SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
________________________________
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
April 1, 1997
________________________________
THE QUIZNO'S CORPORATION
(Exact name of registrant as specified in its charter)
Colorado 000-23174 84-1169286
(State of Incorporation)(Commission File No.) (I.R.S. Employer
Identification No.)
Denver Place, Plaza Tower
1099 18th Street, Suite 2850
Denver, Colorado 80202
(Address of principal executive offices)
(303) 291-0999
(Registrant's telephone number, including area code)
ITEM 5. Other event
Press releases regarding 1996 loss, growth plans and investor update
for 1997 previews.
Reg. S-K
Exhibit No. Description Item No.
*99.1 Press releases 99
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
THE QUIZNO'S CORPORATION
Date: April 2, 1997 By: /s/ Richard E. Schaden
Richard E. Schaden, President and Chief
Executive Officer
EXHIBIT INDEX
Exhibit No. Description Page
*99.1 Press releases 1
For release: 6 a.m. Mountain Time on Tuesday, April 1, 1997
QUIZNO'S POSTS 1996 LOSS;
OPERATING PROFIT IN CORE BUSINESSES
DENVER, Colo.-The QUIZNO's Corporation (Nasdaq: QUIZ) reported a loss
of $1,018,968, or ($.38) per share for the fiscal year ended December
31, 1996. The loss was due to non-cash expenses and other charges
including new program development costs, co-op advertising
contributions, reserves and losses associated with stores held for
resale.
"Our core businesses, both franchise operations and company store
operations, posted profits before depreciation and interest for
1996", said Richard E. Schaden, president and CEO. "With our
continued double digit growth in restaurants open, corporate revenue,
system wide sales and record number of franchises sold, we remain on
track with our national expansion of the chain.
"In 1996, we invested in programs such as QUIZNO's Express concept to
go into non-traditional venues and the design of an updated, lower
cost prototype store design-both of which we believe will pay off in
accelerated growth of the chain and improved restaurant unit
performance in 1997 and beyond," Schaden added.
QUIZNO's franchises and operates Italian-style quick service deli
restaurants called QUIZNO's Classic Subs. Currently there are 171
restaurants open in 27 states and Vancouver, British Columbia, and 65
Area Directors are developing QUIZNO's markets across the country.
Corporate revenue grew 15% for the 12 months ended December 31, 1996,
to $7.5 million from $6.5 million for the same period in 1995.
Royalties from franchised operations grew 52% from $1.04 million in
1995 to $1.59 million in 1996.
System wide sales grew 38% from $26 million in 1995 to $36 million in
1996. A record 172 franchises were sold in 1996, compared to 50 sold
in 1995.
Profits were posted both in franchise operations against general and
administrative sales and royalty, and advertising and promotion
expenses and for the operation of company-owned stores.
"At this point, we have a relatively strong balance sheet and good
cash position to build growth for the chain in 1997," said Schaden.
In December 1996, the Company received $2 million in financing from
Dallas-based Retail & Restaurant Growth, L.P. to use for its national
expansion, primarily to develop turnkey units to sell to franchisees
and to acquire existing restaurants to convert into QUIZNO's Classic
Subs.
For the first time since going public in early 1994, QUIZNO's
management plans to outline its expectations for 1997 through a
special Investor Update which will be released to brokers later
today.
This release contains forward-looking statements (as defined in the
Private Securities Litigation Reform Act of 1995) that are subject to
risks and uncertainties that could cause actual results to differ
materially from those set forth in the forward-looking statements.
Such risks and uncertainties include the effects of national and
regional economic and market conditions, the eating habits of the
American public, cost of labor and employee benefits, costs of
marketing, intensity of competition for locations as well as
customers, perception of food safety, legal claims and the
availability of financing for the Company and its franchisees. Such
risks are detailed from time to time in the Company's reports filed
with the SEC, including the report on Form 10-KSB for the year ended
December 31, 1996.
For more information contact:
Sue Hoover or Deb Leider, Corporate Communications, (303) 706-9338
or John Gallivan, CFO, (303) 291-0999
QUIZNO'S ANTICIPATES BEING NUMBER THREE SUB CHAIN IN 1997
For release at 6:30 a.m. Mountain Time on Tuesday, April 1, 1997.
DENVER_The QUIZNO's Corporation (Nasdaq:QUIZ), which franchises and
operates QUIZNO's Classic Subs restaurants, issued a special Investor
Update available to brokers and shareholders today that outlines the
Company's 1997 plans and anticipated growth mile markers.
"We are at a point in our national expansion where we can share some
of our growth activities," said Richard E. Schaden, president and
CEO.
The Investor Update reports that by the end of 1997, the QUIZNO's
chain is expected to have grown to a solid number three in the sub
sandwich restaurant segment in terms of the number of units open.
The Investor Update also reports that the Company believes it is on
track to reach a level of franchised units open in 1997 where
royalties will begin to equal and then exceed its basis General and
Administrative expenses.
Among other issues addressed in the Investor Update are the
following:
QUIZNO's Express Classic Subs units, introduced in 1996, are expected
to account for a quarter to a third of the chain's unit growth in
1997. Currently, 19 QUIZNO's Express units are operating across the
country in the non-traditional marketplace of travel plazas,
convenience and gas stores, airports, hospitals and universities.
In the last 20 days, QUIZNO's has executed multi-unit contracts to
open in truck stops, interestate service plazas and convenience and
gas stores co-branded with Conoco, Shell, Chevron, Amoco, Total and
Texaco. A majority of these units are expected to open in 1997.
QUIZNO's is seeing strong sales from its regional mall food court
sites and anticipates developing more of these sites in 1997. The
Company currently has 15 mall food courts open and expects to have a
total of more than 30 mall sites open or under development by the end
of 1997.
The special QUIZNO's Investor Update also outlines plans to roll out
a new unit design in 1997 which was developed to continue to lower
restaurant opening costs, to shorten construction time and to update
the original Italian design theme.
A prototype of this new design opened last week in downtown Denver,
and QUIZNO's expects to be building franchised units using the new
design by summer.
QUIZNO's is a quick service Italian deli-style concept which
currently serves signature oven-baked Classic Subs, soups, salads and
desserts and drinks. The Denver-based chain, founded in 1981 has
grown from 18 units in 1991 when Rick Schaden and has father
purchased the Company to 171 open in 27 states and Canada today.
QUIZNO's launched its national expansion after going public in early
1994.
This release contains forward-looking statements (as defined in the
Private Securities Litigation Reform Act of 1995) that are subject to
risks and uncertainties that could cause actual results to differ
materially from those set forth in the forward-looking statements.
Such risks and uncertainties include the effects of national and
regional economic and market conditions, the eating habits of the
American public, cost of labor and employee benefits, costs of
marketing, intensity of competition for locations as well as
customers, perception of food safety, legal claims and the
availability of financing for the Company and its franchisees. Such
risks are detailed from time to time in the Company's reports filed
with the SEC, including the report on Form 10-KSB for the year ended
December 31, 1996.
For more information contact:
Sue Hoover or Deb Leider, Corporate Communications, (303) 706-9338
or John Gallivan, CFO, (303) 291-0999
April 1, 1997 Nasdaq: QUIZ
Special Investor
THE QUIZNO'S COPRORATION PREVIEWS 1997
Corporate Overview
The QUIZNO's Corporation franchises and operates QUIZNO's Classic
Subs, an Italian-style deli quick service restaurant concept which
serves signature oven baked Classic Subs. The Company was founded in
Denver in 1981. In 1991, Rick Schaden and his father who were
franchisees at the time, bought the franchisor of the 18-unit chain
with a vision to take the concept national. In 1994, the Company
went public. Today there are 171 QUIZNO's Classic Subs restaurants
open in 27 states and Vancouver, British Columbia, and 65 Area
Directors are developing QUIZNO's markets in territories across the
country.
QUIZNO's management has issued this Investor Update to share a number
of mile markers in its national growth plan which it believes will be
reached in 1997.
Royalty Stream Expected to Support Overhead
QUIZNO's believes it is on track to reach a level of franchised units
open in 1997 where royalties will begin to equal and then exceed its
basis general and administrative expenses.
As a franchisor, QUIZNO's has three main sources of revenue: ongoing
royalties from its franchised restaurants, initial franchise fees and
area director marketing fees. In the early growth, stages, a
national chain typically needs revenue from area director marketing
fees and initial franchise fees to cover overhead expense required to
support its franchise community. As more units open, the royalty
fees meet and exceed those costs. The following shows QUIZNO's
increase in revenue from royalties since 1993:
<TABLE>
<CAPTION>
<S> <C> <C>
Year Revenue from Royalties % Increase
1993 $ 525,201
1994 $ 779,249 48%
1995 $1,046,329 37%
1996 $1,590,673 52%
</TABLE>
Quizno's Expected to Grow to No. 3 Sub Chain
The Company believes it will be established in a solid third place
among all sub sandwich chains in terms of number of units open by the
end of 1997. The sub sandwich segment currently is one of the
fastest growing and most watched in the restaurant industry.
This forecast is based not only on the current number of units open
by leading chains, but on the amount of pre-opening
activity_franchises sold and Area Directors in place_that QUIZNO's
has compared to other chains. Today, QUIZNO's has Area Directors
developing restaurants in territories representing 54 percent of the
U.S. In 1996, QUIZNO's sold 172 new franchises, compared to 50 in
1995. That number is expected to continue to grow rapidly as Area
Directors are added and their development contracts escalate.
QUIZNO's Express Units Expected to Represent 1/4 to 1/3 Chain's 1997
Growth
In 1996, the Company developed QUIZNO's Express and made a strategic
decision to pursue growth simultaneously in non-traditionaly venues
with its aggressive expansion into traditional sites across the
country. That commitment has resulted in 19 QUIZNO's Express units
open today in the non-traditional marketplace of travel plazas,
convenience and gas stores, airports, hospitals and universities.
The Company believes between a quarter and a third of the chain's
growth in 1997 will come from non-traditional units. At present, 22
additional QUIZNO's Express units are sold and under development.
QUIZNO's Express units currently are open at Denver International
Airport and Albuquerque International Sunport, as well as Denver's
Coors Baseball Park. In the past 120 days, QUIZNO's ha signed multi-
unit contracts to open in truck stops, interstate service plazas, and
convenience and gas stores co-branded with Conoco, Shell, Chevron,
Amoco, Total and Texaco. The majority of these are expected to open
in 1997. In addition, five QUIZNO's Express units are already open
in the Washington-based Maid O' Clover convenience shore chain and
another six are scheduled to open in 1997.
QUIZNO's Targets Regional Mall Food Court Development in 1997
QUIZNO's is seeing strong sales from its existing regional mall food
court units and anticipates developing more of these sites in 1997.
Currently, the Company has 15 mall sites operating and expects to
have more than 30 open or under development by the end of 1997.
QUIZNO's Plans to Roll Out New Unit Design
In late March, QUIZNO's opened a prototype of a new unit design in
downtown Denver which was developed to continue to lower opening
costs and to shorten opening time by utilizing modular construction.
The new QUIZNO's design also updates the original Italian theme,
giving the restaurant a fresher, more modern look. This design is
expected to be rolled out to franchised units by summer.
This release contains forward-looking statements (as defined in the
Private Securities Litigation Reform Act of 1995) that are subject to
risks and uncertainties that could cause actual results to differ
materially from those set forth in the forward-looking statements.
Such risks and uncertainties include the effects of national and
regional economic and market conditions, the eating habits of the
American public, cost of labor and employee benefits, costs of
marketing, intensity of competition for locations as well as
customers, perception of food safety, legal claims and the
availability of financing for the Company and its franchisees. Such
risks are detailed from time to time in the Company's reports filed
with the SEC, including the report on Form 10-KSB for the year ended
December 31, 1996.
For additional copies of this Investor Update, call QUIZNO's
Corporate Communications, (303) 706-9338.
