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DENVER - If two groups of unhappy former shareholders have their way, the parent of the Quiznos Sub sandwich chain could be in for a toasting. A setback for the company loomed larger recently following a court defeat that Quiznos vowed to appeal.
Two separate lawsuits center on a stock-pricing battle that has simmered since the Denver-based company went private in December 2001, while growing toward its current size of more than 2,500 shops in 15 countries.
When the rulings, settlements and appeals are exhausted, Quiznos could stand to pay out almost $20 million to its former shareholders, lawyers involved in the two cases said.
But while Quiznos was preparing its appeal in one case and awaiting a ruling in another, it remained focused on its business.
The potential payments to the plaintiffs "won't jeopardize the company," Patrick Meyers, general counsel for Quiznos, said. "We have the resources to weather that kind of a ruling. It's important that franchise owners know it doesn't affect the business or the product. As far as we're concerned, business goes on."
As a private entity, The Quizno's Master LLC, which markets itself as Quiznos Sub, has grown to be the second-largest sandwich chain, after Subway. Quiznos' U.S. sales have more than doubled since 2000, from $270 million that year to $646 million in fiscal 2002, the last year for which figures are available. In size, the chain has more than tripled from the 838 outlets it had in 2000.
Of the estimated 1,763 domestic outlets in the chain at the end of Quiznos' fiscal year in September 2002, all but five were franchised.
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