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!
Similar Posts:
- Burger King tries home delivery
- New Curves Franchisee Association
- Why a Smoothie franchise failed; Rule of Thumb Sales
- Subway’s DeLuca loses battle with franchisees
- Unique pet franchises
Ryan is an attorney and valuation specialist residing in Chicago. He chronicles his thoughts and research on FranchisePundit.com. You may reach him by email ryanknoll@gmail.com or mobile telephone 312-715-8115.
Very interesting. If some do fail, why? It’s probably either location or just plain bad franchisee operator.
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!
I currently own 1 Jimmy John’s and have already started working on store 2 within 1 year of my first. If you know what your doing you can make real money out of each unit. (our ebitda is approx 160k) off of one store in a suburban area, so Kenny if your store was #10 in the nation in sales and you weren’t making bank you are obviously half a retard. P.S. Corp can be a pain in the ass, but if you run the business using their formula plus your own business /MGT knowledge it is a slam dunk.
Hi Brian, I am considering opening a Jimmy Johns store and Im trying to do as much research as I can before I meet with them in IL next week. I’ve never owned a franchise before so this is all new to me. Did you have an attorney look over the FDD before you signed? If so what was the attorneys general thoughts and is there any room for negotiating their contract? Whats your overall thoughts on owning a Jimmy Johns and how does that differ from what you anticipated initially? Any advice? Ive pretty much heard varying opinions as to wether or not its a good investment. Thanks for your help
I have been looking at a Jimmy John’s for some time with another guy. We are looking for another additional partner. Let me know if you are still interested in JJ’s.
I could send you our biz plan and additional details.
Mikepotter5@hotmail.com
Mike
We are interested in finding partners and would love to see your biz plan. Where are you located? Thanks!
Michael, I am interested to be part of your team. If that’s possible let me know with more details.
Did you find your additional partner? If not, let me know and I may be able to hook you with a few qualified people seeking something similar.
ryan, please contact me at jimmyjohnsusa@gmail.com
I’m a current GM and I’m looking to be a managing partner for JJ Development Company. I’m in the process of creating a business plan and looking for investors.
Thanks
TH
Kenny, it is up to the franchise owner how they want to set their prices. JimmyJohns gives a “recommended price” but it is the option of the owner how they want to set their prices. Just thought I should correct you on that. If your store was #10 in the country in sales, you would NOT have gotten rid of it.
i am looking to buy to own a jimmy jhons franchise? did you keep yours?
please i need and advice
Is there a franchisee association of any kind?
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
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 ?
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.
You can fund UFOC’s here http://www.ufocs.com/
I am currently tying to decide between Jimmy John’s or Auntie Anne’s franchises, any input/advise would be appreciated!
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
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.
Before you make any assumption or form any opinions make sure you research all your options. Jimmy John’s is the cousin of two other franchise systems that offer identical products, systems and menus. They are named Milio’s and Erbert and Gerberts. Both of them are based in Wisconsin but offer franchises nationally. Each of Jimmy John’s family competitors are worth looking into. Furthermore, they have a more supportive franchisee program and have a controlled growth philosophy unlike Jimmy John’s.
Obviously you are completley in the dark….Erberts..and Milios are all actually Jimmy John’s sandwiches with their “interesting” twists addind to disguise the truth! I should know, I was their when the “JJ” secrets were given to help a Pizza Hut manager (E&G) and a failing Hamburger Stand owner (Milios)
Ummmm… you’re an idiot
I am looking at owning a Jimmy John’s. When I called, JJ’s corporate gave me the chain-wide average gross sales. For 2007 that number was something like 694k.
Also, they will send you the FDD before meeting with them, they just prefer to give it to you at the meeting. I asked for it prior, and they sent it to me no problem.
Jimmy John’s is an amazing franchise system. I have worked closely with them and have heard extremely positive reviews. Many of the comments on this blog are extremely loaded from a biased perspective. Call the company and ask for the details, you will find that Jimmy John’s is very straight forward and to the point with everything, that is the way Jimmy and his father operate with everything they do.
I’ll tell you my point of view. I sold my JJ’s after about 1 year. Our best month, we sold 63k, paid about 7-8k in franchise fees, and made 17k in profit. But if our sales hit 45k, we MAYBE made 3k in profit. When you sample sandwiches like they recommend you do, sales go up, but so do your food costs. They benefit 100%, and you might benefit 5%. Then they came up with this financial statement they wanted the franchisees to fill out, giving your p&l in their specific format. My accountant wanted $250 a month for it. I never did it. When you have a problem, and ask for a solution, they don’t have one. When you come up with a solution yourself, they tell you to do something else instead. If I was the franchisor, I would do exactly what they do. But since I was the franchisee, I hated it. They also force you to use some self glorified company to purchase 95% of the kitchen equipment at inflated prices (they charge you 7k to store your equipment before its delivered). Then the owner of the supply company saves money, and goes himself to install it all. He doesn’t even have a drill. You should have seen it, my contractor was in stitches.
Would I do it again? Maybe.
I have a business next to a JJ, so I am biased…but here are the facts as I see them. They appear to have to maintain x number of employees every hour of the day. The college is in full swing about 36 weeks out of the year. The rest of the year business can be down over 50%. Poor JJ stays open late and has a full staff all year. Doing nothing. Is this corporate? During the school year at any time during lunch you can always find a seat, not too good when you have a huge overhead. They use mopeds for delivery, but I heard recently that they were having the employees pay for the use of the company moped, now the kids use their own car while the company moped sits idle.
If you are going to buy, go spend some money and stake one out for a few days. Get a counter and piece of paper and count their customers and deliveries. Count the number of employees. and the number of hours they are open Make sure you not only count customers during the peak but also during the off hours. Take into account the down time of the year for this type of business. Speak to other samll business owners in that area. And don’t fool yourself that where you are going to have your store it will be different.
Last, never, never believe what corporate tells you, numbers can be made to dance if you need them to.
The poor guys that opened on my block are in the hole about 300K and losing every week. A long lease can do that to you and a not so great product.
You have to buy the exact brand from the exact vendors at huge uppricing. To build out a 1200 sq foot space with no drive thru that came vanilla box is over $320,000. The pos system alone is $32,000…crazy. (They quote you around $24,000, but then by the time you buy wire, terminals, boxes, caller id software, have it installed, etc its $32000+.) Then you are also required to pay a mandatory $350/mo support for the pos, $200/mo for use of the online ordering system, gift card fees, 6% royalty, 4.5% national ad fee. Plus you have to go to Il for 3 weeks of training, then another 4 weeks of training somewhere else. Your motel, travel and meals are all on you. You put up $30,000 franchise fee. You are also required to have a min of 2 certified managers in your store, and to be certified they must go to Il for 3 weeks at a charge of $1000 training fee, plus travel, meals, motel. If that employee quits, oh well, send another one. It cost about $5000 per manager to send to training. And you are required to send to thier training. You cant train them yourself.
Then after 10 years you are required to gut your store and buy everything new for another $320,000.
You are not allowed to advertise, give out free anything (like pens with your name or address) or anything promotional except what they sell through thier printing company, which is also douple what you can buy anywhere else. ) You are not allowed to solve any problem or change any equipment. You are not allowed to post your hours or have an open sign. You are not allowed to brand anything or sell anything that didnt come through thier supplier. Your only allowed promotion is to give away samples (a sample is a sub that is cut in thirds, and wrapped.) This increases sales, of which 10.5% goes to corporate, but 100% of the food cost and the labor cost of the samples is on you. And giving away food is very very expensive. But since the food comes from JJ, they make money, but radio ads or cheaper/person or cheaper/ return is not allowed because you buying more food goes to thier bottom line.
Ask any new owner and they will tell the you the actual cost to get the door open in is over $400,000 for a space that is the min allowable size. If its a larger store with a drive thru, increase the cost accordingly. Remember, you have to tile the whole interior with thier tiles and thier contractor at huge cost.
I would strongly recommend that you talk to RECENT owners. Not just for JJ but for any franchise you are thinking about opening. Just google grand opening… and do a little research on your own. You will find my numbers are dead on cause I just went through it.
Hey brian, do you regret the move to invest in a JJ store? hows your store doing now and are you thinking of opening more?
sorry…Dan. I got your name mixed up with someone else
Why buy a franchise?
There are very good reasons to buy a franchise. I researched franchises for several industries for a long time, and concluded the followings.
1. Some franchises do work.
2. But many don’t.
3. Whether they do or don’t work, the franchisers usually make a lot of money, and you do not.
4. Why do franchise businesses have a higher rate of success? Because it is your money. If you have put in half a million, would you work hard? Not just that, you signed a binding contract to work hard and committed to marketing, royalty, fees, purchases, etc. Basically, you put your whole life savings on the line, plus your future.
5. Who should buy franchise businesses and what to buy? – the ideal franchisees are those who will work hard when pushed and managed, those who are willing to build up a brand for the franchiser using your own money. The most valuable assesst of a franchise is usually the brand name. You lease it, not purchase it. (remember, all the marketing dollars you put in help build a brand that belongs to the franchiser. when your contract is up (usually 10 years), you own nothing. They reserve the right to renew the contract, or raise fees) Would you put a lot of money to upgrade a house you rent?
6. Still, many franchisees do make money, because they work hard, invest with their own money, receive the right to use a brand name, and are willing to do whatever they are told to do. Statistically, some of them will make money. The ones who do not fit this profile will sell the store. Eventually, someone who do will fit the profil and become successful. So the franchisers will look good because the “established stores” have good sales numbers.
7. It is like sending a million foot soldiers to fight a war. Mostof the soldiers in the front will die. Some of the ones in the back will survive and get to go to the victory party.
8. Franchisees are the soldiers who pay for their own weapons, sign a contract to follow the orders, and sacrafice.
9. The most imporatnt thing – go work a franchisee for at least six months, or better, a year. If you do not think you can do this, forget about it. The franchiser will tell you that someone else is interested in the same territory – do not worry about that. Territory means “NOTHING”. When all territories are purchased, many franchisers simply start another comany with a different name but sell the same product. You are not allowed to compete with them; but they can. Their objective is maximum profit – for them, not you. As long as you are getting by, they will continue to setup new stores to expand and saturate the market.
I’m an employee at one of the Champaign stores {going to college at U of I}. As a corporate store, we get training classes, consisting of future (or current) GM’s and owners in every week. From what I’ve seen of the system, there’s high potential for success. Trainees come out of the 3 week boot camp very knowledgeable. I really feel like if someone is motivated, {this sounds cheesy, but from what I’ve seen it really does make a difference} likes the brand, and is willing to put forth an incredible effort during the opening push, and has a decent location they will be fine. The first few months are going to be super-hard, but I feel like that’s a given opening any store. The guerrilla marketers also go through the program to learn about the brand and know what goes in to opening a store. Basically: with a decent location and hard work you can make it happen.
Oh, I guess I should have labeled my post. Its:
The exact cost to open a new Jimmy Johns restaurant.
I opened a JJ’s over a year ago. I was told it would cost about 340K. It came in at 400k.
The store does ok. Corporate can be a bunch of pricks.
If you have a problem they have no answers.
They are very inconsistant with what they say.
They have business coaches, but are really compliant enforcement officers.
Before you buy one of these stores talk to someone who has opened a store in the last year to see what they think.
Steve how can i contact u to get more info?
By the way everything that Dan said above is 100 percent true!
I own a Jimmy John’s and I can not beleave some of the comments on this board from supposedly former franchisees.
The fact is most stores do anywhere from good to very good.
For Kenny who supposedly owned a store that did 800k either you are a idiot or could not handle the work load.
There is no lawsuit and owners can discuss things with each other. In the town I am in there is another store and I speak to that owner just about every week.
JJ’s has a very low turn over rate.
For the person that said that if their sales went to 45k they only made 3k in profit either they had very high rent or could not control their labor or cogs.
If anyone is seriously considering a JJ’s contact me at woodward2933@yahoo.com.
I just can’t stand this Jimmy John’s bashing!
As a current owner, I will say that you are definitely an idiot. I have never worked so hard for so little in my life. I made more money the first year out of college than what my store makes. An added “bonus” is that Jimmy, James, Tim and the rest of the ass-clowns in corporate are incompetent boobs. If the company was run by people who knew what they where doing, it would be a good opportunity, but the fact is, the brand is a joke. It is common knowledge that EVERYTHING that the brand is was stolen/copied from Potbelly.
This guy really isn’t as into as JJ as he makes it seem here. He has complained to me about corporate restrictions including his small delivery area. He delivers out of his area and has complained to me he doesn’t have the proper deliver area. He’s talked about opening another restaurant and said it won’t be a Jimmy John’s. He is calculating his food costs incorrectly. I don’t know how his store is making any money with only $500k is sales. I don’t even think he works at the store. I have called this store and they said he quit working around January. From his emails he’s sent me me and talking to the store I think he has checked out.
I’m replying because I was the one that posted the 45k sales, 3k profit. I wasn’t bashing JJ’s. The reality, is I was profitable since day 1. The problem, is I spent $486K to make a 6-10% return on investment? The cost to builkd out is way too high. They can easily shave off 10-20% from the buildout, by letting you buy your equipment locally, instead of Jimmy’s super best buddy you have to buy the equipment from. Then, you HAVE to sample to build up your sales. If you ever stop, your sales slowly drop in 5 to 10 days. SO…your food costs will be high. You labor will also be high because they expect you to staff at high levels, and deliver with no minimum (which I still think is a good idea, albeit an expensive one).
ALSO….keep in mind. Very few landlords will let you lease a good spot, because they will always prefer Subway’s, Panera, even Quizno’s, to lease their spot. If there is already a Subways in there, forget it. And you are also now competing for locations with Five Guys, because of the “better burger” craze.
Regardless, I enjoyed opening my Jimmy John’s. It was painful, it was fun, but still made a profit. I sold it, because I knew I could always open up another one. Bobby M. might have been busy, but he’s a great guy, and honest. I’m not sure about the others, but they could have been a bit smarter on the decisions they forced me to make. It was too much following their bad advice, but if I was the corporate office, I would likely force the same annoying things.
Besides….I know some JJ’s have closed down, but I’m sure ALOT more Quizno’s and others have shut down.
And in conclusion…what about the new POS system you have to buy? Word is that it’s about 30k, and you have to pay around $500 in software licensing, and maintenance fees. Pretty expensive, huh?
I have contacted Jimmy Johns twice about a franchise and was told they would call me back but they never did. I talked to Bobby he was supposed to call me back in a couple of days but never did. Then I called two weeks later left a message and three days later still have not received a call back. I’m looking to open a sandwich franchise, Jimmy Johns was my first choice now I’m looking at Lenny’s and Charley’s hope they don’t give me the same run around as Jimmy John’s. If Jimmy John’s treats their franchisee’s the way they treat their potential franchisee’s then I would stay away from them.
I own a Jimmy John’s and it is a nightmare. I am trying to sell mine, so far no takers. Corporate is comprised of a group of lazy, ignorant, incompetent people. In order to make a decent living, you need to own MANY units, and put yourself into massive debt. The profit margin in every store is razor thin and you are REQUIRED to overstaff to ridiculous levels. Anyone interested in buying a franchise, BEWARE ! Before you put your money down, talk to MANY owners. You will find that many of them will be willing to sell you their stores. What does that tell you?
Hey, why don’t you post some of your numbers, and specific instances? What state are you at, and what do you know about the new POS and the monthly costs associated?
I’m assuming they are till requiring PDQ as the POS, correct?
James, where is your store located and how much are you asking? do you have any other owners in your area?
You are right. I sold mine. You are at the mercy of rising food costs, rising rents, rising requirements from JJ’s headquarters. When you open your restaurant, just wait till your franchise fees are twice as much as your profit, ON YOUR BEST MONTH! The reality, is you are better off opening an independent sandwich shop. It will cost you less than half to open. cost you half as much to operate, and make twice as much profit.
Have you sold it yet? What state are you in? Have you at least made a profit? What does corporate tell you to do, to try to be profitable?
Hi EVERYONE!! my husband is thinking of buyingg Jimmy John’s franchsie & afet looking at these comments & suggestion from you all I am very apprhensive.Is there any one out there who could give me thier email whith whom we can discuss this on a personal level.It would be highly appreciated!!!
I have a store I am thinking about buying it does $42k a month and the owner has a payroll of $160k a year with manager. Rent is $3400.00 a month . I have never ran a Sub Shop before and was considering bringing down payroll to 100k a year . I would like to know if this would be ok with Jimmy JOhns as long as people are served and is the asking price to much? and is there money to be made at a 27% food cost ?
The owner is asking $380k for this business.
You will not want to reduce your labor to 100k. Your sales will drop considerably. I bought my Jimmy Johns 2 years ago and have had 20-30% comps each year. I credit additional labor and sampling to my growth.
I am currently approaching 50k a month. Margins are too thin for me and I am beginning to consider selling.
What are your margins? What’s the killer, the bread and sandwich fillings?
I think Jimmy Johns has minimum requirements for labor, so reducing to $100k may not be an option.
I have been a G.M. for a franchise unit for about 8 years and plan on buying my own unit in the summer, I have a store that does a million in royalty sales consistently each year. I hope I could answer some of your questions with my experience. Most stores usually range from 300k-500k. Avg. sales for the 1st year 450k. Although JJ is becoming a very well-known brand, it still takes a lot of work to become profitable, but one thing where a lot of franchisees make the mistake of being too cheap. If you want to own a JJ you must realize you have to spend money to make money, and what I’ve learned over the years is you always have to make sure you’re always properly staffed so your labor will be the biggest loss for the 1st year. Sampling also is very important and yes it can get a bit expensive but it’s very effective especially when you 1st open a store. I’ve seen stores around the Chicago area not do so well mainly because owners/managers weren’t following the system given and that’s probably why you see people talking about how they hate this company so much but really it’s the easiest system there is. I do however see flaws with JJ. The equipment often do break down, my brand new coldtable when we 1st opened needed repairs after 2 months and happens often. You can’t create your own marketing for instance, I made models of what our catering looks like to display and has helped a lot but when my business coach saw it she told me stuff like that must come from their marketing dept. but they have nothing like that so I can’t do it at all. Business coaches are supposed to audit stores monthly and give their input on what owners/managers need to work on to ensure their store is on the right path to being successful. It’s a good source to have but corporate has so much turnover and most people in that position never had any experience working in JJ or any restaurant experience at all, and yes they are very inconsistent with their audits and they really don’t benefit you like they’re supposed to. Well if anyone wants to ask me any questions, ask.
What do food costs run as a % of sales? How much do you pay for ham or turkey per pound for example? More than what you pay at a grocery? Do you make money on delivery or is that a loss overall?
Hello,
Just wanted to put my 2 cents in. I see a lot of comments in regards to Jimmy John’s in terms of profitability, support and operations. Should anyone like to know more or understand from an unbiased point of view with real life JJ’s experience, feel free to contact me.
Just a quick background, I did work for a JJ’s franchisee. I started as a shift manager and worked my up into a Director of Operations role. I understand the concept inside out. I have seen people do well, and I have seen people fail. In both instances I can explain the honest to goodness truth about why that happens – and it’s really not so much to do with the concept as it does the people themselves.
I can also help pinpoint issues with COG’s and Labor and how to raise sales in all units – suburban and campus.
If you’re interested feel free to email me, more than happy to help.
Best,
I’m thinking of taking the plunge and investing in a store and would like to get your insights. Can you post your email address so I can drop you a note? Thanks.