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Why Jimmy John’s Franchisees are Happy

Jimmy John’s (“JJ”) franchisees are happy because they make money and get decent support from the franchisor. The failure rate is very low, particulary in the past 5 years, if you follow the sytem. It is rumored that a single unit, on average, achieves $850,000 in annual sales, with breakeven reached usually with annual sales of $400,000-$420,000 (depending mainly on the lease). The latest numbers are over 500 restaurants in operation (20 company owned) with 1016 franchise agreements signed. A new JJ is opened every 36 hours as of January.

Most of the franchisees now are area developers, but sometimes single-units are sold. JJ has a well tuned but quirky fun system to make it ‘happen’. The operation manual is specific to every last detail, to how you put on your apron. The headquarters has rock music playing, Plasma TVs with Fox News on full time, and very casual but go-getter attitude. The founder recently sold a third of his business to a Weston Presidio, a famous private equity fund who funded Starbucks, Jet Blue, Wild Oats and Guitar Center, but founder Jimmy John Liautaud still has a 4-to-2 vote lead on the board.  Liautaud’s 29-year-old President is the 3rd largest shareholder.

On of JJ quirky but effective marketing approaches is an in-your-face attitude in the store and in their infrequent advertising.

A second unique aspect is JJ’s Franchise Consultants, who visit stores with supplies (tile glue, cleaners, mits, pans, etc.) to clean up and fix up shops, all while encouraging the owner. A third unique aspect is its use of more than a dozen guerilla marketkers who will visit one location and spend 4 days there. The first day is planning for the massive 3,000 sample distribution strategy over the next few days, the second day is giving out samples, the next two days is giving out more samples if possible and then helping the franchisee make sandwhiches. Orders usually increase by 60+% and strongly stay above pervious levels therafter.

Because JJ has strong roots in the college markets, delivery is a distinguishing factor of the franchise. Hey, if delivery works for pizza…

This isn’t a commercial, no one is paying or asking me to write this – it’s my unbiased opinion. I’d buy it!

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