Quiznos sandwich chain has hired advisers to help it restructure and rework its finances.
"Quiznos has hired a financial adviser to assist in working constructively with its lenders to develop a proper financial structure for the company," the company said in a statement Friday. "We expect these activities will not adversely impact Quiznos customers, franchise owners, employees or business partners. We fully expect this process to drive an outcome that will help the brand grow and prosper."
Citing people familiar with the matter, the Wall Street Journal reported Friday that Quiznos has brought in law firm Paul, Weiss, Rifkind, Wharton & Garrison and investment bank Moelis & Co. to negotiate with creditors over its $850 million debt. Quiznos is considering asking hedge funds and others holding $225 million of the debt to forgive those obligations in exchange for ownership stakes, the newspaper said.
Quiznos is owned by private-equity firm CCMP Capital Advisors LLC, founder Rick Schaden and Consumer Capital Partners, his investment firm. Schaden owns the majority of the company through his investment firm. Its shares were traded publicly until 2002.
The newspaper said the company told lenders its second-quarter results will likely come in well below previous projections. Its revenue fell as customer traffic dropped during the recession.
Quiznos has roughly 3,500 stores across the U.S. and in other countries and had closed about 1,500 in recent years. It said in January that it was laying off 69 employees at its corporate headquarters in Denver.
In February, it announced that it planned to open restaurants in more than 40 countries and territories, with target markets in Central and South America, Europe, the Middle East and Southeast Asia. It planned to open its first location in India last spring.