In this FDD Talk 2017 post, you’ll learn the following:
- Section I – Background information on the Jimmy John’s franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Jimmy John’s franchise, based on Item 7 of the company’s 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Jimmy John’s franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Jimmy John’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average and median gross sales for the 2,348 Jimmy John’s Restaurants and (separately) for the 2,297 franchised Jimmy John’s Restaurants in operation during the entire 2016 fiscal year
- 2016 average, median, high, and low annual and monthly gross sales for the 35 affiliate-owned Jimmy John’s Restaurants open at least 5 years
- 2016 average, median, high, and low annual and monthly gross sales for the 16 affiliate-owned Jimmy John’s Restaurants open less than 5 years
- 2016 average, median, high, and low cost of goods sold, labor, and net profit (as a percentage of gross sales) for the 35 affiliate-owned Jimmy John’s Restaurants open at least 5 years
- 2016 average, median, high, and low cost of goods sold, labor, and net profit (as a percentage of gross sales) for the 16 affiliate-owned Jimmy John’s Restaurants open less than 5 years
- 2016 actual gross sales, promotional and employee freebies, net sales, cash accountability, cost of goods sold, labor and payroll taxes, gross profit, advertising, royalties, amortization of initial franchise fee, total operating expenses, and operating profit for 2 specific affiliate-owned Jimmy John’s Restaurants (1 in Illinois, the other in Michigan)
Section I – Background Information
14 Things You Need to Know About the Jimmy John’s Franchise
Sold Majority Stake to Private Equity Group
1. In early September 2016, Jimmy John’s announced that it had sold a majority stake in the company to Atlanta-based private equity group Roark Capital for an undisclosed amount.
2. According to a press release, Jimmy John’s management will remain the same with founder Jimmy John Liautaud continuing as chairman and the single-largest individual shareholder. James North will continue to lead day-to-day operations as Jimmy John’s CEO and President, while private equity firm Weston Presidio will exit the company after holding a minority stake for 10 years.
3. Jimmy John’s will join brands such as Anytime Fitness, Arby’s, Batteries Plus Bulbs, and CKE Restaurants (the parent company of Carl’s Jr. and Hardee’s) in Roark Capital’s portfolio.
Founder Jimmy John Liautaud named Dealmaker of the Year
4. Jimmy John Liautaud was named Franchise Times’ top Dealmaker of the Year in early March. The franchising industry publication said that Liautaud topped this year’s list after Roark Capital became a majority investor in the sandwich store chain.
5. According to Franchise Times editor-in-chief Beth Ewen, “Our judges called the Jimmy John’s deal one of the best private equity deals of all time in the restaurant business.”
Bringing Back $1 Subs for Customer Appreciation Day
6. On May 2 from 4 p.m. to 8 p.m., Jimmy John’s held its second nationwide Customer Appreciation Day, with participating locations offering customers sandwiches for $1, plus applicable sales tax. The sandwiches included in the deal were eight-inch subs No. 1 to No. 6 (Pepe, Big John, Totally Tuna, Turkey Tom, Vito, and Vegetarian), the J.J.B.L.T., and Plain Slims.
7. The promotion was limited to one per person and the deal was offered in-store only; however, the company’s FAQ page shared a tip on how to get more than one sandwich: “If you would like more than one $1 sub, you can go through the line multiple times, at the store’s discretion.”
Sun Country Airlines to Start Offering Jimmy John’s Sandwiches on Flights
8. At the start of May, Sun Country Airlines, the third largest carrier at Minneapolis-St.Paul International Airport, announced that Jimmy John’s sandwiches will be available to passengers during domestic flights.
9. Sun Country is the first airline to offer Jimmy John’s sandwiches, which will be called Mini Jimmy’s and will cost $6. Jimmy John’s will join other popular brands such as Jack Links jerky and Angie’s Boomchickapop kettle corn on Sun Country’s menu.
10. The first Jimmy John’s was opened in 1983 by Jimmy John Liautaud in a garage in Charleston, Illinois after Liautaud’s father loaned him $25,000. The loan came with the condition that if Liautaud did not turn a profit in the first year, he would have to join the Army.
11. Liautaud was able to earn a $40,000 profit in Jimmy John’s first year due to his willingness to deliver sandwiches to the nearby dorms at Eastern Illinois University, as well as handing out free samples for marketing purposes.
12. By 1986, Liautaud had enough money to buy out his father from the company and become the sole owner of Jimmy John’s. Throughout the rest of the 80s and early 90s, Liautaud continued to open more Jimmy John’s locations and developed a prototype before beginning franchising in 1994.
13. As of March 2017, Jimmy John’s has 3,000 stores in the U.S. with plans for up to 5,000 stores and beyond in the coming years.
Entrepreneur’s Franchise 500
14. Jimmy John’s has ranked every year on Entrepreneur’s annual Franchise 500 list in the last decade. The sandwich chain’s highest rank was No. 1 in 2016, while its lowest rank was No. 61 in 2010. Jimmy John’s also ranked on Entrepreneur’s Fastest Growing Franchises list in 2008 at No. 29.
Section II – Estimated Costs
- Please click here for detailed estimates of Jimmy John’s franchise costs, based on Item 7 of the company’s 2017 FDD (updated).
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Jimmy John’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.