ASSOCIATED PRESS Quiznos' new CEO Greg Brenneman, above in 2005, is using the expertise he gained with Continental Airlines and Burger King to help turn around the troubled sandwich chain.

Quiznos CEO bakes up turnaround

Greg Brenneman, who once tried to merge two isle airlines, is working to boost Quiznos' sales

DENVER » Long before dawn breaks, Greg Brenneman is on the run, a habit that can be a bit disconcerting for his temporary houseguest.

Quiznos' new chief executive officer invited Steve Provost to stay with him during his move to Denver, an invite that extended to eight-mile runs. "He runs on a treadmill and I try desperately to keep up next to him," joked Provost, the new chief marketing officer.

Brenneman, who relishes a challenge as much as he does a good run, is applying his turnaround expertise -- first with Continental Airlines and then Burger King -- to the troubled sandwich chain, whose dissatisfied franchise owners have complained about low profits, company operating requirements and the franchisee recruiting process.

The 45-year-old Brenneman also is well known in Hawaii for his attempt to merge Hawaiian Airlines and Aloha Airlines. That deal, announced in December 2001, fell apart the following March after Hawaiian said it no longer supported the merger. Under the proposal, Brenneman would have become the chairman and CEO of the new airline and his company, Texas-based Turnworks Inc., would have owned 20 percent of the new entity.

Since jumping into the fray in January, Brenneman has worked to reduce food costs by as much as 4 percent, open communication channels with franchisees and test new products, like a Quiznos taco, to boost profits.

"In these situations, the biggest challenge is always identifying what the few things you can do to really improve profitability for the franchise owners are and then doing them quickly," said Brenneman.

Ron DiSaverio, who owns three Denver-area Quiznos, said the company is moving in the right direction. "It just takes awhile so I'm always a little bit wait-and-see attitude only because that's the nature of this business," he said.

Founded in 1981 in Denver's Capitol Hill neighborhood, Quiznos sought from the beginning to set itself apart with made-to-order toasted subs. The company and its 18 restaurants were purchased 10 years later by franchise owner Rick Schaden and his father, Dick Schaden, who set it on a fast-growth track.

The Schadens took the company public in 1994, only to convert it to a private operation in a $6.5 million transaction in 2001 after deciding the stock sale wasn't an effective source of financing.

Last year, private equity firm J.P. Morgan Partners LLC became an ownership partner, and Brenneman later became a partner through Turnworks.

Through the roller-coaster ownership ride, the chain expanded quickly, to at least 5,000 stores. Today it's ranked third behind Subway and Arby's by Technomic, an industry analyst firm.

Brenneman, meanwhile, has reached out to franchisees and targeted their food and other costs. If he can cut food costs by 3 percent and coupon discount offers by 4 percent, Brenneman believes he can add $25,000 to $30,000 in profits for franchisees.

Quiznos has hired a new advertising agency, Cliff Freeman and Partners, to produce edgier ads that showcase upscale food at a lower cost. He has met with franchise owners, delivers a weekly voice mail call to discuss operating developments, and spends late-night hours answering franchisee e-mails. He also created a Web site to assist franchisees and plans to give each a free computer to help them with a new online ordering program.