You're Toast!

Franchise owners thought they'd make a fortune serving the toasted sandwiches created by Quiznos. Instead, they got burned.

The Classic Italian sub is a glorious mountain of salami, pepperoni, capicola, ham and mozzarella piled high between two thick slices of fresh-baked bread. The cheese is soft and gooey, and the bread's corners have a perfect, light crunch.

Mmm, mmm, toasty.

The Classic Italian has been on the Quiznos menu since the first store opened in 1981, on the corner of 13th Avenue and Grant Street. It has lasted as a customer favorite through ownership changes, the company going public, the company going private again, bizarre ad campaigns featuring spongmonkeys and a human suckling on a wolf, upwards of 5,000 grand openings, and new sandwich creations such as the recent Prime Rib on Garlic Bread.

Toasted bread wasn't enough to keep Ratty Baber, Chris Bray and Bob Baber from struggling with their franchises.
Toasted bread wasn't enough to keep Ratty Baber, Chris Bray and Bob Baber from struggling with their franchises.
Attorney Ted Bendelow represented Quiznos franchisees.
Anthony Camera
Attorney Ted Bendelow represented Quiznos franchisees.

"The important thing about Quiznos is, it really is a great sandwich," says Sherri Daye Scott, editor of the quick-service-restaurant trade publication QSR Magazine. "They have an amazing culinary team over there.

"They position themselves as hearty, well worth the money, bigger, more meat and more choices that other places don't have," she adds. "Among the sandwich kings, they did the best job of knowing what customers are looking for as far as taste trends, with meat, cheeses and breads."

But not at knowing how to appease franchisees. The Denver company is currently embroiled in a spate of lawsuits filed by the very same people it licenses to serve customers the tastiest, toastiest Classic Italians.

Chris Bray was politely defiant. Testifying before U.S. District Judge John Kane in his courtroom on the eighth floor of Denver's Alfred A. Arraj United States Courthouse in February, the Texan chose his words carefully.

Bray has been a Quiznos franchise owner for ten years. He opened his first store near Fort Hood, Texas, in 1997, when only a few hundred of the sub shops existed around the country. In December 2001, he and a handful of other owners founded the Toasted Subs Franchisee Association because the chain had begun implementing policies they considered deceptive, like taking away their oversight of how advertising dollars were being spent and forcing them to sign more expensive service contracts that earned the corporation kickbacks from the providers. The group started a website where franchisees could commiserate and tried to use the organization to negotiate changes within the company.

Quiznos started filing disparagement lawsuits against Bray and others who had posted comments on the website forum. The TSFA, meanwhile, began recruiting potential plaintiffs who were willing to pay into a legal fund, and they enlisted the help of a prominent franchise attorney.

On November, 20, 2006, the group filed its first class-action lawsuit in Wisconsin, alleging racketeering and charging Quiznos with setting up an illegal business model by which the corporation makes its profits off of franchise fees and products it forces franchisees to buy. A few days after the complaint was filed, a franchisee in California walked into a Quiznos restroom and shot himself three times in the chest.

Bhupinder "Bob" Baber left a note to the media calling his suicide a sacrifice. Bray, a friend of Baber's, posted the letter on the TSFA website; within a week, Quiznos terminated franchisee agreements with every boardmember of the TSFA. Their stores would close, and the hundreds of thousands of dollars they'd invested would be lost.

That decision was made by Patrick Meyers, Quiznos chief legal officer at the time and general counsel since 1997. He testified to Judge Kane that the company's relationship with Chris Bray and the TSFA had been acrimonious in recent years, but it wasn't until he read the suicide note on the TSFA website that he decided to close their stores. "Mr. Baber's suicide note was completely different," he said in court. "It was, first of all, playing on a tragedy of a man killing himself. It was exploitive, accusing our brand of horrible things. That posting was nothing but to directly attack us. To me, it was black and white."

Michael Daigle, executive vice president for development, also testified that he was outraged by the suicide note's posting. "It was pretty distasteful to capitalize on that tragedy," he said. "The message was 'Don't become a Quiznos franchisee, because you'll end up killing yourself.'"

Bray and the others did not walk away quietly. They filed a complaint asking the U.S. District Court in Denver to stop Quiznos from taking their stores, arguing that their First Amendment rights had been violated. Five of those eight plaintiffs settled with Quiznos, with two more claiming that they had played no role in the decision to post the suicide note. That left Bray to explain to Judge Kane why he made the suicide note public. And that's fine with him. For Bray -- a man who lists fighting corporate injustice among his hobbies -- this is a matter of principle. On the stand in Denver, Bray told the court he posted the suicide note because Baber's wife, Ratty, asked him to -- and because a lot of TSFA members agreed with Baber's sentiments.

Quiznos attorney Fredric "Ric" Cohen objected to the answer, but Kane overruled him.

When it was his turn to cross-examine Bray, Cohen came armed with a stack of depositions and exhibits. "You read the suicide note before you posted it on the TSFA website," asked Cohen, then an attorney with DLA Piper US in Chicago. "Before posting it you took no effort to verify its content?"

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