Jimmy John's

History

After Jimmy John Liautaud graduated second to last in his class at Elgin Academy (1982), his father gave him the choice to join the military or start a business. Liautaud chose the latter and his father lent him $25,000 to start a hot dog business, with the son owning 52% of the business, and his father owning 48%. He soon realized that a hot dog business would cost more than he had, so he decided to open a sandwich shop.

On January 13, 1983, the first Jimmy John's opened in a garage in Charleston, Illinois. Paying $200 a month in rent, Liautaud could afford only used equipment consisting of a refrigerator, a chest freezer, an oven, and a meat slicer.

The store was able to realize a profit its first year of business, despite the poor location of the store, due to Jimmy John’s willingness to deliver his sandwiches to the nearby dorms at Eastern Illinois University, as well as his handing out free samples for marketing purposes.

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.

In 1988, Liautaud met Jamie Coulter, who would later become the CEO of Lone Star Steakhouse & Saloon. Coulter mentored Liautaud, and “taught [him] how to effectively run multiple units.”

Liautaud continued opening more stores and developed a prototype before beginning franchising in 1994. Franchising continued until 2002 when Liautaud stopped selling franchises for one year to give support for stores that were struggling. The first franchise store opened in Eau Claire, Wisconsin. In 2001, the hundredth Jimmy John's store opened in Mt. Pleasant, Michigan. In 2007, the five-hundredth store opened in Seattle, Washington, and in 2010, the thousandth opened in Beaverton, Oregon.

CNNMoney 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.

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. In the first year after partnering with Weston Presidio, 100 real estate deals were closed.

The company has completed two recapitalizations since Weston Presidio's investment.

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 an interview in 2015 with the Chicago Tribune, Liautaud clarified, "I don't hunt big African game anymore."

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. As part of the agreement, the company's founder and largest individual shareholder Jimmy John Liautaud will continue as chairman of the board.

Labor relations

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."

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. The agreement restricted the employee from working for a competitor for two years, where a competitor was defined as a business which 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. Jimmy John’s has since settled lawsuits filed by the Attorneys General of New York & Illinois on this matter. In statements, the company clarified that it had taken steps to remove noncompete agreements from their new hire paperwork long before they were contacted by the Attorneys General, and that “Enforcement of noncompete agreements against our own hourly store employees is not a part of Jimmy John’s culture or business model.”

Awards

Jimmy John's was named #1 on the Entrepreneur 2016 Franchise 500. 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. Jimmy John's was named the #2 Most Popular Restaurant for Business Meals by expense reporting program Certify. In 2015, Entrepreneur.com named Jimmy John's one of the 10 Promising Franchises for Ambitious Entrepreneurs.

Sponsorships

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. 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. On September 13, 2014, Jimmy John's became the title sponsor of the Jimmy John's Freaky Fast 300 at Chicagoland Speedway. Kevin Harvick won the 2014 NASCAR Sprint Cup Championship giving Jimmy John's their first championship.

In 2010, Jimmy John's entered an Ultimate Fighting Championship sponsorship with Brock Lesnar. Lesnar returned to the WWE in 2012 and continued his sponsorship with Jimmy John's.

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. In June, Jimmy John's sponsored former NASCAR champion Rusty Wallace for his Speed Energy Formula Off-Road debut at the 2015 X Games.

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. Jimmy John’s Field opened on May 30, 2016.

Other Jimmy John's sponsorships include the Detroit Red Wings, the Chicago Blackhawks, and the GoDaddy.com Bowl among many others.