quiznos of old, he added: “Profitability of the franchisees is our No. 1 focus.”

Fair enough. But Bero is skeptical that enough franchisees will step forward to return the chain to major player status. Today’s Quiznos has “a slightly new business model and maybe it’s more attractive,” he said. “[But] if it’s such a good model, the franchisees would be running towards it—experienced franchisees—and they’re not.”

Not your father’s sandwich chain

If Quiznos 2.0 can prove to potential franchisees that it’s better than its predecessor, it’ll have to do the same for customers.

“They would need to establish clear points of difference in their offering to differentiate themselves from the competition,” Abratt said. “They need to add value for the Quiznos brand to resonate [again].”

Quiznos CEO Tim Casey seems acutely aware of this point. “When Quiznos first started, it was a disruptor in the sub/sandwich space, doing things no one else was doing,” Casey wrote on the Quiznos homepage. “And we’re committed to getting back to that. We’re bringing in new, innovative equipment, which will take the menu in a unique and special direction to further differentiate the brand.”

While headquarters is working on new store prototypes—including a drive-thru feature—the principal lure for guests will be higher-end sandwiches.

“One of Quiznos’ strengths in the future is chef-inspired recipes and flavors,” Phillip said. “We take global, unique flavors and put them into approachable sub forms” like a Kimchi Philly, Chicken Carbonara and a French Dip.

Time will tell if such measures move the needle. Gordon remains doubtful. “The fact remains that Quiznos is not cool anymore,” he said. “The problem is that it’s a faded star.”

Meanwhile, the Spongmonkeys will continue to evangelize for Quiznos for the foreseeable future. They may not be cool anymore, either, but Phillip believes they’ve always delivered the goods. From the moment they debuted, “they were ridiculous,” he said. “They made a splash.”