DENVER — Is it a sandwich or a taco? A snack or a meal?
The Sammie, the newest product from Quiznos, can fit just about any category, a 200- to 300-calorie concoction of meats and greens folded into flatbread that sells for $2.
It's a key ingredient in Greg Brenneman's recipe to reshape the 5,200-restaurant sandwich chain, along with delivery, online ordering, new venues like kiosks in airports, colleges and likely even a big box retailer.
Brenneman's agenda is ambitious, designed to better position Quiznos in the fast-food industry where restaurants aim to please consumers who want convenient food while keeping one eye on the pocketbook and another on the sagging economy.
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The Sammie is one of the more innovative products in the value-priced snack or sandwich category, said Darren Tristano, executive vice president of Technomic Inc., a restaurant consulting company.
McDonald's Corp. offers a wrap, KFC has a snacker sandwich and Subway has specials featuring a 6-inch sub for $2.49. "Everybody in some way is addressing it," he said.
Brenneman's other ideas are intriguing, particularly delivery service and online ordering, Tristano said. "Very few chains are doing online ordering," he said. "The next generation really wants that."
The Denver-based, privately held chain is the latest turnaround project for Brenneman, a hard-driving executive with a "get-it-done" mantra who rarely takes a day off and confesses to texting business messages while riding a chairlift at Beaver Creek's ski resort.
Brenneman has borrowed from two previous turnaround projects — Continental Airlines Inc. and Burger King — for his revitalization of Quiznos, which he joined in January 2007 as chief executive officer. Quiznos was plagued by franchisee complaints about high food costs, low profits and company restrictions on how they could do business.
Brenneman and his team found the chain had a strong brand but weak profits created by a number of corporate decisions made over the years. The complex menu featured 29 sandwiches, including specialty sandwiches, each available at three different sizes and three different prices. Quiznos used coupons to attract patrons.
Brenneman assembled a team of fast-food industry veterans and began a "detoxing" process. They retooled the menu, eliminating about 15 percent of the items. They reduced their use of coupon offers to draw traffic; the company plans to issue only four to five coupons this year.
"This year, as we detoxed everything, we expected sales to come down fairly dramatically. They didn't actually," Brenneman said.
With the changes, food costs for franchisees fell about 4 percent across the board but transactions per store slowed before beginning to pick up in the fourth quarter, said Steve Provost, chief marketing officer.
"We had that stretch of time where we had to sort of say we've got to do this stuff because we've got to fix your profitability," he said.
Average sales for 2007 are estimated at $415,000 per store, about the same as a year ago, the company said. Quiznos is privately held and does not release most financial data.
Franchisees have reported mixed results from the changes; some are elated while others continue to see problems.
Danny Kessels, who runs a Quiznos store in Boulder, said food costs are high and some franchisees still have concerns over the placement of new stores. He said his 2007 profits were down 3 percent to 5 percent. Kessels is president of the Toasted Sub Franchisee Association, a support group that he said represents more than 20 percent of the owners.
In Shawnee, Okla., franchisee Gary Smoot said his profit increased about 8 percent from June to December, compared with the same six-month period in 2006. "The operators in this area are by and large much happier with what's going on," he said.
This month, Quiznos is unveiling a new advertising campaign featuring the baritone voice of actor Michael Clarke Duncan and a new slogan, "Mmmm, Quiznos love what you eat."
Other new products in the offing include a lobster salad sandwich and even a pizza.
Brenneman has high expectations for the delivery program aimed at consumers who stay in the office for lunch. Franchisee owners can add delivery for a $6,250 fee and can decide how and when to offer the service.
Although pizza chains have long offered delivery service, few sandwich chains have gone that route because of the cost, Tristano said. He believes Quiznos has a chance to succeed and pointed to Jimmy John's Gourmet Sandwich Shops of Champaign, Ill., as a chain that does a good job with delivery.
For Brenneman, the work ahead has turned to implementation: "This is really a year of execution. It's just a matter of continuously improving what we're doing."
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