Jimmy John Liautaud started his mega-business, Jimmy John’s Sandwich Shops, in the Chicago area in 1983. Fresh out of high school, his father loaned him the seed money to open his first sandwich shop in Charleston, Illinois, close to the Eastern Illinois University dorms. On the menu of that first shop were just four kinds of sandwiches; but Jimmy John’s attention to detail and willingness to offer free delivery, not to mention an enormous amount of hard work, insured Liautaud profitability within his first year of operations.
Within just 10 years Jimmy John Liautaud had ten stores in his growing empire. Soon he was selling franchise outlets. This is not to say the enterprise has not also had its down moments. In 2002 there were 160 Jimmy John’s shops, but 70 of those were losing money. That was the signal for Liautaud to put a freeze on selling franchises and hit the road. He spent a year and a half visiting the failing outlets and getting them back on track. Seven were beyond repair and were forced to close, but the overall outcome was positive for the business as a whole.
That experience changed the way Liautaud sells his franchises.
“I learned a lot from that experience so I changed the rules for allowing people to buy into my system as a franchisee,” Liautaud says on the company website. “I explained in detail how tough running a Jimmy John’s can be. I explained the long hours, the unforgiving weather, the late nights, the weekends, and all of the sacrifices that go along with the industry. I made it tough for people to get into the system.”
This new attitude helped catapult Jimmy John’s into becoming one of the best franchise ideas in the United States. In 2015 Entrepreneur Magazine named Jimmy John’s as the country’s Number One Business on their Franchise 500 list.
Now Liautaud is taking Jimmy John’s up a notch or two. In early September Roark Capital Group signed an agreement to purchase a majority stake in the company. Although an exact price has not been disclosed, the company was valued in 2015 at $2 billion when it prepared to, but did not follow through with, an IPO.
“I’ve spent two years getting to know the Roark team,” Liautaud said last week. “They are best-in-class people that have the knowledge and expertise that will help us take this brand to the next level.”
Roark is a private equity firm which owns majority shares in several popular food chains, including Arby’s, Miller’s Ale House, and CKE Restaurants (parent company of Carl’s Jr, Hardee’s, Green Burrito and Red Burrito.)
Jimmy John Liautaud will continue as the chairman of Jimmy John’s board of directors. He will also remain as the company’s largest single individual shareholder.