Franchise Costs: Detailed Estimates of Jimmy John’s Franchise Costs (2017 FDD)

This post was updated on May 31, 2017 to reflect information from Jimmy John’s 2017 FDD (Item 7).

Detailed Estimates of Jimmy John’s Franchise Costs Based on Item 7 (Estimated Initial Investment) of Jimmy John’s 2017 Franchise Disclosure Document

1.  Initial Franchise Fee:  $30,000 to $35,000

• Jimmy John’s standard initial franchise fee currently is $35,000.

• If you are a franchisee in good standing and buy a second or additional franchise, the initial franchise fee for that additional unit currently is $30,000.

2.  Real Estate/Rent (1 month):  $2,500 to $8,000

• A Jimmy John’s Restaurant occupies approximately 1,000 to 1,800 square feet of space.

• Jimmy John’s Restaurants can be located in strip shopping centers, shopping malls, free-standing units, and other venues in downtown commercial areas and in suburban areas.

• Jimmy John’s anticipates you will rent the Restaurant’s premises. It is possible, however, that you might choose to buy real estate on which a building suitable for the Restaurant already is constructed or could be constructed. Because numerous variables affect the value of a particular piece of real estate, this initial investment table does not reflect the potential purchase cost of real estate or the costs of constructing a building suitable for the Restaurant.

3.  Security Deposit:  $2,500 to $8,000

• This estimate contemplates a security deposit equal to one month’s rent.

4.  Leasehold Improvement Costs:  $100,000 to $200,000

• Leasehold improvement costs — including floor covering, wall treatments, counters, ceilings, painting, window coverings, electrical, carpentry, and similar work, and contractor’s fees — depend on the site’s condition, location, and size; the demand for the site among prospective lessees; the site’s previous use; the build-out required to conform the site for your Restaurant; and any construction or other allowances the landlord grants.

• The lower figure assumes the landlord bears many leasehold improvement costs (which it then might include in the rent).

5.  Furniture, Fixtures, Signage, and Equipment (including Computer/Point-of-Sale System):  $107,500 to $166,000

• This includes refrigerators, freezers, ovens, point-of-sale system, computer, stereo, telephones, signage, and (if directed) a video security system.

• The investment amount may increase depending on whether or not the location offers drive-thru, and the amount of interior seating.

6.  Architect:  $5,000 to $10,000

7.  Office Equipment:  $2,500

• This includes a desk, chair, and safe.

8.  Utility Deposits:  $1,000 to $2,000

• You might be required to pay deposits for telephone service and gas, electric, and other utilities.

9.  Opening Inventory and Supplies:  $6,000

• This includes food and beverage products, paper products, cleaning supplies, and printing and other supplies.

10.  Grand Opening Event:  $3,000 to $5,000

• Jimmy John’s does not require you to conduct a Restaurant “grand opening” marketing program, either before or after your Restaurant opens. However, if you choose to have this type of event, Jimmy John’s recommends you schedule it for 90 days to 120 days after the Restaurant opens and spend $3,000 to $5,000 for newspaper and radio advertising and promotional items.

11.  Training Expenses (out-of-pocket costs for up to 3 people):  $6,000 to $15,000

12.  Insurance:  $11,500 to $15,000

• You must obtain and maintain certain types and amounts of insurance. The estimate contemplates insurance premium costs for 1 year.

13.  Miscellaneous Expenses:  $2,000 to $10,000

• This estimates the funds needed for professional advisors (like an attorney and accountant) and other miscellaneous expenses not addressed in this table.

14.  Additional Funds – 3 Months:  $50,000 to $75,000

• This estimates the funds needed to cover your initial expenses for the first 3 months of operation (other than the items identified separately in the table).

• It includes payroll costs but not any owner’s draw or salary.

• However, this is only an estimate, and you might need additional working capital.

• This 3-month period is not intended, and should not be interpreted, to identify a point at which your Restaurant will break even. Jimmy John’s cannot guarantee when or if your Restaurant will break even.

• Jimmy John’s relied on its approximately 24 years of franchising, and its 34 years of operating, Jimmy John’s Restaurants to compile this Additional Funds estimate.

15.  Total Estimated Initial Investment (excluding real estate purchase costs):  $329,500 to $557,500

• Jimmy John’s does not offer financing directly or indirectly for any part of the initial investment.

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