Jimmy John’s Franchise Cost Profit Failure Rate

Jimmy John’s franchise, the well-known exotic sub restaurant that prides itself on being the leader in bread and vegetables in a wonderful sandwich proves to be an excellent choice for a sandwich-themed business opportunity. While considering the marketing advantages of owning a well-structured and established sandwich shop chain, you must also be familiar with the workings and operations of the franchise.

What is the Jimmy John’s?

Jimmy John’s is an American sandwich restaurant chain that specializes in delivery. Jimmy John founded the business in Champaign, Illinois, in 1983. With the exception of Norway, Georgia, Ireland, and Vermont, the business has expanded to about 2,800 locations in 35 years. Jimmy John’s Franchise LLC owns Jimmy John’s and appoints franchises in the United States and worldwide.

As of 2014, 98% of the businesses were franchised. Jimmy John’s has approximately 3,000 outlets, with plans to expand to 5,000 and beyond. After being founded in 1983, it began franchising in 1993. Jimmy John’s has joined the Inspire Brands restaurant group, which gives them even more power. Jimmy John’s Gourmet Sandwiches currently has over 2,700 locations. Jimmy John’s Gourmet Sandwiches makes its sandwiches with fresh vegetables and meats. Their bread is freshly made and their meat is sliced and cooked to order. Its mission is to create delicious sandwiches for its loyal consumers.

Is Jimmy John’s a Franchise Opportunity?

Yes, Jimmy John’s is a franchising opportunity. The various kinds of facilities granted by the franchisor to potential franchisees include drive-thru as well as non-drive-thru models. A drive-thru model is considered to be a more profitable opportunity when compared to a non-drive-thru model. 

Jimmy John’s Franchise Requirements

As far as the franchise requirements of Jimmy Johns are concerned, a potential franchisee must adhere to the following restrictions and obligations diligently

• Franchisees must always perform their contractual responsibilities faithfully, honestly, and diligently, as well as use their best efforts to promote and strengthen the restaurant and Jimmy John’s as a brand. 
• The owners must personally assure the Franchise Agreement’s responsibilities and agree to be bound by every contractual element, whether monetary or non-monetary, including the covenant of not competing. not to compete.
• Franchisees must supply and sell all menu items and provide all services that the franchisor requires for Jimmy John’s restaurants on a regular basis. 
• Franchisees are not allowed to supply or sell any products or provide any services that have not been authorized by the franchisor.

Further, an ideal candidate can be more likely to become a successful franchisee if he has the following qualities or qualifications

• Manages multi-unit development 
• Strong experience in business management 
• Expertise in retail management 
• Leadership qualities
• Willingness to learn and grow

 

How much does a Jimmy John’s franchise cost

The franchise cost to become a successful franchise owner of Jimmy John’s are

• Initial franchise fee: $30,000-$35,000
• Initial investment: $575,600-$3,370,100
• Net worth: $5,000,000
• Cash requirement: $2,000,000

Further, the royalty fee and advertising fee to become a franchisee is 6% and 4.5% respectively. 

How much does it cost to franchise a Jimmy John’s in the United States?

The Jimmy John franchise cost to start is as the table below

Jimmy John’s Franchise Price and Costs
Jimmy John’s Franchise Fee	$30,00-$35,000
Jimmy John’s Franchise Cost	$355,900-$671,400
Royalty Fee	6%
Advertising Fee	4.5%
Term of Agreement	10 years
Is franchise term renewable?	Yes

How much do Jimmy John’s franchise owners make?

A Jimmy John’s franchise’s annual revenue is expected to be over $1.2 million. Additionally, a franchise owner might expect to make somewhere between $90,000 and $280,000 as a profit. The initial expense of purchasing and operating a franchise might be sizable, but its return on investment is extensive. If you want to start a restaurant, Jimmy John’s is the best place to start.

Investment	%  Profit margin	Estimated profits	Time to recoup the investment
$513,650	10%	$72,944	8.5 years
15%	$75,660	6.25 years
20%	$100,811	5 years

What is Jimmy John’s franchise profit?

A Jimmy John Gourmet Sandwiches franchise is an excellent investment option with high potential returns. The average Jimmy John’s restaurant profit franchise generates the following income and earnings, as per Jimmy John’s website and 2018 Franchise Disclosure Document

• Average Net Profit from Operations: $109,959
• Average Annual Gross Sales: 1,128,648
• Average Food & Paper Costs: 24.05%

Is Jimmy John’s franchise worth the cost and profit?

Jimmy John can prove to be worth the investment but it is important that you make sure to thoroughly research the opportunity while deciding whether or not to start a Jimmy Johns Gourmet Sandwiches franchise.

Investigate the brand and your local area to discover if this franchise would be successful in your area. While competition is good for business, too much of it may hinder progress. Please remember that Jimmy John’s Gourmet Sandwiches fails to provide direct financial assistance. They have, however, partnered with third-party lenders to provide finance for the accounts receivable, franchise fee, payroll, inventory, startup costs, and equipment. 

I recommend you look at a recovery period of 5 years to break even your investment of $1.2 million and you should make an annual profit of above $200,000.Also, look at sell-side valuation.

A Jimmy John’s franchise would re-sale for $272,728 based on a median multiple of 0.34 and an average net sales of $802,143 between 2020 and 2021. This is considerably less than the median investment of $513,650.

However, as the owner of several Jimmy John’s franchises, you have the potential to profit. Food and beverage industry owners with over $5 million in sales tend to enjoy a median multiple of.86. As a result, if you own ten Jimmy John’s franchises, you can possibly make $8,021,430 in sales. In comparison to the initial investment of $5,136,500, this network would sell for $6,898,429.

The more franchise units you have, the higher the earning potential you can enjoy as private equity firms become interested in your business. 

Jimmy John’s Training to Franchises

Before the restaurant opens, the operations partner and on-site managers designated by franchisees to become certified are required to be trained on the fundamental aspects of operating a Jimmy John’s restaurant, excluding labor relations and employment practices. Two weeks of training will be conducted at a designated training facility of the franchisor’s choice or at an operating Jimmy John’s restaurant.

Two weeks of training will be conducted at a designated training facility of the franchisor’s choice or at an operating Jimmy John’s restaurant. The operations partner must also successfully complete a four-week apprenticeship program. 

If this is their first Jimmy John’s location, the operations partner and on-site managers should first attend the “Boot Camp” training for new franchisees before completing the two-week training class.

How is Jimmy John’s Territory Granted to Franchises

Franchisees will run the restaurant from a specified site that the franchisor must first approve. Franchisees will not be provided with an exclusive territory. In addition, franchisees do not have any form of non-exclusive territory. Franchisees might face tough competition from other franchisees, locations owned by the franchisor, or other distribution channels or competitor brands controlled by the franchisor.

What is Franchise Term of Agreement and Renewal?

The original franchise term is considered to be 10 years from the date the restaurant first opens for business to the general public. If franchisees are able to comply, they may buy one successor franchise on then-current terms (which may be significantly distinct) for the shorter of ten years or the lease period.

Does Jimmy John’s provide Financial Assistance to Franchises?

The franchisor provides no direct or indirect finance. The franchisor, in addition to this, fails to guarantee a franchisee’s lease, note, or obligation.

Pros & Cons of Owning a Jimmy John’s Franchise

Pros

• Great opportunity for growth
• Proven business model
• Strong franchise support
• Superior brand recognition 
• Simple yet appealing menu
• Efficiency in its operations 

Cons

• No exclusive territory protection
• No financing
• Strict

What are Jimmy John’s franchise reviews?

Jimmy John’s is a fast-food restaurant chain in the United States that has been witnessing a slight decline. People adore fast food and will continue to consume it, but there tends to exist intense competition. It also appeals to a market of college students who consume an unhealthy amount of fast food.

Depending on profitability, you can return your investment in 4.5 to 7.5 years if you open a Jimmy John’s franchises. This is significantly faster than other food and beverage franchises. However, if you wish to profit from the sale of your franchise, you must be willing to open several locations.

You should ask management on the list of Jimmy John’s franchise owners and find your answers and reviews from them.

Jimmy John Franchise Rankings

Rank	Year	Achievement
#82	2023	Franchise 500 Ranking
#126	2022	Fastest-Growing Franchises
#105	2022	Fastest-Growing Franchises (US & Canada)
# 2	2022	Top Food Franchises (Miscellaneous Sandwiches in 2022)

Franchise Deck Analysis and Overview

Jimmy John’s is a well-renowned upstart sandwich restaurant that is putting longtime favorites like Subway off the guard, and it is no surprise. Founded in 1983, they based their reputation on freshly produced meals created with the greatest ingredients they could find, made so quickly that a person could be in and out the door in no time. 

Their goal statement emphasizes American-made meat products, daily baked bread, and environmentally friendly methods. They even emphasize their commitment to green initiatives, such as recycling and sustainable farming, and emphasize that wherever their stores are located, they rely on local companies, electricians, sign-makers, plumbers, and carpenters to make them who they are.

Jimmy John’s Franchise Success and Failure Rate

The below table will highlight the Jimmy John franchise’s success and failure rate for the last 3 years. This will supplement your decision-making process.

Year	Format	Start	End	Change
2019	Franchise Owned	2759	2746	-13
Company Owned	45	42	-3
2020	Franchise Owned	2746	2659	-87
Company Owned	42	41	-1
2021	Franchise Owned	2659	2616	-41
Company Owned	41	41	0

Over the previous three years, many Jimmy John’s franchised locations have closed. This indicates that the franchisees were underperforming; especially with the advent of the global pandemic when 1,600 locations were lost. I can conclude that Jimmy John’s franchise failure rate is 3% in 2020, which is high for a stable franchisor.

Competition Analysis
Jimmy John’s	Cost to Franchise	Franchisee Fees	Royalty + Ad fees	Expected Profit	Recoup of Capital	FD Rating
Jimmy John’s	$355,900-$671,400	$30,000-$35,000	6%+4.5%	$90,000-$280,000	5-8.5 years
McDonald Franchise	$1,366,000 to $2,450,000	$45,000	4%+4%	$150,000	8.5 years
Subway Franchise	$229,050 – $522,300	$15,000	8+4.5%	$310,000	6-10 years
Del Taco	$862,700- $2,136,500	$35,000	5%+4%	$310,774	7.5 years
Domino’s Franchise	$156,450 to $682,500	$10,000	5.5%+4%	$130,401-$260,802	4-5.8 years
Wayback burgers franchise	$209,000 to $ 638,000	$35,000	5% + 4%		5-6 years

The Franchise Deck rating for the Jimmy John franchise is 3.9/5.0.

 

Conclusion: Should You Buy the Jimmy John’s franchise for Sale?

With so many QSR options available, sometimes all you want is a nice sandwich. This is where Jimmy John’s comes into play. To become a successful franchisee of such a business venture, you must have adequate finances to handle recurring fees such as royalty fees, advertising fees, and potential renewal fees when you open. It can be a good idea to consult an attorney or financial expert to ensure you have the financial means to develop and run a Jimmy John’s franchise.

If you meet all of the qualifications and have a strong desire to provide excellent customer service, opening a Jimmy John’s Gourmet Sandwiches franchise could be in your future. Most interested and qualifying franchisees will have the opportunity to speak with a Jimmy John’s Gourmet Sandwiches representative who will go over your options with you. You might then be on your way to owning your own Jimmy John’s.

At times, the company outperforms the competition by providing exceptional food and service to its guests, while also providing franchise owners with an opportunity to develop a strong business in their community.

Entrepreneurs who want to open a franchise in the sandwiches franchise opportunities can look at

1. McDonald’s Franchise
2. Subway Franchise 
3. Texas Roadhouse Franchise
4. Arby’s Franchise 
5. Jersey’s Mike Franchise
6. Wingstop Franchise
7. Domino’s Franchise
8. Wayback Burgers
9. Krispy Kreme Franchise
10. Firehouse Subs Franchise
11. Krispy Krunchy Chicken Franchise

Facts That Nobody Told You About Jimmy John’s

• It was going to be a hot dog stand originally. 
• It was founded by Jimmy John Liautaud when he was just 19 years old.
• In its initial years, it failed to afford ice. 
• The brand is no longer owned by Jimmy John’s, instead, Inspire Brands owns it now. 
• Drew Brees and Mitt Romney love this place. 
• The company has earlier been accused of wage theft. 
• Their “freaky fast” delivery ended up causing a lawsuit against them. 
• It also became a reason behind food positioning outbreaks in December 2017. 

Jimmy John’s Franchise Information 

Industry Type	Food Franchise Opportunities
Sub Category	Sandwich Franchise Opportunities
Year Established	1983
Company Name	Jimmy John’s
Founder/Management Head	Jimmy John Liautaud
Franchising Started	1993
Franchise Expansion Plan	United States and Canada
Number of Units	2,755
Number of Franchise Units
Social Media Handles	Facebook
	Twitter
	Youtube
	Instagram
Company Office location	Atlanta, Georgia

Frequently Asked Questions (FAQs)

1. Are the Jimmy John’s franchises profitable?

A Jimmy John franchise is a profitable franchise indeed.

2. Can you make money owning a Jimmy John’s?

Yes, a franchise owner can make money owning a Jimmy John franchise. 

3. Is Jimmy John’s a franchise?

Yes, Jimmy John is a franchise. The brand started franchising in 1993. 

4. How much is Jimmy John’s franchise?

To open a franchise, a potential franchise is required to have the following: 

• Initial franchise fee: $30,000-$35,000
• Initial investment: $355,900-$671,400
• Net worth: $1,000,000
• Cash requirement: $2,00,000