Quiznos, the sandwich restaurant chain, is said to be near a bankruptcy filing.
The Wall Street Journal said the company has been in talks with creditors about a plan to restructure its $570 million in debt, although a deal has not yet been worked out.
The Denver-based toasted sandwich chain its peak in 2006 had over 5,000 franchises in the U.S. Now it is reportedly down to about 1,200 or less.
Declining sales, as well as growing competition from Subway, Blimpie, Schlotzsky's, Jimmy John's and other sandwich chains, have also eaten away at Quiznos' bottom line.
A lawsuit, filed last year by a group of store owners, accused Quiznos of devising "a way to steal hundreds of millions of dollars from its store owners each year by creating pass-through companies, such as American Food Distributors."
That plan, the lawsuit continued, allowed Quiznos "to add significant hidden mark-ups to the food, paper and other supplies that franchise owners were contractually obligated to buy from Quiznos, marketed as the 'Mandated Essential Goods'."
Cheating franchisees is not a formula for success but what else would one expect with a New York hedge fund as the majority owner?