30 year food franchise industry veteran tells you what you need to know before investing in a food franchise. Click here.
I’m constantly surprised by how people are finding my blog. I haven’t done any promotion yet. My sole focus right now is generating as much useful content as I can. Google search results have been my primary source of traffic.
I conducted a reader’s poll a few days back on favorite fast food franchises. To my surprise, a new reader found me by searching for “jimmy john’s cost”. And to think, I don’t even have a dedicated post for Jimmy John’s. I’ve got to do something to correct this.
I haven’t been to a Jimmy John’s location, but I’ve seen their ads in business magazines like Entrepreneur Magazine. I find their ads to be very hip and intriguing — no pictures, just a black and white typeface, with a vintage feel and very catchy copy. Little did I realize that this simplicity is a big part of their brand personality.
I must say I’m extremely impressed with their website. They disclosed so much information, including an average store’s revenue and profit potential (with a lot of legal disclaimers of course). I get a sense that they’re very confident about their product and their franchise opportunity.
So what are my thoughts? Let’s jump right in:
1. Focused Product Line
They are proud of their focused menu – no soups, salads, or sides – just great subs. You have a choice of 8″ subs on french bread, or giant club sandwiches with twice the filling on french or 7-grain bread. You have a choice of fillings and toppings, but that is pretty much the extent of the menu (save for the chocolate chip cookie and chips). This makes food preparation much simpler than other fast food concepts.
2. They Deliver
What sets them apart from most other sandwich chains is that they deliver. I’m not really sure how I feel about this. On one hand, this increases the sales potential of the restaurant. But the added layer of delivery makes the operation a lot more complicated. They’re venturing into an area where the pizza business has dominated. With a product that requires a bit more care to deliver intact, I can see this being an additional source of headaches.
But then again, if the delivery business is responsible for much higher profits, I’m completely on board!
3. Initial Investment on the Higher End
The initial investment for a Jimmy John’s restaurant is more than Subway’s. The initial franchise fee for a Jimmy John’s is $35,000, compared to Subway’s $15,000. The total estimated initial investment for a Jimmy John’s ranges from $$305,500 to $460,500. Since a Subway can be opened at a non-traditional location, the initial investment can be as low as $92,000 and as high as $315,000+.
But Jimmy John’s ongoing royalty of 6% of gross sales is less than Subway’s 8%.
4. Extensive Training
The training program for Jimmy John’s is 7 weeks long: 3 weeks at the corporate training center in Champaign, IL, and 4 weeks working as a management apprentice at a nearby Jimmy John’s franchised location. In addition, the assistant manger receives a similar 3 week training at the corporate office in Champaign. Franchisees also receive on-going training and support.
5. Good Profit Potential
I commend Jimmy John’s for providing some information on a store’s potential profits right on their website. Most other franchisors don’t even disclose this information on their franchise disclosure statement.
The figures reported are the average results of 16 affiliate-owned stores that were at least 4 years old at the start of the reporting period. The results were for the year 2009.
This is a summary of what Jimmy John’s disclosed on their website (*for further details and disclaimers, please visit Jimmy John’s website: www.jimmyjohns.com).
Average gross sales reported was $1,172,013.
Average food and paper costs reported was 25.99%.
Average net profit from operations reported was $264,270.
I think these results are outstanding, especially considering that 2009 was at the peak of the recession. But always remember that a store’s success depends a lot on the location selected and the skills of the individual franchisee. Results will definitely vary. You can certainly make less, but if you are a hard working and savvy franchisee with a great location, you can make even more!
Click here to read my review of Subway.
Are you a current franchisee of Jimmy John’s? Is your Jimmy John’s franchise profitable? Do you work for the Jimmy John’s franchise organization? Can you share anything about the profit potential of the Jimmy John’s franchise?