Jimmy John’s Franchise in 2024: Costs, Fee & FDD

Jimmy John’s is a well-established name in the world of quick-service restaurants, particularly known for its focus on delivering fast, fresh sandwiches. Founded in 1983 by Jimmy John Liautaud in Charleston, Illinois, the brand quickly distinguished itself with its commitment to using high-quality ingredients, paired with a no-nonsense approach to sandwich-making. Over the years, Jimmy John’s has carved out a significant niche in the sandwich industry, becoming synonymous with speed and simplicity, and is often a go-to for customers seeking a quick and satisfying meal.

At the heart of Jimmy John’s menu are its signature sandwiches, made with freshly baked bread, high-quality meats, and a variety of toppings. The menu is straightforward, featuring classic offerings like the Italian Night Club and the Turkey Tom, which appeal to a wide range of tastes. Beyond sandwiches, Jimmy John’s offers sides such as chips, cookies, and drinks, but it’s the sandwiches that steal the show. The core customer base for Jimmy John’s tends to be busy professionals, students, and anyone who values a quick and consistent meal without compromising on taste.

In terms of scale, Jimmy John’s has grown impressively since its humble beginnings. As of now, the franchise operates over 2,800 locations across the United States, making it a significant player in the quick-service sandwich segment. While the majority of its locations are in the U.S., Jimmy John’s has become a household name in its domestic market, serving millions of customers daily. This widespread presence reflects the brand’s appeal and its effective franchise model, which allows it to thrive in diverse markets.

One of the standout aspects of the Jimmy John’s franchise system is its robust support for franchisees. The company offers comprehensive training programs that cover everything from day-to-day operations to marketing strategies. This ensures that franchisees are well-equipped to maintain the brand’s high standards. Additionally, ongoing support in the form of marketing assistance, supply chain management, and operational guidance helps franchisees succeed. Jimmy John’s also emphasizes a strong corporate culture, with a focus on consistency, efficiency, and customer satisfaction, making it a solid choice for those looking to invest in the quick-service industry.

Jimmy John’s Franchise Insights

1. Jimmy John’s has a growth rate of 1% over the last year, which aligns with the industry median, reflecting its steady presence in the quick-service market.
2. The franchise operates 2,644 locations in the U.S., with 2,604 of these being franchised units, showcasing its strong franchise network and widespread market reach.
3. The total investment range for a Jimmy John’s franchise is between $361K and $674K, placing it in the mid-range investment category for quick-service franchises.
4. Founded in 1983, Jimmy John’s has over 40 years of experience in the industry, starting franchising in 1993, demonstrating a long history of success and expertise.

Jimmy John’s Franchise Key indicators

How much does it cost to open a Jimmy John’s franchise?

Understanding the potential investment size and capital requirements is crucial when considering opening a Jimmy John’s franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.

Min & Max Investment

Opening a Jimmy John’s franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a Jimmy John’s below from the most recent Item 7 below:

Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.

Required Capital

To open a Jimmy John’s franchise, the required capital involves both the initial investment costs and a net worth requirement set by Jimmy John’s. Let’s take a closer look below:

• Initial Investment As shown above, the total estimated initial investment ranges from $361,200 to $674,200. This includes all the startup costs such as the franchise fee, real estate, construction, equipment, initial inventory, and additional funds for initial operating expenses. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
• Liquid Assets Although specific liquid asset requirements for Jimmy John’s are not listed, a common industry standard for quick-service franchises is to have around $100,000 to $250,000 in liquid assets. For Jimmy John’s, a reasonable estimate might be at least $100,000 in liquid assets.
• Net Worth While the net worth requirement isn’t explicitly stated for Jimmy John’s, many franchises in this category require a minimum net worth of $500,000 to $1 million. It’s likely that Jimmy John’s would fall within this range as well, given its investment requirements.

How much does a Jimmy John’s franchise owner make?

Calculating the salary of a Jimmy John’s franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a Jimmy John’s franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.

Jimmy John’s Revenue & Gross Sales

Based on most recent analysis, Jimmy John’s franchises achieved a median gross sales of $927,222, reflecting continued revenue growth. This strong financial performance underscores the brand’s robust consumer demand and potential for significant revenue generation.

Which key factors impact the average revenue performance of Jimmy John’s franchisees?

The performance of U.S. franchisee median gross sales for Jimmy John’s in recent years is likely influenced by several key factors. First, the ongoing economic conditions, such as inflation and shifts in consumer spending, may have impacted sales, as customers prioritize affordability. Additionally, increased competition in the quick-service restaurant space, particularly from emerging sandwich brands and delivery-only concepts, could have contributed to a more challenging sales environment. Operational adjustments, such as changes in menu pricing or supply chain disruptions, might have also played a role. Lastly, evolving consumer preferences, especially towards healthier or more diverse menu options, may have shifted demand slightly away from traditional offerings like those at Jimmy John’s.

Jimmy John’s Franchise Operational Costs

When opening a Jimmy John’s franchise, the key primary ongoing operational costs to consider include:

• Labor Costs Employee wages, benefits, and payroll taxes are significant expenses, especially in maintaining a consistent level of service and speed that Jimmy John’s is known for.
• Rent and Utilities The cost of leasing a prime location and paying for utilities such as electricity, water, and gas will be a consistent monthly expenditure.
• Food and Supply Costs The cost of sourcing high-quality ingredients like meats, bread, and fresh produce, along with other necessary supplies (napkins, packaging, etc.), can fluctuate based on market conditions.
• Maintenance and Equipment Repairs Regular maintenance of kitchen equipment, refrigeration units, and the overall facility is essential to keep operations running smoothly, and these costs can add up over time.
• Insurance Ongoing insurance costs for property, liability, and worker’s compensation are necessary to protect the business from potential risks.

These are some of the critical ongoing costs that will impact the profitability and daily operations of a Jimmy John’s franchise.

Jimmy John’s Franchise Fees

When investing in a Jimmy John’s franchise, it’s essential to be aware of the ongoing fees that contribute to maintaining and growing the business. These fees are a standard part of franchise ownership and support various aspects of the business from operations to marketing. Here’s a summary:

• Royalty Fee You will be required to pay 6% of your restaurant’s weekly gross sales as a royalty fee. This fee supports the ongoing franchise system operations and provides continuous support.
• Advertising and Development Fund You’ll contribute up to 4.5% of your restaurant’s weekly gross sales to this fund, which is essential for national and regional advertising campaigns. Non-traditional locations might pay a reduced rate of 2.25%.
• Cooperative Advertising Programs Depending on your market, you may also need to participate in cooperative advertising programs, which could cost up to 2% of your restaurant’s gross sales.

Additionally, be aware that there might be other fees associated with specific services or additional support provided by the franchisor. Always review the franchise disclosure document carefully to understand all potential costs.

Jimmy John’s Franchise Earnings

Based on the most recent data, a Jimmy John’s franchise with median gross sales of approximately $927,222 can expect earnings for an owner-operator to be around $139,083. The data indicates a steady improvement in performance, which can be encouraging for potential franchisees considering an investment in Jimmy John’s.

While these figures provide a solid baseline, actual earnings can vary depending on location, operational efficiency, and market conditions. Therefore, it’s essential to factor in these elements when estimating potential profits from a franchise.

How to Open a Jimmy John’s Franchise

Becoming a Jimmy John’s franchisee involves a series of steps designed to ensure that both the franchisor and the franchisee are a good fit. Here’s an overview of the process:

1. Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
2. Preliminary Application Once you’ve expressed interest, you’ll be asked to complete a preliminary application. This helps Jimmy John’s evaluate your financial standing, experience, and suitability as a potential franchisee.
3. Initial Meeting and Interview After reviewing the FDD, you’ll have an initial meeting or interview with the franchise development team. This is an opportunity for both parties to discuss expectations and ask questions.
4. Financial Verification and Approval You’ll need to submit detailed financial statements for verification. This step ensures that you have the necessary capital, liquid assets, and net worth to meet the franchise’s requirements.
5. Site Selection and Approval Once approved, you’ll work with Jimmy John’s to select an appropriate location for your restaurant. The site must meet specific criteria and will require approval from the franchisor.
6. Franchise Agreement Signing After securing a location, you’ll sign the Franchise Agreement, officially becoming a Jimmy John’s franchisee. This step requires payment of the franchise fee.
7. Training Program Before opening your restaurant, you’ll attend an intensive training program that covers operations, management, marketing, and more. This training ensures you’re well-prepared to run your franchise successfully.
8. Build-Out and Pre-Opening With your location approved and training completed, you’ll begin the build-out of your restaurant. This includes construction, equipment installation, and obtaining necessary permits. During this phase, you’ll also engage in local marketing and hiring staff.
9. Grand Opening Once your restaurant is ready and fully staffed, you’ll launch your business with a grand opening event. Jimmy John’s often provides support during this critical phase to ensure a successful start.
10. Ongoing Support After opening, you’ll continue to receive operational support from the franchisor, including marketing assistance, supply chain management, and regular evaluations to help maintain the franchise’s high standards.

Pros & Cons

Pros

Established Brand: Jimmy John’s is a well-recognized brand with over 40 years of experience, providing a strong foundation for franchisees.

Proven Business Model: The franchise operates on a simple and effective business model focused on delivering fresh, fast sandwiches, which has consistently attracted a loyal customer base.

Strong Market Presence: With over 2,600 locations in the U.S., Jimmy John’s has a robust market presence, contributing to brand recognition and customer trust.

Cons

Competitive Market: The quick-service restaurant industry is highly competitive, with many players offering similar products, which can impact your market share.

Limited Menu: While the focused menu is a strength, it can also be a limitation, as it may not appeal to customers looking for more diverse options.

Market Saturation: In some regions, the market for sandwich shops may be saturated, making it more challenging to achieve significant growth or distinguish your location from others.