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Quiznos Getting Toasty in C-Stores

DENVER -- Quiznos, the sandwich chain known for its hot-from-the-oven creations, is making a big push to offer convenience store patrons an alternative to microwave fare, The Wall Street Journal reported.

While McDonald's Corp., Yum Brands Inc.'s Taco Bell and rival sandwich chain Subway, among others, have been aligning with c-stores and gas stations for many years, the much smaller Quiznos, with more than 4,000 restaurants in North America, is now jumping in with plans to sign up convenience store locations at the same clip as it opens traditional stores over the next several years, according to the report.

"A lot of people are working two jobs in this economy and are busier and busier, and convenience is becoming more and more important," Quiznos Chief Executive Rick Schaden, told the Journal. Adding Quiznos to convenience stores enables the company to insert itself "in places that normally wouldn't support a traditional Quiznos, like service plazas, truck stops and urban areas," he noted.

Quiznos began opening mini restaurants inside c-stores such as BP, Chevron and Circle K last year and now has 175 units. The Denver-based company plans to double that number next year and then double it again by the end of 2012, for a total of about 700 locations, while also opening about the same number of traditional Quiznos restaurants.

Starting in March, Quiznos will serve breakfast -- cinnamon rolls and biscuit-and-egg sandwiches, among other things -- at its convenience-store locations to capture sales from customers who stop in for their morning coffee, the report stated.

The store operators, which become Quiznos franchisees, bear the cost of remodeling to accommodate the restaurant, with its ovens and, in some cases, small seating areas. Franchisees pay Quiznos an annual royalty fee of 7 percent of the restaurant's sales and make a yearly advertising-fund contribution of an additional 4 percent of sales.

Quiznos says its convenience store locations generate almost double the sales per square foot of traditional locations. The company projects that all of its convenience store restaurants will generate a total of $250 million in sales by the end of 2012.

John Shambo, owner of Main Street Exxon in Northampton, Pa., who sought out Quiznos, previously had his own deli in the store, but said "it's a name-brand world and people want to know what to expect when they walk in the door."

Since he opened a Quiznos in his convenience store a year ago, he said his foodservice sales have almost quadrupled. One of his potato-chip vendors has seen sales rise 25 percent during that time. And the increased visitors are buying more lottery tickets and other items, boosting Shambo's store sales 15 percent, according to the report.

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