In this FDD Talk 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 2020 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 2020 FDD
- Section IV – Number of franchised and company-owned Jimmy John’s outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD
- Section V – Presentation and analysis of Jimmy John’s financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:
- 2019 average and median gross sales for the 2,675 Jimmy John’s Restaurants and (separately) for the 2,633 franchised Jimmy John’s Restaurants in operation during the entire 2019 fiscal year
- 2019 average, median, high, and low annual and monthly gross sales for the 34 affiliate-owned Jimmy John’s Restaurants open at least 5 years
- 2019 average, median, high, and low annual and monthly gross sales for the 8 affiliate-owned Jimmy John’s Restaurants open less than 5 years
- 2019 average, median, high, and low cost of goods sold, labor, and net profit (as a percentage of gross sales) for the 34 affiliate-owned Jimmy John’s Restaurants open at least 5 years
- 2019 average, median, high, and low cost of goods sold, labor, and net profit (as a percentage of gross sales) for the 8 affiliate-owned Jimmy John’s Restaurants open less than 5 years
- 2019 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
21 Things You Need to Know About the Jimmy John’s Franchise
Launches First-Ever Loyalty Program
1. In early December 2019, Jimmy John’s announced that its first-ever customer loyalty program, Freaky Fast Rewards, was available nationwide. For signing up, Jimmy John’s offered all new Freaky Fast Rewards members a free 8” sandwich after their first order.
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2. Jimmy John’s began testing Freaky Fast Rewards in March 2019 and had been rolling it out across the country on a limited basis. Leading up to the national rollout, more than 1.8 million members had already signed up for Freaky Fast Rewards. Members are now able to earn tasty rewards – like sandwiches, sides, drinks, and exclusive first-taste access to new products – on an ongoing basis.
3. John Shea, chief marketing officer of Jimmy John’s, said, “At Jimmy John’s, we have amazing customers, and we’re committed to rewarding them for their loyalty. Freaky Fast Rewards is a best-in-class program that makes earning rewards fast and easy.”
4. Freaky Fast Rewards leverages cutting-edge loyalty technology and was designed to ensure a frictionless customer experience from sign-up through earning, redemption, and payment. It features one-tap technology integrated into the store experience, so members can use Apple Pay or Google Pay to earn and pay with just one tap of their phones. Freaky Fast Rewards is also fully integrated into jimmyjohns.com and the Jimmy John’s mobile app, where it seamlessly allows members to track progress towards their next reward.
5. In just six months since the pilot launch, Jimmy John’s had returned value to its rewards members, including:
- 1,724,623 total rewards redeemed;
- 50,000 free Little John sandwiches to support October’s national product launch;
- 268,893 birthdays celebrated with a free sandwich;
- 24,881 sandwiches given away on 11/3, National Sandwich Day;
- 18,512 pickles given away on 11/14, National Pickle Day;
- 100,925 free sides earned on 12/2, Cyber Monday.
6. Shea added, “We’re just getting started and it’s already clear that Freaky Fast Rewards is providing value to our customers and improving the customer experience. To show our customers love, we’re giving them a free sandwich after their first order, just for signing up, and will continue to dream up sandwich-fueled rewards to surprise and delight our customers in the future.”
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Appoints New Chief Marketing Officer
7. In early March 2020, Jimmy John’s announced that Darin Dugan had been named chief marketing officer. In his new role, Dugan will oversee brand marketing and planning, menu and new product development, advertising and digital media, as well as Jimmy John’s loyalty and customer relationship management programs. As CMO, he will report directly to James North, brand president of Jimmy John’s.
8. North said, “Darin has proven he can do it all over the course of his remarkable career. His leadership, creativity, innovation, and singular focus on guest experience will help accelerate the growth of Jimmy John’s. I look forward to partnering with Darin and realize his bold new vision for the brand.”
9. Dugan previously served as vice president of marketing for Sonic Drive-In, also part of the Inspire Brands portfolio. At Sonic, Dugan led brand management, media, creative, as well as social and digital activations. He also worked closely with the Sonic product development team to bring new culinary and menu innovation to market. Before joining Sonic, Dugan held senior leadership positions at DineEquity-Applebee’s and spent over 15 years at Kraft Foods, where he led several brands such as Oscar Mayer and Lunchables.
10. Dugan added, “I’ve been an admirer of Jimmy John’s for a long time, especially its commitment to quality, customer service, and digital innovation. I look forward to joining this award-winning team and helping the brand reach its tremendous growth potential.”
Starts Delivering Bread to Customers
11. At end of March 2020, Jimmy John’s introduced Freaky Fresh Bread on Demand as a way to help out during the ongoing COVID-19 pandemic. Customers are now be able to purchase loaves of fresh-baked French bread at participating Jimmy John’s locations across the country for delivery or pickup, including curbside and drive-thru.
12. Jimmy John’s famous French bread is homemade and freshly baked all day, every day. There is currently no limit on the number of loaves per order, but Jimmy John’s is urging guests to please order what they need for their families so supplies are available to as many as possible.
13. Darin Dugan, chief marketing officer of Jimmy John’s, said, “Jimmy John’s wants to help our neighbors across the country by making it easier to get daily necessities like freshly-baked bread. Available across the country immediately, we will be offering Freaky Fresh Bread on Demand: freshly-baked bread delivered to our guests any way they want it – curbside pickup, drive-thru, or contactless delivery to their door.”
14. To have some fun while people are at home, Jimmy John’s is asking guests to post their homemade bread creations with hashtags #FreakyFreshBread and #MadeWithJJBread.
15. Jimmy John’s was founded in 1983 by Jimmy John Liautaud in Charleston, Illinois. Liautaud, who didn’t really do that well in school, was told by his father that he either had to join the military or start a business. After choosing the latter, Liautaud’s father gave him a $25,000 loan to start a hot dog business, but after some research, Liautaud realize that running a sandwich shop would be cheaper.
16. Despite not being in an ideal location, Jimmy John’s made a profit in its first year. This is because Liautaud delivered his sandwiches to the nearby dorms at Eastern Illinois University and handed out free samples to market Jimmy John’s.
17. In 1985, Liautaud had made enough money to buy out his father’s share in Jimmy John’s to become the sole owner. Over the next few years, Liautaud opened additional Jimmy John’s locations around Illinois.
18. At the end of the 1980s, Liautaud met Jamie Coulter, who would later become the CEO of Lone Star Steakhouse & Saloon. Coulter taught Liautaud how to effectively run multiple units and by 1994, Liautaud was ready to franchise the Jimmy John’s concept.
19. In 2002, Liautaud briefly paused franchising to give support for stores that were struggling. Franchising resumed a year later and by 2017, Jimmy John’s had grown to 3,000 locations. At that time, Liautaud said that Jimmy John’s had plans to expand to more than 5,000 locations.
20. In September 2016, Jimmy John’s announced that Roark Capital Group had agreed to acquire a majority stake in the company. Liautaud retained 35% ownership of the company as part of the deal. In September 2019, Inspire Brands announced that it was buying Jimmy John’s for an unspecified amount. The acquisition was completed on October 18. At the close of the deal, Liautaud stepped down as chairman of the company and transitioned to become an adviser to the brand.
Entrepreneur’s Franchise 500
21. Jimmy John’s ranked No. 23 on Entrepreneur’s 2020 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Jimmy John’s franchise costs, based on Item 7 of the company’s 2020 FDD.
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 2020 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 2,584
- Outlets at the End of the Year: 2,700
- Net Change: +116
- Outlets at the Start of the Year: 2,700
- Outlets at the End of the Year: 2,750
- Net Change: +50
- Outlets at the Start of the Year: 2,750
- Outlets at the End of the Year: 2,738
- Net Change: -12
- Outlets at the Start of the Year: 63
- Outlets at the End of the Year: 55
- Net Change: -8
- Outlets at the Start of the Year: 55
- Outlets at the End of the Year: 55
- Net Change: 0
- Outlets at the Start of the Year: 55
- Outlets at the End of the Year: 52
- Net Change: -3
Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis
Gross Sales Information for Certain Franchised Jimmy John’s Restaurants and Gross Sales and Other Operating Information for Certain Affiliate-Owned Jimmy John’s Restaurants
- This financial performance representation contains:
- (1) actual average and median annual gross sales information for all Jimmy John’s Restaurants (both franchised and affiliate-owned), and separately for all franchised Jimmy John’s Restaurants, in operation in the United States during the entire 52-week period beginning January 2, 2019 and ending December 31, 2019 (Part 1);
- (2) information regarding the actual gross sales and certain other operating results of affiliate-owned and operated Jimmy John’s Restaurants that opened on or before January 2, 2019 (42 of 43 Restaurants total) (Part 2); and
- (3) actual partial operating financial statements for 2 affiliate-owned and operated Jimmy John’s Restaurants (Part 3).