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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Very interesting. If some do fail, why? It’s probably either location or just plain bad franchisee operator.
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What a bunch of garbage! I owned a Jimmy Johns franchise and the FACTS ARE that most stores do not even comeclose to 800K per year, the franchise consultant visits are biased and inconsistent, and there is nothing FUN about the JJ system. You must further look into the ‘turnover rate” of Jimmy johns stores. Sure, only one or two might have closed down, but, how many have sold because people were tired of the B.S.? No wonder I heard that a suit is being filed against JJ’s. Isn’t there already one started in Illinois? I expect a big one to follow. If Jimmy johns is so fantastic and fun, then why can’t oweners discuss prices, sales and marketing with each other? It’s forbidden, you know. In my opinion, this private equity firm bought themselves a Class Action lawsuit waiting to happen. That’s my opinion. C’mon writer, tell us the true sales of Jimmy Johns and get off of the 10 store average of corporate owned stores from period end 1995. Truth….you can’t handle the truth. But, if you can, you might find most stores actually do only reach the breakeven mark. Having fun yet? By the way, my store was about #10 in the country in sales and I couldn’t stand a minute of it!
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Is there a franchisee association of any kind?
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Kenny,
Why did you leave the JJ system? What do you mean you aren’t allowed to talk to each other? Why is this forbidden and how to they monitor it? What is the JJ’s marketing and sales strategy? I hear a lot of radio, a little TV, but not much else.
Thanks,
Franz
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Can you please provide some more details ? I was seriously looking at JJ for Houston, Texas. They have one store here and 4 more coming up. What scared me is that they do not want to give out a UFOC till i go meet them.
What nonsense ?
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What are the average annual sales of a Jimmy John’s store?
Average 2005 annual sales at 10 of the corporate-owned units were $922,381. You are welcome to contact existing franchisees to find out what their sales are. Most franchisees are willing to discuss such information with you once it is determined that you are serious about investing in a Jimmy John’s franchise. *Figures reflect averages for (10) affiliate-owned stores that were open 5 years or more for the period of 12-29-04 through 12-27-05 as published in our Uniform Franchise Offering Circular. Of these 10 stores 3 (30%) had higher gross sales, 7 (70%) had higher food and paper costs, and 7 (70%)higher net profit during the reported period. The above figures are actual. However, the FTC requires us to include the following statement in this advertisement - Caution: The figures are only estimates. There is no assurance that you will do as well. If you rely on our figures, you must accept the risk of not doing as well. This offering is made by prospectus only.
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You can fund UFOC’s here http://www.ufocs.com/
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I am currently tying to decide between Jimmy John’s or Auntie Anne’s franchises, any input/advise would be appreciated!
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I personally have only heard good things about Jimmy John’s. I would suggest inquiring for more information here: http://www.americasbestfranchises.com/Jimmy-Johns-Sandwich-Franchise
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Do either of these franchises disclose “earnings” to new buyers? Obviously, you should go with the franchise that would be most rewarding in the matter of earnings –profits, etc… for your contribution of labor and capital in a long-term contract.
Since franchisors don’t have to disclose “earnings” or UNIT PERFORMANCE STATISTICS to you in the UFOC/FDD, you will have to try to find out on your own. The Item 20 references are not really a scientific way of finding out because these people are not going to open their books to you for a review, Why would they or why should they? Anything a franchisee reference tells you, either positive or negative, will have no legal significance in the event you buy the franchise and it is not successful. Unfortunately, under disclosure regime, it is against the law for franchisors to make claims of the success of the franchise to new buyers outside of Item 19 of the UFOC and all franchise agreements require that you acknowledge you are buying the franchise at 100% risk of failure.
You could try writing to the Corporate Franchisor and ask them if they have some unit performance statistics that would give you some idea of the possible profits and some idea of how many first owners of their franchise have been successful. You might investigate to see if either of these franchises have discounted restaurants for sale. Remember that the Quick Food Service Market is pretty well saturated and be very careful.
If you have already made up your mind that you are going to buy one or the other of these two franchises, you might do a $1,000 NEGATIVE Consult with attorney Richard Solomon of Franchise Remedies of Houston, Texas. This might be the best $1,000 you have ever spent.
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