Schlotzsky's dead!

NEWS WRAP: Schlotzsky's Files For Bankruptcy


DOW JONES NEWSWIRES
August 3, 2004 1:17 p.m.

AUSTIN, Texas (AP)--Schlotzsky's Inc. (BUNZ), a delicatessen franchiser with more than 500 outlets in 36 states and six countries, filed on Tuesday for protection from its creditors under Chapter 11 of the federal bankruptcy laws.

Schlotzsky's said operations would continue normally during the financial restructuring. The Austin, Texas, company owns 21 shops while franchisees own 492 stores.

The restaurant chain reported a net loss of $11.7 million in 2003 from a loss of $199,000 in 2002. It lost another $671,000 in the first quarter of 2004. In July, the company announced it was cutting 20% of its corporate staff and closing 15 company-operated shops.

"It became apparent to our board that this action was necessary to protect Schlotzsky's from millions of dollars in claims, judgments, and debts accumulated during the past few years, while enabling us to restructure the company," Sam Coats, Schlotzsky's president and CEO, said after the filing was made in U.S. Bankruptcy Court in San Antonio.

"I believe the actions taken by the board took great courage and are clearly in the best interest of the company," Coats said.

Schlotzsky's reported liabilities of about $71.3 million and assets of approximately $111.7 million, including approximately $64.8 million of intangible assets, according to the court filing.

Schlotzsky's will ask the bankruptcy court to issue a sale order that would allow the company to sell nine pieces of real estate to Westdale Asset Management Ltd., an affiliate of Schlotzsky's largest shareholder, for approximately $3.4 million. With the sale, the company would have an additional source of liquidity for its operations over the next few months, a company news release said.

Oh, no!! This was the only source for decent sandwiches in the small-town South. It was a regular stop on my way home. It was a bastion of fat in a scrawny world. How DARE they shut down? It riles my bowels to think they could be so thoughtless. (Well, not really: but the assonance sounds cool.)

quote:

Originally posted by Rick F.

Oh, no!! This was the only source for decent sandwiches in the small-town South. It was a regular stop on my way home. It was a bastion of fat in a scrawny world. How DARE they shut down? It riles my bowels to think they could be so thoughtless. (Well, not really: but the assonance sounds cool.)

Buck up! I don't think they're shutting down the restaurants. Just sticking it to the stockholders, giving the executives bigger bonuses and carrying on making crummy sandwiches as before.

I didn't care for em myself.. the sandwiches were...well.. weird.

In the late '70s and early '80s, Schlotzsky's sandwiches were truly remarkable: huge, with high-quality meats and cheeses on warm ciabatta-like round Italian loaves. Very close to a muffaletta, actually -- I seem to recall that the original sandwich even came with olives on it!

The problem was, they cut corners. The bread started to suffer, the quality of the fillings went down, and the sandwiches got smaller. Then it seems like they got into the habit of making the sandwiches beforehand and then nuking them whole to warm them. Heated cold cuts = nasty. The sandwiches became so salty and rubbery that they were inedible. I haven't eaten one in years, but I remember their better days.

I have yet to find a "chain" sub shop that delivers really, really, really, really good subs that make you want to go back again and again.

quote:

Originally posted by Jennifer_4

I didn't care for em myself.. the sandwiches were...well.. weird.

I agree, never liked them.
And they seemed so full of themselves, too.

quote:

Originally posted by Lucky Bishop

In the late '70s and early '80s, Schlotzsky's sandwiches were truly remarkable: huge, with high-quality meats and cheeses on warm ciabatta-like round Italian loaves. Very close to a muffaletta, actually -- I seem to recall that the original sandwich even came with olives on it!

The problem was, they cut corners. The bread started to suffer, the quality of the fillings went down, and the sandwiches got smaller. Then it seems like they got into the habit of making the sandwiches beforehand and then nuking them whole to warm them. Heated cold cuts = nasty. The sandwiches became so salty and rubbery that they were inedible. I haven't eaten one in years, but I remember their better days.

Yes, I have been puzzled by them because years ago I recall eating in a Schlotzsky's in Berkeley and I thought it was a local place. The food I recall then was much better than what I had more recently at one of their places in Arizona and, since the Berkeley store was only about a block from the gates of U. Cal, it was packed with students at lunchtime.

quote:

Originally posted by Kristi S.

I have yet to find a "chain" sub shop that delivers really, really, really, really good subs that make you want to go back again and again.

Well, since truly "local" sub shops of the sort I recall from my East Coast youth seem rare (frankly, I don't know where one is in SF and if anybody knows of a good one I'd appreciate it) on the West Coast, I often find myself patronizing SubWay and, while it certainly isn't as good as a good local shop, I do find the BMT acceptable if you hover over the guy/gal making it and make sure it's made the way you want it (in my case, "Italian" bread, hold the mayo/mustard, half the normal lettuce but twice the normal onions, plenty of hot peppers of all the available kinds and lots of oil/vinegar/salt/pepper).

I would never miss them if they closed up in our town. I've tried them twice and neither one impressed me at all. We have a Sub Station II that I really like. I really like Firehouse Subs and can even endure Sub Way. We have a Quiznos opening today. How is it?

quote:

Originally posted by emsmom

I would never miss them if they closed up in our town. I've tried them twice and neither one impressed me at all. We have a Sub Station II that I really like. I really like Firehouse Subs and can even endure Sub Way. We have a Quiznos opening today. How is it?

Quizno's is pretty good, I think.

But remember, I like Schlotzky's! My affection is based on my situation: Not since high school have I lived in an area with an Italian delicatessen! Was able, I think, to find a kosher deli in Memphis once, bit (obviously) it wasn't the same.

Schlotsky in Knoxville has been pretty good. I particlarly enjoy their choice of bread. Their pizza is pretty good. Their quality control is very good.

Paul E. Smith
Knoxville, TY

They opened one in Chico Ca when i lived there---i ate one sandwich there--it was ok--not great but ok.the shop was closed in 6 mos.

The Schlotzsky's in Midwest City, OK. was very good, over priced but very good. They have since had trouble with the help. They are so slow, it seems as if they can only make one sandwitch at a time. There is very, very few coustomers lately. Something has to happen.

quote:

Originally posted by emsmom

I would never miss them if they closed up in our town. I've tried them twice and neither one impressed me at all. We have a Sub Station II that I really like. I really like Firehouse Subs and can even endure Sub Way. We have a Quiznos opening today. How is it?

Quizno's strikes me as an odd duck. They specialize in oven-heated sandwiches--pretty much everything goes through an oven on a conveyor. It melts the cheese and so on and may be OK for things like meatballs subs and cheesteak type subs, but I prefer cold-cut subs UNHEATED. They also have salads but I've never had one because the pictures on the menu board look pretty chain/corporate/assembly-line--that is, they look like every scrap of lettuce is strictly portion-controlled and measured and not much is left to creativity.

I'm amazed they stayed in business this long. It was a hot June day in the summer of 96 and I was in South Bend. Schlotzsky's was down the street from my hotel and I was hungry. I ordered a corned beef sandwich, took one bite, and tossed it in the trash.

I used to eat at Schlotzkeys all the time when I lived in TX and was really happy when they opened one here. It closed a couple of months ago. My experience was that it was the same as when I ate them so many years ago, not what LuckyBishop has had happen. They didn't premake sandwiches, and they still used olives and quality meat. Some franchisees do a better job than others I guess!

Living on the East Coast, I have access to great Italian and Jewish deli food. A Schlotzky's opened by me a few years ago -- it's a Boston Market now -- and it was awful. Probably passable if you can't get the real thing.

BT
I was in San Francisco a few years ago and went to a very small Italian Deli a couple of blocks from the beach area. Had a great Italian Sub all imported meats and cheeses and homemade bread. Sorry I can't remember the name but I think I found it in the SF Yellow pages.

quote:

Originally posted by Rapunzll

I used to eat at Schlotzkeys all the time when I lived in TX and was really happy when they opened one here. It closed a couple of months ago. My experience was that it was the same as when I ate them so many years ago, not what LuckyBishop has had happen. They didn't premake sandwiches, and they still used olives and quality meat. Some franchisees do a better job than others I guess!

It's hard to believe they are that different because the things I didn't like when I ate there recently seem "corporate". For example, the bread they use now is mostly air and tasteless. It looked like you took pancake batter and beat lots of little bubbles into it, then baked it. Then there was the lettuce--lots of it (far too much for my taste) and it was machine shredded iceberg, also tasteless. Finally, the meats on my sandwich were also of the "chopped and formed" variety and as tasteless as everything else.

I can't believe different outlets would use different bread, meat and style of making sandwiches. But it don't recall having the same negative impression when I ate there years ago.

Places definitely do go cheap and ruin their food. I can remember when Arby's used real beef rounds and had great sandwiches and lines half way round the block. Now their meat is also "chopped and formed" and pretty tasteless, but I still like their sauce so I go there and eat sandwiches swimming in a mixture of horsey sauce and Arby sauce.

Honestly, the Schlotzsky's here was nothing like what you describe.

I too remember the old Arby's, they were fantastic! I don't think that lasted much more than a year though.

quote:

Originally posted by Lucky Bishop

In the late '70s and early '80s, Schlotzsky's sandwiches were truly remarkable: huge, with high-quality meats and cheeses on warm ciabatta-like round Italian loaves. Very close to a muffaletta, actually -- I seem to recall that the original sandwich even came with olives on it!

The problem was, they cut corners. The bread started to suffer, the quality of the fillings went down, and the sandwiches got smaller. Then it seems like they got into the habit of making the sandwiches beforehand and then nuking them whole to warm them. Heated cold cuts = nasty. The sandwiches became so salty and rubbery that they were inedible. I haven't eaten one in years, but I remember their better days.

Although LB and I agree on almost NOTHING, he's right on about Schlotzsky's. It's sad, because like so many businesses they had a great thing going, but they sacrificed quality for expansion. They are reaping what they sowed...

quote:

Originally posted by emsmom

We have a Quiznos opening today. How is it?

Just as despicable as Subway and Schlotzsky's. You have my condolences.

quote:

Originally posted by crankyyankee

quote:

Originally posted by emsmom

We have a Quiznos opening today. How is it?

Just as despicable as Subway and Schlotzsky's. You have my condolences.

Folks, I personally would NOT lump Subway in with the other 2. Subway IS a chain and, as I've said every time this discussion comes up, it ain't as good as a good independent sub shop, but not every town and community in America has a good independent sub shop these days. In fact, I live half the year in downtown San Francisco and I'd be hard pressed to name one anywhere near me. Certainly in the small community in Arizona where I spend cooler/rainier half of the year, there are none. So I go to Subway (even though they put my favorite hot dog joint out of business because there's nothing I can do about that now). And I've found that while their bread, in spite of the fact that they do bake it on-site, is spongy and underbaked and not nearly as tasty as a good Italian loaf or baguette, they do use honest meats, real cheese and genuine veggies and the people working there will pretty much make you a sandwich using the combination and quantity of ingredients you specify. The result, to my taste, can be a decent sandwich--which I did not get from Schlotzky and have not tried to get from Quizno's because I don't like their concept of heating nearly all their sandwiches and loading them down with artifical-tasting factory-made sauces.

quote:

Originally posted by emsmom

I would never miss them if they closed up in our town. I've tried them twice and neither one impressed me at all. We have a Sub Station II that I really like. I really like Firehouse Subs and can even endure Sub Way. We have a Quiznos opening today. How is it?

I tried Quizno's a couple of times and I just dont care for the toasted bread. The bread they use, or the method of toasting , or something makes the texture of the toast so sharp I felt as if it was actually cutting my mouth. I know that sounds weird, but I don't like it. Plus, those eeeeky little singing dead mouse things on the advertisments.. I think about those every time I see a Quizno's now, and hurry past!

x

Posted - 08/04/2004 : 09:27:10
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I have yet to find a "chain" sub shop that delivers really, really, really, really good subs that make you want to go back again and again.

HI.........I worked there for a month when they 1st opened- it's the owners who make it good or bad.....So that tells you why I was only there a month. I really like Zero's Subs- Not the one so much in Richmond- but the ones in VA Beach are good.

We are going to Myrtle Beach this Friday. Someone told me that the subs at Ultimate California Pizza are good. Have any of you ever tried them?

quote:

Originally posted by Kristi S.

I have yet to find a "chain" sub shop that delivers really, really, really, really good subs that make you want to go back again and again.

Penn Station East Coast subs is pretty good. It is a chain here in the midwest and a few locations in the south. They do toast all of their subs through an oven like Quizno's but they grill the meat on a hot griddle first which makes it better IMO.

In my tiny hometown of Ellwood City, PA there is an Italian restaurant called Vinny's which started as a sub shop. While it is now a full size "family" restaurant, they've kept the subs on the menu. You can get a "whole" sub (about 15") for about $5.75. Everything is homemade on real Italian rolls and the subs are toasted, just like Quiznos gimmick, but these are done in a real oven. You can get them cold, too, if you ask. We have a Subway, which is not bad if you aren't picky. Quiznos has opened a franchise in a neighboring town, but why go there for a toasted sub, when there are homemade ones right here?