Jimmy John's

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Jimmy John's Franchise, LLC
Jimmy John's
TypeSubsidiary
IndustryRestaurants
GenreFast food
FoundedJanuary 13, 1983; 40 years ago (1983-01-13)
Charleston, Illinois, United States[1]
FounderJimmy John Liautaud
Headquarters,
United States
Number of locations
2,745 (December 2022)[2]
Area served
United States
Key people
James North (President)
ProductsSandwiches
sides
ServicesFranchising
RevenueIncrease US$3.1254 billion (2019)[2]
OwnerJimmy John Liautaud (1983–2019)
Roark Capital Group (2019–present)
Number of employees
45,000 (2019)[2]
ParentInspire Brands
Websitejimmyjohns.com

Jimmy John's is an American sandwich chain headquartered in Champaign, Illinois. The business was founded by Jimmy John Liautaud in 1983.[3] After Liautaud graduated from high school, his father gave him a choice to either join the military or start a business. Liautaud, choosing the latter, initially decided to start a hot dog business, but changed to opening a sandwich business due to costs.

The Jimmy John's franchise has over 2700 locations, with 98% of them being franchises.[4] in 2016, Roark Capital Group purchased a majority stake in the company. Later, in 2019, Inspire Brands purchased the company from Roark Capital Group for an unspecified amount.

Jimmy John's Headquarters at 2212 Fox Drive, Champaign, IL, 61820.
Jimmy John's Headquarters in Champaign, Illinois

History[edit]

Original Jimmy John's Shop
Headshot of Jimmy John Liautaud in 2018 in front of a Jimmy John's menu
Jimmy John Liautaud in 2018

After Jimmy John Liautaud graduated second to last in his class at Elgin Academy in 1982, his father gave him a choice to either join the Army or start a business.[5][6] Although his father wanted him to enlist, the younger Liautaud chose the latter, and his father agreed to loan him $25,000 in exchange for a 48% stake in the business.[6][7] Initially Jimmy John wanted to open a hot dog stand, but after visiting numerous such stands throughout the summer of 1982, he realized the $25,000 would not be enough for such a venture.[8][3] After a chance encounter at a sandwich shop, Jimmy John realized that he could open a sandwich shop within his available budget by purchasing premium meats at a neighborhood market and baking his own bread. With the help of his family as tasters, he decided to put four sandwiches on his original menu. Paying $200 a month in rent, Liautaud could only afford used equipment consisting of a refrigerator, a chest freezer, an oven, and a meat slicer.[9]

On January 13, 1983, Jimmy John's Gourmet Sandwiches opened in Charleston, Illinois.[10][8] Due to the poor location of his first store, Liautaud decided to include delivery of his sandwiches to boost sales. He began by bringing samples door-to-door to the dorms of nearby Eastern Illinois University, which he had attended for one semester.[8][11]

By the end of his first year, the restaurant started making a profit. In April 1985, Liautaud bought out his father's interest in the business, becoming the sole owner. In 1986, he opened his second store in Macomb, Illinois, and in 1987, he opened a third in Champaign, Illinois.[citation needed] The business continued to grow, and he was able to open his second and third shops in 1986 and 1987.

In 1988, Liautaud met Jamie Coulter, who at that time was a Pizza Hut Franchisee and would later become the CEO of Lone Star Steakhouse & Saloon. Coulter mentored Liautaud and "taught [him] how to effectively run multiple units."[8] Liautaud continued opening more stores and developed a prototype before beginning franchising in 1994. In 1994, he sold his first Jimmy John's franchise, in addition to the 10 stores owned by Liautaud himself.[8][12]

The first franchise store opened in Eau Claire, Wisconsin. In 2001, the hundredth Jimmy John's store opened in Mt. Pleasant, Michigan. By 2002, the company had about 200 stores, 10% of which were corporate stores that Liautaud oversaw himself. However, Liautaud noticed that sales at the stores he owned were outpacing the franchised stores by a wide margin. Liautaud stopped selling franchises for one year to give support to stores that were struggling.[13] Together with his partner, and now president & CEO, James North, he visited 70 of the poorest-performing stores. After 18 months of getting the stores “back to basics” and instilling in them “some of that initial spark”, he was able to help the stores become more profitable.[11]

In 2007, the 500th store opened in Seattle, Washington, and in 2010, the 1,000th opened in Beaverton, Oregon.[14] As of March 2017, Jimmy John's had almost 3,000 stores with plans for expansion up to 5,000 more.[15] Liautaud realized that, in order to grow, he would need help acquiring better locations for his stores. Since he had little expertise in real estate, he decided to take on a partner who did. In January 2007, Liautaud sold a 33% stake to Weston Presidio, a San Francisco–based private-equity firm.[16] In the first year after partnering with Weston Presidio, 100 real estate deals were closed.[8] The company has completed two recapitalizations since Weston Presidio's investment.[17]

In the summer of 2015, pictures of Liautaud posing with big game circulated on social media, leading to increased calls to boycott his restaurants. In a 2015 interview with the Chicago Tribune, Liautaud said, "I don't hunt big African game anymore."[18]

In September 2016, Jimmy John's announced that Roark Capital Group had agreed to acquire a majority stake in the company. Terms of the transaction were not immediately disclosed, though it was later clarified that Liautaud retained 35% ownership of the company as part of the deal.[19] As part of the agreement, Liautaud would continue as chairman of the board.[20][21]

On September 25, 2019, Inspire Brands (affiliated with Roark Capital Group) announced that it was buying Jimmy John's for an unspecified amount in a deal unanimously approved by Liautaud and the rest of the Jimmy John's board of directors.[22] At the close of the deal, Liautaud would step down as chairman of the company and transition to become an adviser to the brand.[23][24][25] The acquisition was completed on October 18.[26]

Labor relations[edit]

In 2010, when the Industrial Workers of the World attempted to unionize ten Minneapolis locations, The New York Times called the effort "one of the few efforts to organize fast-food workers in American history."[27] In July 2017, the United States Court of Appeals for the Eighth Circuit found that the National Labor Relations Act did not protect Jimmy John's employees from being fired for exhibiting legally disloyal conduct by attacking the company's product to oppose a franchisee's sick leave policy.[28][29]

In October 2014, it was revealed that employees at Jimmy John's, including sandwich makers and delivery drivers, were required to sign non-compete agreements as a condition of employment.[30][31] The agreement restricted the employee from working for a competitor for two years, where a competitor was defined as a business that derives more than ten percent of its revenue from selling sandwiches and is located within three miles of any Jimmy John's. Additionally, the employee could not work for another Jimmy John's franchisee for a year.[32] Jimmy John's has since settled related lawsuits filed by the Attorneys General of New York and Illinois. In statements, the company clarified that it had taken steps to remove non-compete agreements from their new hire paperwork long before they were contacted by the Attorneys General, and that "enforcement of non-compete agreements against our own hourly store employees is not a part of Jimmy John's culture or business model."[33]

Menu[edit]

Jimmy John's has three bread options: French, thick-sliced Wheat, and the six-inch "Lil' John" (smaller version of French bread), as well as a lettuce wrap option known as the Unwich. Jimmy John's has 17 different numbered sandwiches plus a B.L.T., called the J.J.B.L.T, and the Gargantuan, a combination of all the meats. The 17 sandwiches may have ham, roast beef, tuna, turkey, salami, capicola, bacon, or provolone cheese or combine two or more meats and cheese. Jimmy John's has five flavors of chips, including Regular, BBQ, Jalapeño, Salt and Vinegar, and Thinny (low-fat version of the Regular). The menu also includes kosher dill pickles as well as "triple chunk" chocolate and oatmeal raisin cookies.[34] Nrispie

Awards and recognition[edit]

Jimmy John's was named #1 on the Entrepreneur 2016 Franchise 500.[35] In 2014, YouGov BrandIndex ranked restaurant chains that have the highest millennial brand loyalty, and Jimmy John's topped the ranking with 83% of the vote based on restaurants they would consider going to again.[36] Jimmy John's was named the #2 Most Popular Restaurant for Business Meals by expense reporting program Certify.[37] In 2015, Entrepreneur.com named Jimmy John's one of the 10 Promising Franchises for Ambitious Entrepreneurs.[38] In March 2017, Jimmy John's won Franchise Times' "Deal of the Year" for attracting Roark Capital Group as the company's new majority owner. FT's judges called the deal "one of the best private equity deals of all time in the restaurant business."[39]

CNN Money listed Jimmy John's as one of ten "Great Franchise Bets". The company estimates that annual sales can be as high as $1.2 million while net profits can average at about $280,000. Real estate start-up costs are estimated to be between $305,000 and $485,500.[9]

Philanthropy[edit]

In September 2014, Jimmy John's donated $1 million to the Folds of Honor Foundation, a foundation that supports the families of killed or disabled soldiers.[40] During the 2015 school year, Jimmy John's donated more than 100 laptop computers to the Champaign Unit 4 School District.[41] Jimmy John's donated $125,000 to the Champaign Parks Foundation to support the Youth Scholarship Program in November 2016.[42]

In June 2017, Jimmy John's donated $100,000 to EAT (RED) SAVE LIVES to offer HIV/AIDS medication in sub-Saharan Africa.[43]

In December 2018, Jimmy John's donated $80,000 to pay off all Christmas layaways at Walmart in Champaign, Urbana, and Savoy.[citation needed]

Sponsorships[edit]

Liautaud with Jimmy John's driver Kevin Harvick and others

Starting in 2007, Jimmy John's began sponsoring NASCAR, first with Steven Wallace in 2007 and 2008. In 2009 and 2010, Jimmy John's sponsored Kevin Harvick in the NASCAR Nationwide Series.[44] In 2011, Jimmy John's and Richard Childress Racing reached a multi-year agreement to sponsor Harvick for the Sprint Cup Series. The 2014 sponsorship continued with Harvick and the Stewart-Haas Racing team.[45] On September 13, 2014, Jimmy John's became the title sponsor of the Jimmy John's Freaky Fast 300 at Chicagoland Speedway.[46] Harvick won the 2014 NASCAR Sprint Cup Championship, giving Jimmy John's their first championship. From 2010 to 2019, Jimmy John's entered into an Ultimate Fighting Championship sponsorship with Brock Lesnar with logos appearing on his trunks. This sponsorship extended to WWE upon Lesnar's return to that company in 2012, making him the only WWE performer in history to be permitted such a deal.[47]

In 2015, Jimmy John's co-sponsored the RCH Factory Racing Supercross and Motocross team featuring Ken Roczen. The team contested both the Monster Energy AMA Supercross and the Lucas Oil Pro Motocross championships.[48] In June, Jimmy John's sponsored former NASCAR champion Rusty Wallace for his Speed Energy Formula Off-Road debut at the 2015 X Games.[49]

Jimmy John's Field photographed on July 31, 2016
Jimmy John's Field in 2016

In June 2015, it was announced that Jimmy John's purchased the naming rights to the Utica, Michigan baseball stadium which is the current home of the three teams in the newly formed United Shore Professional Baseball League.[50] Jimmy John's Field opened on May 30, 2016.[51][52]

Other Jimmy John's sponsorships include the Boston Red Sox, Chicago Blackhawks, Detroit Red Wings, Houston Astros, Nashville Predators, St. Louis Cardinals, Seattle Mariners, and the GoDaddy.com Bowl, among many others.[53]

Jimmy John's owners have also supported local organizations in their communities. Two such sponsored organizations include the Utah Youth Soccer Association[54] and the Arizona Soccer Association.[55]

FDA warning[edit]

On February 21, 2020, the U.S. Food and Drug Administration sent an FDA warning letter to Jimmy John's[56] detailing evidence from five outbreaks of human infections with Escherichia coli. The letter said that the evidence demonstrates that the company engaged in a pattern of receiving and selling spoiled produce, specifically clover sprouts and cucumbers. In the letter, the FDA says the Iowa Department of Public Health reported that, as of January 2020, a total of 22 people were infected with the outbreak strain of E. coli. "20 of the 22 case individuals were interviewed by the Iowa Department of Public Health," the FDA says. "Of the case individuals interviewed, 100% reported eating at one or more of 15 Jimmy John's restaurants." The FDA gave the company 15 days to respond and include specific steps it is taking to address the violations.

See also[edit]

References[edit]

  1. ^ "Jimmy John's History". Jimmy John's.
  2. ^ a b c "Jimmy Johns USA". Scrapehero. December 7, 2022.
  3. ^ a b "10 Things You Didn't Know About Jimmy John's – Facts & Trivia". Thrillist. May 10, 2015. Retrieved June 6, 2016.
  4. ^ "About Us". Jimmy John's. Retrieved February 11, 2022.
  5. ^ "Reece: The ABCs of success in business". Northwest Herald. February 19, 2013.
  6. ^ a b Johnson, Dirk (December 30, 2008). "Troublesome Student Makes Good, and Honors Disciplinarian". The New York Times. Retrieved June 2, 2016.
  7. ^ "Jimmy John's born from tough love". McHenry County Business Journal. Archived from the original on June 16, 2011. Retrieved June 13, 2011.
  8. ^ a b c d e f Casey, Erin (March 4, 2009). "Success Stories: Jimmy John Liautaud". SUCCESS Magazine. Archived from the original on July 15, 2018.
  9. ^ a b "10 Great Franchise Bets – Jimmy John's". CNN Money. June 16, 2011. Retrieved June 6, 2016.
  10. ^ Giammona, Craig (December 1, 2015). "Jimmy John's Founder Abandons IPO, Saying He's Not a Wall Street Guy". Bloomberg.com. Retrieved June 2, 2016.
  11. ^ a b Bomkamp, Samantha (November 3, 2015). "Jimmy John's founder opens up on expansion, big game hunting, possible IPO". Chicago Tribune. Retrieved June 2, 2016.
  12. ^ Wohl, Jessica (November 3, 2015). "Sub Shop Owner Jimmy John Weighs IPO but Isn't Sure He Has the Stomach for It". Ad Age. Retrieved September 8, 2016.
  13. ^ "Jimmy John's Sandwiches Business Overview". Franchising.com. Retrieved July 7, 2016.
  14. ^ "1000th store". WAND-TV.
  15. ^ Ewen, Beth (March 22, 2017). "How Jimmy John's landed FT's deal of the year". Franchise Times. Retrieved April 2, 2017.
  16. ^ "Jimmy Johns stake sold". Chicago Tribune. January 4, 2007. Archived from the original on January 6, 2007. Retrieved June 1, 2016.
  17. ^ Oran, Olivia (May 26, 2015). "Exclusive: Gourmet sandwich chain Jimmy John's prepares IPO – sources". Reuters.
  18. ^ Bomkamp, Samantha (November 3, 2015). "Jimmy John's founder opens up on expansion, big game hunting, possible IPO". Chicago Tribune. Retrieved June 1, 2016.
  19. ^ Frost, Peter (January 21, 2017). "Jimmy John Talks". Crain's Chicago Business. Retrieved January 29, 2017.
  20. ^ Taylor, Kate (September 8, 2016). "How a 19-year-old turned a sandwich shop into a billion-dollar business". Business Insider. Retrieved September 11, 2016.
  21. ^ Frost, Peter (September 8, 2016). "Arby's owner buys Jimmy John's majority stake". Crain's Chicago Business. Retrieved September 15, 2016.
  22. ^ "Inspire Brands to Acquire Jimmy John's". Inspire Brands. September 25, 2019. Retrieved October 9, 2019.
  23. ^ Lucas, Amelia (September 25, 2019). "Arby's owner Inspire Brands buys Jimmy John's". CNBC. Retrieved September 26, 2019.
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  25. ^ Haddon, Heather (September 25, 2019). "Arby's Parent to Acquire Jimmy John's". The Wall Street Journal. Retrieved October 9, 2019.
  26. ^ Ruggless, Ron (October 18, 2019). "Inspire completes purchase of Jimmy John's". Nation's Restaurant News. Retrieved October 21, 2019.
  27. ^ Greenhouse, Steven (October 20, 2010). "Rare Vote Set on a Union in Fast Food". The New York Times.
  28. ^ Note, Recent Case: Eighth Circuit Holds Employee Organizing Activity Unprotected for Disloyalty Despite Lack of "Malicious Motive", 131 Harv. L. Rev. 1820 (2018).
  29. ^ "'Disloyal' Jimmy John's Workers Lost their Protections". Franchise Times. July 2017. Retrieved November 21, 2018.
  30. ^ Jamieson, Dave (October 13, 2014). "Jimmy John's Makes Low-Wage Workers Sign 'Oppressive' Noncompete Agreements". HuffPost. Retrieved October 14, 2014.
  31. ^ Irwin, Neil (October 14, 2014). "When the Guy Making Your Sandwich Has a Noncompete Clause". The New York Times. Retrieved October 14, 2014.
  32. ^ "Employee Confidentiality and Non-Competition Agreement" (PDF). HuffPost. September 19, 2014. Retrieved October 14, 2014.
  33. ^ Frost, Peter (December 7, 2016). "Jimmy John's backs off controversial noncompetes in deal with Illinois AG". Crain's Chicago Business. Retrieved December 15, 2016.
  34. ^ "Jimmy John's Menu" (PDF). Jimmy John's.
  35. ^ "2016 Top Franchises from Entrepreneur's Franchise 500 List". Entrepreneur. Retrieved July 7, 2016.
  36. ^ Lutz, Ashley (December 19, 2014). "5 Restaurant Chains Millennials Love". Business Insider Australia. Retrieved January 30, 2016.
  37. ^ "Can You Guess The Most Popular Restaurant For Business Meals?". Bisnow. Retrieved January 30, 2016.
  38. ^ "10 Promising Franchises for Ambitious Entrepreneurs". Entrepreneur. December 4, 2015. Retrieved January 6, 2016.
  39. ^ Ewen, Beth (March 14, 2017). "Jimmy John's Leads List of Franchise Times Dealmakers Winners". Franchise Times. Retrieved March 22, 2017.
  40. ^ Dodson, Don (July 30, 2014). "Military charity getting $1 million from Jimmy John's". The News-Gazette. Retrieved November 9, 2017.
  41. ^ Schmit, Emily (June 1, 2015). "JIMMY JOHN'S COMPUTER DONATION BENEFITS UNIT 4 STUDENTS & FACULTY". Champaign Unit 4 School District. Retrieved November 9, 2017.
  42. ^ "Jimmy John Liautaud: We are happy to help the park district help more kids". Champaign Park District. November 22, 2016. Retrieved November 9, 2017.
  43. ^ Stevens, April (June 15, 2017). "Jimmy John's supports (RED), donates $100K in the fight against AIDS". WZZM. Retrieved November 9, 2017.
  44. ^ "Jimmy John's Jumps On Board With KHI". Hardcoreracefans.com. February 10, 2009. Archived from the original on July 24, 2011. Retrieved June 13, 2011.
  45. ^ "Jimmy John's to sponsor Harvick in 2014". NASCAR. September 24, 2013. Archived from the original on April 9, 2016. Retrieved September 25, 2013.
  46. ^ "Jimmy John's Folds of Honor". Tulsa World. Retrieved July 30, 2014.
  47. ^ "The pro wrestling post: WWE stock, Lesnar's sponsors and TNA-Bellator working together?". mmapayout.com.
  48. ^ "Ken Roczen signs with RCH racing". motorcycle-usa.com. May 2015.
  49. ^ Fryer, Jenna (April 2, 2015). "Rusty Wallace to Compete in off-Road Truck Race at X Game". ABC News. Archived from the original on April 3, 2015. Retrieved April 2, 2015.
  50. ^ Shea, Bill (June 23, 2015). "Jimmy John's buys naming rights to new Utica baseball stadium". Crain's Detroit Business.
  51. ^ Reichard, Kevin (May 30, 2016). "New Utica Ballpark a Springboard for League Expansion". Ballpark Digest.
  52. ^ Spedden, Zach (February 1, 2016). "Ballpark Preview: Jimmy John's Field". Ballpark Digest.
  53. ^ Shea, Bill (June 23, 2015). "Jimmy John's adds another sports sponsorship—in Michigan". Crain's Chicago Business.
  54. ^ "Jimmy John's". Utah Youth Soccer Association. Retrieved June 6, 2018.
  55. ^ "ASA & Jimmy John's Announce Partnership". Arizona Youth Soccer Association. Retrieved June 6, 2018.
  56. ^ "WARNING LETTER, FY2020-HAFE6-01". Food and Drug Administration. February 25, 2020. Retrieved April 13, 2020.

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