DENVER -- The 4,000-unit Quiznos sandwich chain is for sale, with an estimated price tag of around $2 billion, reported the New York Times.
The family-controlled company, known for its toasted subs, is on the auction block, according to the newspaper, citing people involved in the process.
The company, which could fetch as much as $2 billion, has hired Goldman Sachs to help it find buyers and study alternatives. Quiznos and its advisers have recently sent out material to prospective buyers, according to people who have received it, and preliminary [image-nocss] offers are expected in January.
Interest in Quiznos is expected to be high, the report said, because it is growing at an annual pace of approximately 30% faster than most other restaurant chains. Quiznos franchisees had more than $1.3 billion in sales last year. Its annual earnings were about $135 million.
The chain has opened 800 restaurants in the last year alone, and it said that franchisees have already signed agreements to open 1,700 more. Quiznos has about 3,600 stores in the United States and 400 in 15 foreign countries. Still, it ranks a distant second to Subway, which has 21,000 restaurants. Blimpie, the third-largest sandwich chain, has about 1,800.
Quiznos is controlled by Rick Schaden and his father, Dick Schaden, who bought the company in 1991. The Schaden family had been franchisees of the company, which was founded in Denver in 1981. It was subsequently taken public and later taken private again by the Schadens.
According to the Times, the value of Quiznos became part of a family battle among the Schadens in the last several years as the former wives of Rick and Dick Schaden sued them, contending that they were defrauded at the time the company went private and that their shares were valued at $8 million less than their true worth. Several other shareholders also sued and a judge ruled against the Schadens, father and son, concluding that they acted in "bad faith" at the time of the deal. The cases were later settled for unknown amounts.
Despite the lawsuits, Quiznos has continued to grow around the nation. It began an advertising campaign last year starring Bob, a talking baby.
Analysts praise Quiznos for what are often described as innovative products and marketing, the report said. But some question how long the company will be able to grow so fast and whether it has begun to saturate the market in certain areas. Several Quiznos franchisees have sued the company, said the report, contending that it has allowed too many restaurants to be opened too near each other. Others have also sued, contending that Quiznos overcharged for food and materials. Quiznos has called the suits meritless.
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