Quiznos Corp · 10QSB · For 3/31/96

Filed On 5/15/96   ·   SEC File 0-23174   ·   Accession Number 915803-96-1

Quarterly Report -- Small Business   ·   Form 10-QSB
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Document/Exhibit                   Description                      Pages   Size 

 1: 10QSB       Quarterly Report -- Small Business                    14±    65K 
 2: EX-27       Financial Data Schedule                                1      5K 

10QSB   ·   Quarterly Report -- Small Business
Document Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION                
Washington, D.C. 20549                

FORM 10-QSB                 

(X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                
SECURITIES EXCHANGE ACT OF 1934               
For the quarterly period ended March 31, 1996               

OR                

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                
SECURITIES EXCHANGE ACT OF 1934               
For the transition period from        to  ______                

Commission File Number 000-23174                

THE QUIZNO'S CORPORATION                

Colorado          84-1169286                

7555 East Hampden Avenue, Suite 601 Denver,         
Colorado  80231                         

Registrant's Telephone Number Is (303) 368-9424                     

Check whether issuer (1) has filed all reports required to be           
filed by Section 13 or 15(d) of the Exchange Act during  the past               
12   months (or for such shorter period that the  registrant  was               
required to file such reports), and (2) has been subject  to such               
filing requirements for the past 90 days.                                       

Yes  X    No                      

State  the  number  of shares outstanding  of  each  of  the              
issuer's  classes  of common stock, as of the latest  practicable               
date.                                                                           
                                Outstanding at
Class                                              May 10, 1996                 
Common Stock, $0.001 par value                 2,864,757 shares                 
THE QUIZNO'S CORPORATION                                                        
Commission File Number:  000-23174                

Quarter Ended March 31, 1996                

FORM 10-QSB               

Part I  FINANCIAL INFORMATION               

Consolidated Statements of Operations                      Page 1               

Consolidated Balance Sheets                                Page 2               

Consolidated Statements of Cash Flows                      Page 4               

Consolidated Statement of Stockholders' Equity             Page 6               

Notes to Consolidated Financial Statements                 Page 7               

Management's Discussion and Analysis of Financial                               
Condition and Results of Operations                       Page 9              

                                                                · Download Table
                                                                  
                    THE QUIZNO'S CORPORATION                      
              CONSOLIDATED STATEMENTS OF OPERATIONS               

                                              Three Months Ended  
                                                  March 31,       
                                              1996           1995 
                                                                  
REVENUE:                                                          
  Royalty fees                            $318,935       $209,576 
  Initial franchise fees                   255,000         75,000 
  Area director marketing fees             250,486        180,895 
  Sales by Company owned stores            627,992        667,272 
  Sales by stores held for resale           16,946         89,943 
  Interest income                           40,814         42,820 
  Other                                     55,170         36,770 
                                         1,565,343      1,302,276 
EXPENSES:                                                         
  Sales and royalty commissions            133,726         26,477 
  Franchise advertising and promotion       88,573          7,451 
  General and administrative expenses      738,267        542,303 
  Cost of sales at Company stores          218,694        228,477 
  Cost of labor at Company stores          191,013        207,047 
  Other Company store expenses             208,718        266,315 
  Stores held for resale expenses           30,529        134,988 
  Loss of sale of Company stores            60,079             -  
  Depreciation and amortization             71,643         54,888 
  Interest expense                          17,149         32,796 
  Provision for loss on stores                                    
    held for resale                             -           6,000 
                                         1,758,391      1,506,742 
Net loss                                  (193,048)      (204,466)

Preferred stock dividends                  (14,235)       (14,235)

Net loss applicable to                                            
 common shareholders                     $(207,283)     $(218,701)

Net loss per share of common stock          $(0.07)        $(0.08)

Weighted average common shares                                    
 outstanding                             2,864,757      2,861,250 


                                                                · Download Table
                    THE QUIZNO'S CORPORATION                      
                   CONSOLIDATED BALANCE SHEETS                    

                             ASSETS                               
                                       March 31,         December 
31,                                                               
                                         1996          1995       
                                                                  
CURRENT ASSETS:                                                   
 Cash and cash equivalents            $1,038,013       $1,684,422 
 Restricted cash                          19,526           15,927 
 Accounts receivable, net of allowance                            
  for doubtful accounts of $13,877 in                             
  1996 and $11,777 in 1995               322,624          276,522 
 Current portion of notes receivable     452,156          304,918 
 Other current assets                    226,559          155,973 
 Assets of stores held for resale             -           144,499 
     Total current assets              2,058,878        2,582,261 

Property and equipment, at cost, net                              
 of accumulated depreciation and                                  
 amortization of $168,980 in 1996                                 
 and $144,561 in 1995                  1,282,657        1,083,476 

OTHER ASSETS:                                                     
 Intangible assets, net of accumulated                            
 amortization of $463,803 in 1996                                 
 and $414,500 in 1995                    511,203          537,149 
 Deferred assets                         475,799          588,051 
 Deposits                                 20,544           31,454 
 Notes receivable                        681,978          528,484 
     Total other assets                1,689,524        1,685,138 
                                      $5,031,059       $5,350,875 

              LIABILITIES AND STOCKHOLDERS' EQUITY                
CURRENT LIABILITIES:                                              
 Accounts payable                       $671,929         $713,446 
 Accrued liabilities                      77,187           53,168 
 Line of credit                          130,000          160,000 
 Current portion of long term                                     
  obligations                            163,631          171,217 
 Provision for loss on stores sold        23,892           58,000 
     Total current liabilities         1,066,639        1,155,831 

Line of credit                           190,505          215,505 
Long term obligations                    303,494          341,453 
Other liabilities                          2,226           12,101 
Deferred revenue                       1,358,648        1,309,155 
     Total liabilities                 2,921,512        3,034,045 

STOCKHOLDERS' EQUITY:                                             
 Preferred stock, 6.5% cumulative,                                
   convertible,$.001 par value,                                   
   liquidation value of $6 per                                    
   share plus unpaid and accumulated                              
   dividends, 1,000,000 authorized,                               
      issued and outstanding 146,000                              
      in 1995 and in 1994                   146              146  

 Common stock, $.001 par value,                                   
  9,000,000 shares authorized,                                    
  issued and outstanding 2,864,757 in                             
  1996 and 1995                            2,865            2,865 
 Additional paid in capital            3,276,120        3,290,355 
 Accumulated deficit                  (1,169,584)        (976,536)
     Total stockholders' equity        2,109,547        2,316,830 

                                      $5,031,059       $5,350,875 
                                                                · Download Table
                    THE QUIZNO'S CORPORATION                      
              CONSOLIDATED STATEMENTS OF CASH FLOWS               

                                              Three Months Ended  
                                                   March 31,      
                                                1996        1995  
                                                                  
CASH FLOWS FROM OPERATING ACTIVITIES:                             
  Net loss                                $(193,048)    $(204,466)
  Adjustments to reconcile net loss                               
   to net cash used in operating                                  
   activities:                                                    
     Depreciation and amortization           73,722        54,889 
     Provision for losses on accounts                             
      receivable                              2,100         1,100 
     Reserve for losses on stores sold      (19,609)        8,788 
     Promissory notes accepted for                                
      area director fees                   (178,986)           -  
     Changes in assets and liabilities:                           
       Restricted cash                       (3,600)         (268)
       Accounts receivable                 (100,454)       (5,925)
       Other current assets                 (70,586)      (66,434)
       Accounts payable                     (41,517)      (15,699)
       Accrued liabilities                   24,018        59,582 
       Deferred franchise costs             112,253       (10,186)
       Deferred initial franchise fees       49,493        74,812 
       Other                                 (9,875)          -   
          Net cash used in operations      (356,089)     (103,807)

CASH FLOWS FROM INVESTING ACTIVITIES:                             
  Purchase of property and equipment        (93,600)      (24,788)
  Acceptance of notes receivable           (119,611)      (60,902)
  Principle payments received on notes                            
   receivable                                50,117          --   
  Intangible assets                         (23,357)         --   
  Change in deposits                         10,910         6,516 
  Investment in stores under development       -          (27,672)
          Net cash used in investing                              
           activities                      (175,541)     (106,846)

                    (continued on next page)                      
                                                                · Download Table
                    THE QUIZNO'S CORPORATION                      
              CONSOLIDATED STATEMENTS OF CASH FLOWS               

(continued from previous page)                                    

                                              Three Months Ended  
                                                   March 31,      
                                                1996        1995  
                                                                  
CASH FLOWS FROM FINANCING ACTIVITIES:                             
  Proceeds from issuance of note payable      5,000            -  
  Principle payments on long term                                 
   obligations                              (50,544)      (66,835)
  Principle payments on lines of credit     (55,000)         --   
  Dividends paid                            (14,235)      (14,235)
        Net cash (used) provided by                               
         financing activities              (114,779)      (81,070)

Net increase (decrease) in cash            (646,409)     (291,723)

Cash, beginning of period                 1,684,422     3,112,575 

Cash, end of period                      $1,038,013    $2,820,852 


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                              
Cash paid during the period for                                             
interest                                 $17,149       $32,796            

SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING                    
ACTIVITIES:                                                                     
During  the  first  quarter of 1996, the Company  subleased  a            
Company  owned restaurant and granted the sublessee an  option            
to  purchase  the  restaurant through December  31,  1995  for            
$135,000.   During the first quarter of 1996,  the  assets  of            
the  restaurant were reclassified from Assets of  Stores  Held            
for  Resale to Property and Equipment, and written down to the            
amount  of  the  option price, with the loss, which  had  been            
accrued  at December 31, 1995, charged to Provision  for  Loss            
on Stores Held for Resale.                                                

During  the first quarter of 1995 the Company issued 2,500 shares               
of  its  $.001  par  value common stock to  Berger  Restaurant            
Corporation in exchange for the general partner's interest  in            
Quiz  One  Limited  Partnership  owned  by  Berger  Restaurant            
Corporation.   The  shares and the general partner's  interest            
were valued at $10,000.                                                   

                                                        · Enlarge/Download Table
                           THE QUIZNO'S CORPORATION CONSOLIDATED STATEMENT OF                        
                 STOCKHOLDERS' EQUITY                                                                

                             Convertible                                      Additional             
                           Preferred Stock                Common Stock                               
                                                                                Paid-in   Accumulated
                        Shares         Amount        Shares          Amount                          
                                                                                Capital     Deficit  
                                                                                                     
                                                                                                     
Balances at                                                                                          
 January 1,                                                                                          
 1995                    146,000         $146      2,860,000         $2,860 $3,339,495    $(684,964) 

Issuance of common                                                                                   
 stock in exchange                                                                                   
 for general partnership                                                                             
 interest                      -            -          2,500              3      9,997            -- 
Purchase price paid for                                                                              
 Quiz One Limited                                                                                    
 Partnership general                                                                                 
 partner's interest                                                                                  
 over historical                                                                                     
 book value (goodwill)         -            -              -              -   (10,000)             - 

Issuance of common stock                                                                             
 pursuant to employee                                                                                
 benefit plan                  -            -          2,257              2      7,803             - 

Preferred stock dividends      -            -              -              -   (56,940)             - 

Net loss                       -            -              -              -          -     (193,048) 

Balances at Dec. 31,                                                                                 
 1995                    146,000          146      2,864,757          2,865  3,290,355    1,169,584) 

Preferred stock                                                                                      
 dividends                    -            -              -              -    (14,235)            -  

Net loss                       -            -              -              -             -  (193,048) 

Balances at March 31,                                                                                
 1996                    146,000         $146      2,864,757         $2,865 $3,276,120  $(1,169,584) 

                    THE QUIZNO'S CORPORATION                                                         
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                

1.   In the opinion of management, all adjustments, consisting                                       
only   of   normal   recurring  adjustments   necessary   for   a                                    
fairstatement  of (a) the results of consolidated operations  for                                    
the  three month periods ended March 31, 1996 and March 31, 1995,                                    
(b)  the  consolidated financial position at March 31, 1996,  (c)                                    
the  statements of cash flows for the three month  periods  ended                                    
March  31,  1996,  and March 31, 1995, and (d)  the  consolidated                                    
changes in stockholders' equity for the three month period  ended                                    
March 31,1996, have been made.                                                                       

2.   The accompanying unaudited consolidated financial statements                                    
have   been  prepared  in  accordance  with  generally   accepted                                    
accounting   principles   for  interim   financial   information.                                    
Accordingly,  they  do  not  include  all  the  information   and                                    
footnotes  required  by generally accepted accounting  principles                                    
for  financial statements.  For further information, refer to the                                    
audited  consolidated financial statements and notes thereto  for                                    
the  year  ended  December 31, 1995, included  in  the  Company's                                    
Annual  Report  on  Form  10-QSB to the Securities  and  Exchange                                    
Commission filed on March 29, 1996.                                                                  

3.   The results for the three month period ended March 31, 1996                                     
are  not  necessarily indicative of the results  for  the  entire                                    
fiscal year of 1996.                                                                                 

4.   RELATED PARTY TRANSACTIONS                                                                      

      In 1995, the Company sold the Detroit area directorship  to                                    
Michigan Restaurant Development Corp., which is 100% owned  by  a                                    
majority stockholder of the Company, for $150,000 paid in cash.                                      

      Two  directors  of the Company own more  than  50%  of  the                                    
outstanding  shares of Illinois Food Managers, Inc.,  which  owns                                    
the  Chicago  area directorship and two operating  franchises  in                                    
Chicago.                                                                                             

      Two  directors of the company own 55% of S&K Food Services,                                    
Inc.,  which  was a franchisee until such franchise was  sold  in                                    
October, 1995.                                                                                       

      Two shareholders of the Company loaned Schaden and Schaden,                                    
Inc.  (Schaden) $99,243 in 1991 and another $62,000 in 1994 under                                    
notes  payable agreements.  The notes were assumed by the Company                                    
when it acquired Schaden in 1994.                                                                    

                    THE QUIZNO'S CORPORATION                                                         
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)                                    

4.   RELATED PARTY TRANSACTIONS (continued)                                                          

Summarized below is a recap of related party transactions                                            
included in the financial statements as of March 31:                                                 

                                                                · Download Table

                                      1996          1995      
                                                              
Assets                                                        
Accounts receivable                        $8,112      $20,680
Current portion of notes receivable         8,352        5,010
Notes receivable                           52,752       24,979

Liabilities                                                   
Current portion of long                                       
 term obligations                          19,659       35,639
Long term obligations                       8,209      104,694

Revenue                                                       
Royalty fees                                6,095       13,436
Other income                                4,350        7,350

Expenses                                                      
General and administrative                 17,441       13,928

THE QUIZNO'S CORPORATION                
MANAGEMENT'S   DISCUSSION   AND  ANALYSIS   OF   FINANCIAL        
CONDITION AND RESULTS OF OPERATIONS                 

Overview                                                                        

The   Company's   primary  business,  and  the   focus   of   its               
organizational  structure, continues to be  franchising  QUIZNO'S               
restaurants.  As a franchisor, revenue is derived from; (1)  area               
director  marketing  fees, (2) initial franchise  fees,  and  (3)               
royalties  paid  by franchisees.  Area director fees  occur  only               
once for each exclusive area sold.  Although the Company believes               
there  are a substantial number of markets remaining to be  sold,               
eventually  such fees are expected to decline as  the  number  of               
available remaining markets decline.  Initial franchise fees  are               
one time fees paid upon the sale of a franchise and vary directly               
with  the  number of franchises the Company can  sell  and  open.               
Royalties,  on  the other hand, are ongoing fees  paid  by  every               
franchised  restaurant  and  will  increase  as  the  number   of               
franchised  restaurants  increase.   Each  of  these  sources  of               
revenue contributes to the profitability of the Company, but  the               
relative  contribution of each source will vary  as  the  Company               
matures.   The  Company expects that over time initial  franchise               
fees and royalties will generate proportionally more revenue than               
area director marketing fees.                                                   

The  following chart reflects the Company's growth  in  terms  of               
units, franchise sales, and systemwide sales.                                   

                                                                · Download Table

                                                First Quarter     
                                              1996   1995         
                                                                  
Restaurants open, beginning                    105             66 
New restaurants opened                          13              6 
Restaurants closed                             (2)              - 
Restaurants open, end                          116             72 

New franchises sold                             24              9 

Initial franchise fees collected          $425,000       $160,000 
Systemwide sales                      $7.2 million   $5.6 million 
Same store sales (2, 3)                   down 8.9%       down .7%
Average unit volume for                                           
 the prior calendar year (1, 3)           $321,000       $363,000 

THE QUIZNO'S CORPORATION                
MANAGEMENT'S   DISCUSSION  AND  ANALYSIS   OF   FINANCIAL       
CONDITION AND RESULTS OF OPERATIONS (continued)               

(1) In 1994, the Quizno's restaurant was significantly redesigned               
to  reduce initial costs, reduce breakeven sales levels,  and  to               
fit  the  units  in  spaces  50% to 60% smaller  than  previously               
required.   The  Company expected reduced sales at these  smaller               
locations, but with a corresponding reduction in operating costs,               
including rent, labor and utilities.  Thus, although volumes  are               
lower,   the   breakeven  point  is  also  lower,  resulting   in               
approximately  the same return on sales and a  higher  return  on               
investment for such locations.                                                  
(2)  Same  store  sales is based on 64 stores.  41  of  these  64               
stores are located in Colorado, the Company's largest market  for               
Quizno's  restaurants.  In keeping with a recent industry  trend,               
many  QSR  chains  are  experiencing reduced  same  store  sales.               
Quizno's decrease is attributable, in large part to the fact that               
included  in  the  mix  are the Company's  top-volume  stores  in               
Colorado which are approaching their maturity after several years               
of  double  digit  growth.  The other factor  that  impacted  the               
Company's decrease is the fact that some new market stores, which               
are  not  yet operating in markets built out to a critical  mass,               
have  come  into the mix.  In response, the Company has  replaced               
the  head  of  its  marketing department  with  a  person  having               
substantial  experience  and credentials  in  the  quick  service               
restaurant  industry, committed to contribute up to  an  addition               
$360,000  to retail advertising in 1996, and, beginning in  March               
of  1996,  offered  a value priced meal in many  of  its  markets               
backed by the largest media advertising campaign in the Company's               
history.                                                                        

(3)  Because  the  Company  is and will  continue  to  be  in  an               
aggressive  growth mode for the next few years, it is anticipated               
that  same store sales will fluctuate as we track units operating               
in   evolving  market  mixes.   The  Company  will  continue   to               
concentrate on its overall rapid growth as a primary goal and  to               
provide interpretation of same store sales from year to year.                   
Results of Operations                                                           

Comparison  of the First  Quarter of 1996 with the First  Quarter               
of 1995                                                                         

Total  revenue  increased 20% in the first  quarter  of  1996  to               
$1,565,343 from $1,302,276 for the same quarter last year.                      
Royalty  fees  increased  52% in the first  quarter  of  1996  to               
$318,935  from  $209,576 in the same quarter last year.   Royalty               
fees  are  a  percentage of each franchisee's sales paid  to  the               
company  weekly  or monthly and will increase as  new  franchises               
open,  sales  increase,  and  as the average  royalty  percentage               
increases.  Company owned stores do not pay royalties.  At  March               
31,  1996  there were 108 franchises open as compared  to  63  at               
March  31, 1995.  The royalty fee is between 4% and 6%, depending               
on  when  the  franchise  was  purchased.   The  Company  has  no               
immediate plans to further increase the royalty percent.                        

THE QUIZNO'S CORPORATION                
MANAGEMENT'S   DISCUSSION  AND  ANALYSIS   OF   FINANCIAL       
CONDITION AND RESULTS OF OPERATIONS (continued)               

Initial  franchise fees increased 240% in the  first  quarter  of               
1996  to  $255,000  from $75,000 in the same quarter  last  year.               
Initial  franchise fees are one time fees paid by franchisees  at               
the  time the franchise is sold, and are not recognized as income               
until  the  period  in  which  all of the  Company's  obligations               
relating  to  the  sale have been substantially performed,  which               
generally occurs when the franchise opens.  In the first  quarter               
of  1996,  the  Company opened 13 franchises  as  compared  to  6               
franchises  opened in the first quarter of 1995.   The  Company's               
initial  franchise fee has been $20,000 since November  1,  1994.               
Some  of  the  franchises opened in the  first  quarter  of  1996               
purchased  the  franchise before November 1,  1994  and  paid  an               
initial franchise fee less than $20,000.  Beginning in 1996,  the               
Company  will sell an existing franchisee a second franchise  for               
$15,000,  and a third for $10,000.  For franchises to be operated               
in  non-traditional kiosk type locations with  another  business,               
the  initial franchise fee is $10,000 for the first,  $7,500  for               
the second, and $5,000 for additional franchises.                               

For a limited period of time in 1996, estimated to begin June  1,               
1996  and continue through August 15, 1996, the Company will sell               
to  approved  franchisees  one  additional  franchise  for  every               
currently  effective franchise agreement for an initial franchise               
fee  of  $1,000.  Such franchises must be opened by December  31,               
1996.  If the purchaser does not have a franchise currently open,               
the  first  franchise must be open by December 31, 1996  and  the               
second franchise, purchased under this discount program, must  be               
opened by December 31, 1997.                                                    

Area  director marketing fees increased 38% in the first  quarter               
of  1996 to $250,488 from $180,895.  Area director marketing fees               
are  one  time  fees paid to the Company for the  right  to  sell               
franchises in a designated, non-exclusive, geographical area. The               
fee  is  $.03 per person in the designated area, plus a  training               
fee  of  $10,000.  The population based portion  of  the  fee  is               
deemed  fully  earned  by  the Company  when  the  area  director               
marketing agreement is signed and is recognized as income in that               
period.  In the first quarter of 1996 the company sold four  area               
directorships as compared to two area directorships sold  in  the               
first  quarter  of 1995.  At March 31, 1996, the  Company  had  a               
total  of  49  area  directors  who owned  areas  encompassing  a               
population  base equal to approximately 45% of the population  of               
the United States.                                                              

THE QUIZNO'S CORPORATION                
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL               
CONDITION AND RESULTS OF OPERATIONS (continued)               

In  1995  the Company began offering long term financing to  area               
director  candidates for up to 50% of the area director marketing               
fee.   The amount financed is required to be paid to the  Company               
in installments over five years ranging from 11% to 15% interest.               
The  promissory notes are personally signed by the area  director               
and  secured  by  collateral unrelated to the area  directorship,               
usually  a second mortgage in the area director's home.   Of  the               
four  area  directorships sold in the first quarter of 1996,  one               
used this financing for $22,500.  A portion, $156,486 as of March               
31,  1996,  of  the area director marketing fees  for  the  first               
quarter  of  1996,  were financed for terms of  approximately  30               
days.                                                                           

Sales  by  Company  owned stores decreased by  6%  in  the  first               
quarter of 1996 to $627,992 from $667,272 in the first quarter of               
1995.   In  1996, the Company operated seven stores for the  full               
three  months (the eighth store is located in a baseball  stadium               
and  did  not  re-open until April).  In the first  quarter  last               
year,  the Company also operated seven stores.  During the  first               
quarter  of 1996 the Company earned a profit of $9,567 at Company               
stores  compared  to a loss of $34,567 in the same  quarter  last               
year.    Management  does  not  expect  to  acquire  or  sell   a               
significant number of Company stores in 1996.                                   

The net loss from stores held for resale was $13,583 in the first               
quarter  of  1996.  The 1996 loss is attributable  to  one  store               
taken  over during the quarter from a franchisee and operated  by               
the  Company until it was resold to a new franchisee on March 31,               
1996.                                                                           

Sales  and royalty commissions expense increased 405% to $133,726               
in the first quarter of 1996 from $26,477 in the first quarter of               
1995.   Sales and royalty commissions represent amounts  paid  to               
the  area  directors of the Company under the new  area  director               
program implemented in March of 1995.  Since this program was not               
implemented  until  the end of the first  quarter  of  1995,  the               
related  expenses  for that quarter were small.   Area  directors               
receive  a sales commission equal to 50% of the initial franchise               
fees  received by the Company for franchises sold and  opened  in               
the  area directors territory.  Area directors also are paid  40%               
of  the royalties received by the Company from franchises open in               
the  area  directors territory.  In exchange for these  payments,               
the  area  director  is required to market and  sell  franchises,               
provide  location selection assistance, provide  on-site  opening               
assistance  to  new  franchisees,  and  perform  monthly  quality               
control  reviews  at each franchise open in the  area  director's               
territory.   Sales and royalty commission expense is expected  to               
continue  to  increase  in direct proportion  to  the  number  of               
franchise openings and the increase in royalty fee revenue.                     

THE QUIZNO'S CORPORATION                
MANAGEMENT'S   DISCUSSION  AND  ANALYSIS   OF   FINANCIAL       
CONDITION AND RESULTS OF OPERATIONS (continued)               

Franchise advertising and promotion expenses increased to $88,573               
in  the first quarter of 1996 from $7,451 in the first quarter of               
1995.   The  increase  reflects the Company's  commitment  to  an               
aggressive  and  rapid  franchise sales and development  program,               
which includes consistent and regular national advertising of the               
Company's franchise opportunity combined with regularly scheduled               
orientation  and discovery days for franchise and  area  director               
candidates.                                                                     

General and administrative expenses increased 36% to $738,267 for               
the  first quarter of 1996 from $542,303 in the same quarter last               
year.   General and administrative expenses include  all  of  the               
operating  expenses  of the Company.  The  Company  believes  its               
general  and  administrative expenses are adequate  and  are  not               
excessive in relation to the size of the Company.                               

Loss  on  sale of Company stores was $60,079 in the first quarter               
of  1996.  The loss is primarily related to a franchised store in               
Missouri that was taken over by the Company from a franchisee and               
sold  to a new franchisee, all within the first quarter of  1996.               
In addition, the Company incurred costs related to the sale of  a               
Company owned store in Michigan sold in the first quarter of 1996               
that  were  over  and above the amount reserved at  December  31,               
1995.  There were no Company stores sold in the first quarter  of               
1995.                                                                           

LIQUIDITY AND CAPITAL RESOURCES                                                 

Net  cash  used by operating activities in the first  quarter  of               
1996  was  $356,089 compared to cash used in operating activities               
of  $103,807 in the same quarter last year.  Of the $356,089 used               
in   operations  in  the  first  quarter  of  1996,  $178,986  is               
attributable to promissory notes accepted for area director fees,               
of which $156,486 was paid within the five weeks after the end of               
the quarter.                                                                    

Net  cash  used in investing activities in the first  quarter  of               
1996  was  $175,541 compared to cash used in investing activities               
of $106,846 in the first quarter of 1995.  Cash used by investing               
activities in the first quarter of 1996 was primarily related  to               
the  acceptance of a promissory note for $115,000 related to  the               
sale of a store located in Missouri on March 31, 1996.                          

THE QUIZNO'S CORPORATION                
MANAGEMENT'S   DISCUSSION  AND  ANALYSIS   OF   FINANCIAL       
CONDITION AND RESULTS OF OPERATIONS (continued)               

Cash  used by financing activities in the first quarter  of  1996               
was  $114,779  compared to cash used by financing  activities  of               
$81,070  in  the  same quarter last year.  The amounts  for  both               
years represent primarily cash used for the reduction of debt and               
the payment of preferred stock dividends.                                       

The  Company  had  cash and cash equivalents  of  $1,038,013  and               
positive  working  capital of $992,239 at March  31,  1996.   The               
Company has a commitment to build and finance a turnkey store  in               
Florida  on  behalf of a franchisee, if requested.   The  Company               
currently  has no other commitments to build turnkey stores,  nor               
does  the Company any longer offer a turnkey development  program               
to its franchisees.                                                             

The Company has made commitments and has plans under way in which               
it  will provide up to approximately $360,000 in funds to be used               
for retail advertising by franchisee advertising cooperatives  in               
several  markets in 1996.  Of this amount, approximately $170,000               
will be in the form of interest bearing loans that will be repaid               
in  1997.   The balance of approximately $190,000 will be  grants               
that will be expensed by the Company in 1996.                                   

Other  than  the above, the Company's operations as a  franchisor               
are  not capital intensive.  The Company has been able to finance               
its operations and growth, excluding company owned stores,                      
through   initial  franchise  fees,  area  director   fees,   and               
royalties.                                                                      

The  Company does not expect seasonality to effect its operations               
in   a   materially  adverse  manner.   However,  the   Company's               
restaurant sales, and therefore royalties, during the  months  of               
November through February are generally lower due to the location               
of most of its restaurants.                                                     

THE QUIZNO'S CORPORATION                
Commission File Number:  000-23174                
Quarter Ended March 31, 1996                
Form 10-QSB                 
PART II  OTHER INFORMATION                

Item     1.   Legal Proceedings          None.                                  

Item     2.   Changes in Securities      None.                                  

Item     3.   Defaults Upon Senior Securities          None.                    

Item     4.   Submission of Matters to a Vote of Security Holders   None.       

Item     5.   Other Information         None.                                   

Item     6.   Exhibits and Reports on Form 8-K                                  
(a)  Exhibits Required by Item 601 of Regulation S-B No     
exhibits are included with this report.           
(b)  Reports on Form 8-K                                    
No  reports  on  Form 8-K were  filed  during  the
quarter for which this report is filed.           

THE QUIZNO'S CORPORATION Commission File Number:  000-23174                 
Quarter Ended March 31, 1996 Form 10-QSB                

SIGNATURES                

Pursuant  to the requirements of the Securities and Exchange  Act               
of  1934, the registrant has duly caused this report to be signed               
on its behalf by the undersigned, thereunto duly authorized.                    

THE QUIZNO'S CORPORATION                                                        

By: Original signed by John L. Gallivan John L. Gallivan                        
Chief Financial Officer                                               
(Principal Financial and Accounting Officer)                          

Denver, Colorado                                                                
May 14, 1996                                                                    

Dates Referenced Herein   and   Documents Incorporated By Reference

This 10QSB Filing		Date		Other Filings
		11/1/94
		3/31/95
		12/31/95
		3/29/96
For The Period Ended		3/31/96		10QSB/A
		5/10/96
		5/14/96
Filed On / Filed As Of		5/15/96
		6/1/96
		8/15/96
		12/31/96		10KSB, DEF 14A
		12/31/97		10KSB, 10KSB/A, 8-K, 8-K/A
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