Jimmy John's franchise moves up national lists

CHAMPAIGN — Jimmy John's Gourmet Sandwiches is taking a "freaky fast" ascent up Entrepreneur magazine's Franchise 500 list.

The Champaign-based franchise, founded by Jimmy John Liautaud, ranks No. 5 on the magazine's 2014 list, up from No. 12 last year. That compilation is based mainly on financial strength and stability, growth rate and size of the system.

The chain also remains at its highest spot on Entrepreneur's list of the fastest-growing franchises, placing No. 8 this year, the same as last year and up from No. 11 in 2012.

According to the magazine's website, Jimmy John's has 1,872 locations — with 1,844 of those franchise units and 28 of them company-owned.

That's up from 1,772 total locations in 2013.

Jimmy John's, meanwhile, reports at its website that the chain now has more than 1,900 locations.

The only companies ranking ahead of Jimmy John's on the Franchise 500 list are list-topper Anytime Fitness, followed by Hampton Hotels, Subway and Supercuts.

Hampton Hotels and Subway are no strangers to the list. The hotel chain topped the chart the previous three years, and Subway held the No. 1 slot in 2007, 2009 and 2010.

Though financial strength, growth and size are the primary determinants for the list, Entrepreneur considers other factors in selecting the Franchise 500, including number of years in business, how long a company has been franchising, start-up costs, litigation, percent of terminations and whether the company provides financing.

Two factors Entrepreneur says it doesn't consider in determining the Franchise 500 are franchisee satisfaction and management style.

Ranking ahead of Jimmy John's on the fastest-growing franchise list are: Subway, 7-Eleven, Mac Tools, Jan-Pro Franchising (a commercial cleaning franchise), Dunkin Donuts, Cruise Planners-American Express Travel and Vanguard Cleaning Systems (also a commercial cleaner).

Those rankings are based on the number of new franchise units added in U.S. and Canada between July 2012 and July 2013.

According to Entrepreneur.com, all Jimmy John's units are in the U.S. — so unlike 7-Eleven, Subway and Hampton Hotels, the gourmet sandwich chain does not appear on Entrepreneur's list of top global franchises.

Jimmy John's has a virtual national presence.

The only states not listed on the Jimmy John's restaurant locator site are Alaska, Hawaii and five states in New England — Maine, Vermont, New Hampshire, Massachusetts and Connecticut. A company spokeswoman, Mary Trader, confirmed that Jimmy John's has locations in 43 states.

Liautaud founded Jimmy John's near the Eastern Illinois University campus in Charleston in 1983 when he was 19 years old. He began franchising in 1993. Bread is baked daily at each store, and sandwiches are made fresh to order in 30 seconds.

According to the Jimmy John's franchising site, you must have a $300,000 net worth and $80,000 in liquid assets to become a franchisee.

Entrepreneur.com said the total investment ranges from $300,500 and $489,500, but Jimmy John's site lists the initial investment (excluding real estate purchase costs) as $330,500 to $519,500.

Both report the Jimmy John's franchise fee as $35,000 with an ongoing royalty fee of 6 percent. Franchise agreements run for 10 years and are renewable, according to Entrepreneur.com.

Jimmy John's says it typically takes six to eight months to open a store after signing a franchise agreement.

The company provides franchisees with seven weeks of training for general managers and three weeks of training for assistant managers. The seven weeks of training includes four weeks of "real-life management experience" in an apprenticeship program at a franchise store.

Twenty employees are needed to run a franchise unit, and absentee ownership of a franchise is not allowed, according to information submitted to Entrepreneur. Fifty percent of Jimmy John's franchisees own more than one unit.

Jimmy John's warns prospective franchisees that "you've got to take specific, detailed and disciplined direction extremely well."

The company describes its culture as "do it now, make it happen, be a go-getter, no excuses. Jimmy John's employees ... don't mind doing whatever it takes to get the job done. Their hustle is part of how they live their daily lives, and they enjoy the fruits of a hard-earned entrepreneurial lifestyle."

The company also maintains the chain has "grown up" in the last few decades.

"The irreverent attitude, low price, great food and delivery with a smile remain the same, but what was once the bratty little brother of the sandwich industry is now the super cool older brother that everyone else wants to be," the chain states on its website.

The top 10 on Entrepreneur's Franchise 500 list for 2014*

1. Anytime Fitness

2. Hampton Hotels

3. Subway

4. Supercuts

5. Jimmy John's Gourmet Sandwiches

6. 7-Eleven

7. ServPro

8. Denny's

9. Pizza Hut

10. Dunkin Donuts

* — Based on financial strength and stability, growth rate and size of system, based on data from July 2011 to July 2013.

Also considered: years a company has been in business, how long it has been franchising, startup costs, litigation, percentage of terminations, whether the company provides financing.

Jimmy John's rankings on the Franchise 500 list:

2014 — No. 5

2013 — No. 12

2012 — No. 22

2011 — No. 38

2010 — No. 61

2009 — No. 53

2008 — No. 57

2007 — No. 58

Entrepreneur's 10 fastest-growing franchises for 2014**

1. Subway

2. 7-Eleven

3. Mac Tools

4. Jan-Pro Franchising

5. Dunkin Donuts

6. Cruise Planners-American Express Travel

7. Vanguard Cleaning Systems

8. Jimmy John's Gourmet Sandwiches

9. Great Clips

10. Pizza Hut

** — Based on new franchise units added in U.S. and Canada between July 2012 and July 2013.

Jimmy John's rankings on the fastest-growing franchises list:

2014 — No. 8

2013 — No. 8

2012 — No. 11

2011 — No. 15

2010 — No. 21

2009 — No. 23

2008 — No. 29

2007 — No. 38

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