Jimmy John Liautaud’s restaurant growth

wage rise

After graduating high school, Jimmy John Liataud set out to start his own business. He first began with the idea of starting a hotdog stand.

Jimmy made a deal with his father – his dad would lend him $25,000 (about $64,171 in 2019) to start his own business, and if it succeeded, his dad would own 48% of the business; if it did not succeed, Jimmy would agree to join the Army. After doing research on various hotdog stands, Jimmy realized it would cost him about $45,000 just for the equipment to start his business.

His father would not budge on the loan of $25,000, so Jimmy had to rethink his idea. He eventually decided instead to open a sandwich shop, which appeared to be more realistic and cost much less.

Jimmy created six sandwiches, and following a family taste-testing, he narrowed his first menu down to four sandwiches. Jimmy found a two-car garage in an alley in Charleston, Illinois that had previously been a pizza shop. He converted the set up with his own style, and on January 13, 1983, the first Jimmy John’s Gourmet Sandwiches opened.

Located close to bars, it was an ideal hub for college students. Business at the sandwich shop was slow at first, but Jimmy realized that he could get recognition by passing out samples of his sandwiches across neighboring blocks. He then decided to place his simple menu on the back of his business cards and pass them out around the nearby university. His entrepreneurial marketing campaign worked and led to a $40,000 profit in his first year.

After reaching early success, Jimmy was able to buy out his father by paying back his original loan plus interest by 1986. With 10 shops in business by 1994, Jimmy had made his first $1 million and had sold his first franchise. As such businesses climb to success, they can also hit bumps in the road. Jimmy Johns had 160 stores by 2002, but somehow 70 of them were failing. Jimmy decided it may be time to put selling franchises on hold for a year and develop a strategy.

He hit the road with Jimmy John’s president James North (who is still the current president) to visit stores across the United States in order to retrain every franchise owner and team side-by-side on correct systems and procedures.

He knew that taking the time to demonstrate how his sandwich shops should be run as well as being able to share his knowledge in a face-to-face setting would make a remarkable impact with the owners and their teams. Jimmy became transparent about job expectations and the number of hours it would take each location to fulfill these expectations. He said, “It was my naivete. I couldn’t believe that people didn’t want to get up at 5:00 in the morning and bake bread and make sandwiches all day and into the night. I was shocked. I didn’t know that I was the weirdo.”

After having faced the reality of demands in a wide variety of locations, Jimmy and James were able to set higher standards for their franchisees upon returning from their nationwide trek. Having set out with their mission realized, Jimmy John’s was able to claim even more success.

In 2007, founder Jimmy John Liautaud’s influence on the food industry became notable — Jimmy John’s had opened their 500th location. Following their path of opening more stores, they opened their 1000th location in 2010. Even more amazing, their 2000th location opened in 2014. Jimmy had never imagined the scale to which his eponymous business would grow. Because of his determination, mentors and leaders from within and outside the company, and many dedicated employees, Jimmy John’s was able to become one of the fastest growing restaurant chains in the United States. Jimmy John’s soon brought on an investor, Weston Presidio, in 2007, which helped grow sandwich sales from $300 million to $2.5 billion in 2014.

They then exited, and Jimmy was cautious about bringing on another investor as well as taking the company public. That being said, taking the company public was something Jimmy knew he needed to do in order for the business to continue to grow. In 2016, he decided he was comfortable with a big change, and after securing a sufficient deal, Jimmy John Liautaud sold a majority stake of his company to private equity firm Roark Capital.

He retained 35% as the single largest individual shareholder and stayed on as the Chairman of the company, which allowed him to focus on more specific aspects of the business as well as personal philanthropic efforts. Knowing the leadership of the company was in good hands, Jimmy was still able fulfill important duties for Jimmy Johns including traveling the country once again in order to show the business’s dedication to local communities and take an active role in sponsorships.