NASDAQ: QUIZ INVESTOR
UPDATE
November 20, 1996
THE QUIZNO'S CORPORATION CONTINUES RECORD GROWTH
WITH 19 OPENINGS, 92 FRANCHISES SOLD IN 3RD QUARTER
3rd QUARTER HIGHLIGHTS:
. 19 new QUIZNO'S Classic Subs restaurants opened, setting a
new quarterly record over the previous 13 opened in a single
quarter
. 92 new franchises were sold, more than tripling the previous
record of 30 sold in a single quarter
. Revenue from royalties was up 43% to $424,349 from $296,110
in 3rd quarter 1995
. Systemwide sales rose 36% to $9.5 million from $7.0 million
in 3rd quarter 1995
3rd QUARTER FINANCIAL SUMMARY:
3 months ended Sept. 30 9 months ended Sept. 30
1995 1996 Change 1995 1996 Change
Revenue $1,748,455 $1,843,025 5% $4,612,643 $5,499,410 19%
Profit (Loss) $26,719 ($265,131) ($316,832) ($432,833)
Earnings/Share $0.00 ($0.10) ($0.13) ($0.17)
Systemwide Sales $7.0 m $9.5 m 36% $19.0 m $25.8 m 35%
Units Open 94 141 94 141
QUIZNO'S invested in its growth strategy in the 3rd quarter ended
September 30, 1996, by focusing on store openings and franchise
sales, achieving quarterly records and targeting long term pay-
offs in royalty revenue benefits in both areas.
The 3rd quarter focus resulted in 19 new restaurants opening and
sales of 92 franchises yielding fees of $550,750. While the
franchise sales fees were collected at the time of sales, they
are not posted to income until units open.
After three of the last four quarters being profitable, this
quarter's loss was attributed primarily to spending associated
with the franchise sales push and corresponding lower Area
Director territory sales in 3rd quarter. Historically, Area
Director fees fluctuate and can affect overall profitability from
quarter to quarter. The goal of QUIZNO'S as a franchise company
is to build substantial revenues from the royalty stream in order
to diminish the effects of these fees on the bottom line.
In the 3rd quarter, revenue from royalties continued to grow,
increasing 43% to $424,349 up from $296,110 in 3rd quarter 1995.
"Our first priority remains growth of the chain and serving our
customers the best sandwich in the market," said Rick Schaden,
president and CEO. "We will continue to take advantage of
opportunities for growth, even if it means a reduction in
financial performance in a given quarter."
Area Director Territories Sold 3rd Quarter Ending Sept. 30, 1996
Market No. of QUIZNO'S Time Period Commencement Date
Rockford, IL 11 3 years 9/30/96
Waco/Temple/Bryan, TX 18 4 years 9/30/96
(Expanded Territories)
Los Angeles County 17 10 years 11/08/96
Baton Rouge, LA 29 5 years 9/27/96
Franchises Sold, Restaurants Opened
A special limited time offer to existing, qualified franchisees
to buy a second franchise at a discounted rate helped to set the
record of 92 franchises sold in 3rd quarter 1996. The record
number of franchises sold prior to this quarter was 30 in 2nd
quarter 1996.
With the record 19 QUIZNO'S Classic Subs opened in 3rd quarter,
the chain now is operating in 24 states and Canada, compared to
23 in 2nd quarter 1996, and compared to 17 states in 3rd quarter
1995.
New QUIZNO'S Classic Subs Opened Since July 1, 1996
1426 NE Broadway #03 Portland, OR July 15
4341 MacArthur Blvd. Newport Beach, CA July 20
337 El Camino Real, #B Encinitas, CA July 25
2147 Fremont Dr. Canon City, CO July 29
61535 S. Hwy 97 Bend, OR July 29
415 Main Street Alamosa, CO July 29
202 S. 5th Ave. Yakima, WA July 30
3602 Tieton Dr. Yakima, WA August 3
524 Yakima Valley Hwy. Sunnyside, WA August 4
2412 Terrace Hts. Dr. Yakima, WA August 7
4802 Summitview Yakima, WA August 9
221 S. Fifth Street Louisville, KY August 25
132 Winrock Center Albuquerque, NM August 25
5252 Hickory Hollow Pky #FC-08 Antioch, TN August 25
208 S.W. 43rd Renton, WA September 25
Bluemound Rd. #FC8 Brookfield, WI September 26
2400 N. Oregon El Paso, TX September 27
720 W. Broadway Vancouver, BC September 30
Kitsap Mall Silver Lake, WA September 30
Route 82, South Park Mall Strongsville, OH October 15
7305 S. 85th Street Omaha, NE October 15
117 Northwestern W. Lafayette, IN October 19
2700 Richmond Rd. Texarkana, TX October 21
Foxcross Shopping Ctr. Topeka, KS October 25
Koin Building Portland, OR November 8`
121 W. Maryland St. Indianapolis, IN November 15
1308 N. Vanburen Kennewick, WA November 16
(Call Sue Hoover or Debbie Leider at 303-706-9338 for additional
copies of this update.)
A Form 10-K will be filed with the SEC in connection with this
Investor Update. Reference is made to such Form 8-K for
dicussion of certain risks relating to forward looking statements
herein.