CHAMPAIGN – Dan Mall was doing part-time landscaping and maintenance work for Fox Development when Peter Fox tapped him to help run a new Jimmy John's franchise.
That was in 2001, when Mall was getting ready to graduate from the University of Illinois.
Nine years and 18 stores later, Fox and Mall's franchise has been named Operator of the Year by the Champaign-based sandwich shop chain.
Their franchise – Fox JJ Acquisition – has 10 stores in the Raleigh, N.C., area, where Mall lives. They also have one in Charlotte, N.C.; three in Columbia, S.C.; one in Spartanburg, S.C.; and three in Bloomington, Ind.
Jimmy John's won't say precisely how the franchise ranks among its franchisees in terms of stores, but acknowledges "they are in the top 10 for sure." Fox and Mall say they believe their franchise is the third-largest in the nation in terms of stores.
And Fox – better known in Champaign-Urbana as co-developer of the University of Illinois Research Park – says he intends to grow the franchise to 50 stores within three or four years.
Altogether, the chain, founded in 1983 by Jimmy John Liautaud, has 985 stores nationwide – 963 franchised stores and 22 corporate units. Franchise opportunities are still available in 39 states.
Fox and Mall's franchise won "Operator of the Year" honors on the basis of restaurant audit scores given by Jimmy John's business coaches. The franchise's average unit audit scores were the highest in the chain, according to an e-mail from Liautaud.
Mall, 30, hails from – of all places – Sandwich. He earned bachelor's degrees in political science and natural resources from the UI, and while in school, began working for Fox after class and during summers. He was 19 when he started.
Mall was a high school wrestler, and Fox said he thought of wrestlers as disciplined because they had to meet weight limits.
"He had an incredible work ethic for a young person. He had great values from his parents," Fox said of Mall. "He was always positive and disciplined."
Mall said he was weighing post-college options when Fox broached the idea of getting involved in a Jimmy John's franchise.
"It struck me as funny when he told me he wanted to do that because I knew the menu," Mall said. "I absolutely loved Jimmy John's. I ate there once or twice a day."
Mall got training from Jimmy John's in Champaign, then went to Lawrence, Kan., where he trained for four months under James North. Today North is president of Jimmy John's in Champaign.
Soon after the training, Fox bought two Jimmy John's stores in Bloomington, Ind., and dispatched Mall there in 2002 to run them.
It wasn't Fox's first foray into the restaurant business. During the 1980s, he had the local Wendy's Old-Fashioned Hamburgers franchise, and he teamed with Eric Faulkner to help him buy the Original Pancake House in Champaign.
Fox said he bought the Jimmy John's franchise because "I had gotten to know Jimmy and felt that it was a great concept.
"If you go into the stores, they're generally immaculate, and they're highly efficient in terms of space, design and decor," Fox said. "Jimmy is also good about using high-quality ingredients."
Plus, franchisees get "extraordinary support from the parent company," Fox said. "I base that on what I'd seen previously from Wendy's and others."
Although Mall was the operating partner, the franchise was "Peter's investment," Mall said.
"Basically, I own majority control and Dan owns some," Fox said. "He's highly compensated through bonuses and base compensation. The plan over time is that he could acquire more, and could buy full control if that's what he wanted to do."
Mall called the arrangement "a good situation, a sweat-equity thing."
"I don't have to put money up front. It's sweat equity earned through the years. That speaks to Peter's fairness," he said.
Mall said he was comfortable assuming operational responsibility for the stores.
"To be honest, I thought it was fairly simple, and given the simplicity (of the concept) and support, it didn't scare me," he said, noting that Jimmy John's provided advertising, operational and marketing support.
In June 2003, the franchise got the opportunity to buy two North Carolina stores in Chapel Hill and Durham, and Mall moved to North Carolina. The partners expanded operations in that state, and acquired two stores in Columbia, S.C., in 2006.
When asked how Fox and Mall went about improving operations at stores they acquired, Liautaud said: "They were hungry to learn and grow, never accepting mediocrity. They worked 100-hour weeks to turn the units around, motivated by free enterprise. These guys made the sacrifice and now are harvesting the fruit."
Mall estimates the franchise employs about 575 people, including 50 salaried employees, 75 other full-time workers and about 450 part-time workers.
Fox said he devotes 15 percent to 20 percent of his time to the Jimmy John's business, focusing attention on sales, labor costs and the cost of goods sold.
He said he helps decide on and finance new locations and ratifies major personnel decisions.
Fox and Mall have Jimmy John's locations both on and off campus.
"Seven of the 18 are campus stores," Mall said, noting they serve Indiana University, Duke University, the University of North Carolina, North Carolina State and the University of South Carolina.
Visibility is important, particularly in the Carolinas where the brand is just developing, Mall said. And it's essential to be close to places conducive to lunchtime crowds, such as business parks, high schools and hospitals.
Mall figures that at campus locations, 50 percent of business comes from lunch crowds. But at noncampus locations, lunch probably accounts for 65 percent of business.
"If you're not right on campus, you want locations where you're going to have a great lunch business, and decent business the rest of the day, plus the ability to deliver in the evening," Fox said.
Mall said to be successful, "we always try to push low cost – low cost and great operations." That means "controlling your waste, make sure no one is stealing and watching your labor (costs)," he said.
But the vital factor is the employee base.
"It's the people," he said. "People are the ones who make the margins, make the attitude and atmosphere. It's a pleasure to walk into a well-run store."
Different stores have had different levels of success, Mall said.
"Sometimes we get lucky and we're profitable in the first period. Others, we have to grind it out," he said, adding that in some cases, it's been a couple years before they broke even.
The recession hasn't had much effect on the business, Mall said.
"There are really two ways to look at it," he said. On one hand, people aren't spending as much money. But on the other hand, "more money is being spent on brands like ours because they've traded down" from more expensive choices.
"2009 was a pretty good sales year – maybe not as good as 2008, but it was a good year," he said.
Mall considers himself "driven." "No one wants to get a 'B,'" he said.
He said he thinks his best business move has been treating employees fairly.
"I think we treat people pretty well. I'm proud of the tenure of the people who have stayed," he said. "Treating people fairly – ultimately, that's what has allowed us to grow."
As far as what he'd like to do better, Mall said he wants to get a better understanding of the construction of new stores.
"I haven't had a lot of experience in the build-outs," he said, adding sometimes he feels he overexpanded on new stores.
Mall called the sandwich-shop business "a 24-7 thing," with some stores open until 3 or 4 a.m., and some employees coming in as early as 5 a.m. to do food preparation.
He said he goes to the Indiana stores once or twice a month and also makes regular visits to the South Carolina stores.
"The best part of the job is making the sandwiches and interacting with the customers," he said.
1,000th Jimmy John's to open
CHAMPAIGN – Jimmy John's Gourmet Sandwiches expects to open its 1,000th store in the next month or so, company founder Jimmy John Liautaud said.
"We open a restaurant every other day, seven days a week, 365 days a year," Liautaud said in an e-mail to The News-Gazette. "The pipeline is full through 2013."
The Champaign-based company recently announced it has 985 locations in 39 states. The chain was founded 27 years ago, with Liautaud's first store in Charleston.
Liautaud said to get a Jimmy John's franchise, entrepreneurs must show a "great positive attitude, high integrity, a willingness to work ... and blame nobody for the pain."
He emphasizes the work and pain.
"The economy has kicked our butts, and we are all working twice as hard for the same money," he stated in the e-mail. "Execution is much harder than talking about it. There are a lot of people who like to talk about how smart they are, and very few who will shut up and do what it takes."