DENVER Quiznos, the franchisor of nearly 5,000 sandwich shops, is joining other franchisors in taking on the role of lender to help its franchisees expand their businesses despite the chilly credit market.
Qualified Quiznos franchisees can borrow up to $10,000 at interest rates raging from 8 percent to 20 percent to buy new locations or update existing stores, the company said Tuesday.
“We see this microloan initiative as an excellent way to invest in our franchise owners,” said Rich Schaden, Quiznos founder and chief executive. “We look forward to helping good owners realize greater profitability and overcome the obstacles of the current credit market by providing the necessary capital.”
Late last year, operators such as Domino’s Pizza Inc. and Papa John’s International Inc. began offering small loans to operationally strong franchisees that were interested in buying more units. Other chains also have been considering the tactic to help franchisees that have struggled to obtain financing.
The amounts of the Quiznos microloans will vary depending on each franchisee’s circumstances. Franchisees have two years to repay the loans to Quiznos, which is able to offer more flexible collateral and credit requirements than most banks, said a company spokeswoman.
After testing the microloan process with a North Carolina franchisee in February, Quiznos is now processing six more franchisees for loans and others are expressing interest in the program, officials said.
Contact Dina Berta at [email protected].