Jimmy John Liautaud’s father gave him two choices for what to do with his life – either join the military or start a business. He chose to go the business route, accepting a $25,000 loan from his father to get started, with Jimmy John owning 52% of the business and his father 48%.
He first thought he would launch a hot dog business, but the prohibitive costs of doing so made him switch to a sandwich shop instead. He rented out an old garage for $200/month and outfitted it with what little used equipment he could afford – a refrigerator, chest freezer, meat slicer and oven.
As he practiced and perfected his sandwich recipes, he realized that having Eastern Illinois University nearby was his ticket to success, so he catered to the college crowd and developed his signature irreverent approach to branding.
Below you’ll find 14 must-read recent news stories about the Jimmy John’s Franchise:
1. Freaky Growth
There are currently 1,954 Jimmy John’s stores open around the country, and only 32 of those are company-owned (Entrepreneur). On average, 250 new stores have been opened every year since 2010. This year the company expects to see another 300 sites added to the list. As the Franchise Times put it, “74% revenue growth and 38% unit growth in the past three years is remarkable for a mature brand reaching $2 billion in systemwide sales” (Franchise Times).
2. Accused of Wage Theft
Two former employees of Jimmy John’s have brought a lawsuit against the sandwich chain, accusing corporate headquarters of setting such low payroll budgets for franchisees that they have no choice but to coerce workers into working off the clock to keep labor costs low and especially avoid overtime laws. According to the plaintiffs, part of the problem is that Jimmy John’s policies provide franchise managers bonuses based on hitting unreasonably low labor cost targets. As a result, managers will clock-out workers before they’re finished with required tasks. What can they do if they want to keep the job except finish the work? But they’re not being paid for it, the plaintiffs claim (Huffington Post). (Editor’s note: Jimmy John’s franchises are independently-owned businesses and franchisees are typically responsible for setting their own employment policies.)
3. Untapped Geographies
There isn’t a single Jimmy John’s in Maine, New Hampshire, Vermont, Massachusetts or Connecticut. Jimmy John’s has a strong brand image and appeal to college students, and there certainly are plenty of college towns in New England (The News-Gazette), so it’s probably only a matter of time before they start popping up. There is at least one in Providence, Rhode Island, but the rest of the New England states are wide open opportunities for selecting premium locations.
4. Data Breaches
Jimmy John’s has joined the growing ranks of major retailers such as Target, Neiman Marcus, Michaels, White Lodging, and P.F. Chang’s (just to name a few). Now it’s consumer credit cards that were used at Jimmy John’s that are showing fraudulent charges. The franchise is currently cooperating with the authorities who are investigating the problem. The crime committed in all these cases is called “card-present” fraud in which the fraudster manages to make counterfeit cards, possibly from compromised software at payment terminals. When a new Jimmy John’s franchise is being set up, it is strongly recommended that it use the PDQ QSR point-of-sale solution from Signature Systems (Krebs on Security).
5. Movin’ On Up
The 2014 Franchise 500 list compiled by Entrepreneur magazine has Jimmy John’s in the #5 position for overall strength, up from #12 in 2013 (Entrepreneur). Jimmy John’s is also in the #8 slot on the magazine’s 2014 list of the 100 fastest-growing franchises, the same spot it occupied last year as well. That was a move up 3 spots from its 2012 ranking of #11 on the fast-growth list (The News-Gazette).
6. Sustainability at Jimmy John’s
The Jimmy John’s website is as simple as their mission, and it’s interesting to see that one of the five main links at the top of the front page is sustainability. Visiting the page shows that Jimmy John’s thinks of itself as eco-friendly. It divides its sustainability efforts between highlighting its impact on local economies by adding jobs and employing local contractors in setting up new stores, and then also highlighting how “green” their supply vendors are. Absent from these materials are what Jimmy John’s specifically does itself to be responsible, especially in terms of treating its workers in a just and equitable way (Jimmy John’s).
7. Recent Attempts to Unionize
Workers at a Jimmy John’s in Baltimore, MD, have independently created the IWW Jimmy John’s Workers Union, and they want Jimmy John’s to pay attention to them. Such efforts to unionize fast food workers would normally be scoffed at, but with the recent hue and cry of fast food workers everywhere for better wages, it may not be easily dismissed. The specific complaints are both for better wages and paid sick days, the latter of which apparently aren’t allowed (Libcom.org).
It wouldn’t be the first time that Jimmy John’s workers have tried to unionize. In 2011, ten Jimmy John’s stores were involved in an Industrial Workers of the World attempt to unionize fast-food workers. The union narrowly lost the vote, but six workers involved in the campaign claimed they were then fired for their activities, and a judge agreed (The Huffington Post).
8. Ranked #3 for Customer Loyalty
As of February 2014, Jimmy John’s achieved a Composite Loyalty Score of 54% in the sandwich shop sector, edging ahead of Subway who came in at 46% but trailing behind Panera Bread at 62%. The number one slot, surprisingly, went to Firehouse Subs at 68% (Statista).
Jimmy John’s got its start in a college town (Charleston, IL, with Eastern Illinois University), and the model that Liautaud perfected over 10 years prior to franchising definitely works well in that environment. Apparently all those college students keep going to Jimmy John’s even after they graduate.
9. Freaky Fast Delivery Linked to Pedestrian’s Death
The Jimmy John’s motto of “Subs So Fast You’ll Freak!” applies not just to assembling the sandwiches in the store, but also to their delivery into the hands of hungry customers. There are those, however, who claim that creating an environment that encourages “freaky fast” delivery puts everyone at increased risk for terrible accidents. It’s not the first such incident involving Jimmy John’s drivers, and it’s a problem facing all chains offering delivery, like Domino’s with its 30-minute delivery guarantee (The West Virginia Record).
10. 2014 NASCAR Sponsorships
Jimmy John’s is once again sponsoring NASCAR driver Kevin Harvick for 12 of his races. This is a long-standing sponsoring relationship that continues to deliver plenty of mutual benefits to both parties (NASCAR.com). In addition, Jimmy John’s will be the primary sponsor of the precursor for the first race in the Chase for the NASCAR Sprint Cup at Chicagoland Speedway, with the race being called The Jimmy John’s Freaky Fast 300 Powered by Coca-Cola (Chicagoland Speedway).
11. E. coli Breakouts Linked to Sprouts
Jimmy John’s has been plagued with E. coli breakouts linked to its sandwiches due to the raw clover sprouts they use. The latest outbreak involved eight confirmed and two probable cases of E. coli illnesses in the states of Washington and Idaho. Sprouts were eaten in sandwiches at several food establishments, including Jimmy John’s. Some of the victims were hospitalized, but no deaths have occurred (KiroTV.com).
So far, this most recent outbreak is not as serious as the one in late 2011 and early 2012 that saw 29 customers get sick in 11 different states, again from raw sprouts (Food Poisoning Bulletin).
The worst outbreak of all was when Jimmy John’s was using alfalfa sprouts, resulting in the 2010-2011 sickening of more than 140 people, which was itself their third outbreak in those days (barfblog).
It’s also interesting to note that back in 2012, the chain said it was dropping sprouts permanently from its menu due to all the bad press (Food Safety News), but two years later the sprouts are back, and apparently so are the E. coli outbreaks (The State News).
12. Exemplary Branding
What’s driving Jimmy John’s recent explosive growth and success? A strong case can be made for the critical role of branding. The Jimmy John’s brand is sweeping the nation because it’s quirky and irreverent, and appeals strongly to a wide range of people, but particularly the college-age segment. Its approach to branding appears to be working very well (USSCO Speaks).
13. Delivery Area Limitations
There’s no doubt that Jimmy John’s delivers on its promise of “freaky fast” delivery, but there are some who complain that this is achieved by unreasonably limiting how far the chain will drive to deliver sandwiches. Of course, this is most frustrating for those who find themselves just outside the seemingly arbitrary boundaries that range from just over to well under two miles (Pissed Consumer).
14. $1 Million Donation to Military Charity
On September 13, 2014, during the Jimmy John’s Freaky Fast 300 auto race at the Chicagoland Speedway, the company will present a $1 million donation to the Folds of Honor Foundation, a charity for military families based in Owasso, Oklahoma. At the event, Jimmy John’s and fans will watch their sponsored NASCAR driver, Kevin Harvick, who will be driving his Freaky Fast No. 5 co-branded with both Jimmy John’s and the Folds of Honor Foundation (Tulsa World).
The Franchise Chatter News Roundup is a series that gives you the most up-to-date news about specific franchises. When considering any franchise opportunity, it’s important to know all the latest news about it. In the case of the Jimmy John’s franchise, while the 14 news stories mentioned above run the gamut from positive to negative, they’re all news you can use.