Jimmy John’s Gourmet Sandwiches is a restaurant chain based in the United States with more than 1,500 locations in 43 states. Jimmy John’s was founded in 1983 by Jimmy John Liautaud, and today the chain is the privately held company with headquarters in Champaign, Illinois. Most of the locations (98%) are franchise-owned with Jimmy John’s Franchise, LLC, as a parent company.
Today there are no Jimmy John’s foreign units, and all restaurants are located within the United States. According to the Franchise Times Estimate, the 2013 sales of Jimmy John’s Gourmet Sandwiches were 1,263 million USD.
According to the revenue reported by Jimmy John’s, there was an increase of 30.2% of the company’s sales. The restaurants have a high level of unit growth, with reported 17.4% of average annual growth per store.
Today there are no foreign Jimmy John’s locations, and the company has no marketing strategy of expanding its business overseas. Thus, the foreign market entry mode cannot include an establishment of a wholly owned subsidiary.
Considering the fact that Jimmy John’s Gourmet Sandwiches is a company represented in the food industry, the most appropriate option of entering the new market would be buying a franchise.
Franchising can be used for a rapid expansion within the UK market. Jimmy John’s offers a 7 week training program that consists of 3 weeks of theoretical training and 4 weeks of practical training. Thus, the franchisee will receive all the knowledge and experience required to become a successful business.
Usually, it takes about 6-8 moths to open the Jimmy John’s food place from the moment of signing the franchise agreement to the opening day. The applicant will need to have $80,000 in liquid assets and the overall net worth of $300,000 to meet the qualification requirements.
There are 3 types of franchising payments made to Jimmy John's Franchise, LLC:
- Initial franchise fee ($35,000);
- Royalties (6%);
- Advertising (4.5%, which can be re-considered for a UK-based franchise).
Total initial investment excluding the real estate purchase cost will be $305,500-$487,500. According to the April 2013 Franchise Disclosure Document published by Jimmy John’s, the average annual net profit for eighteen franchise-owned Jimmy John’s restaurants is $299,015 with average annual gross sales of $1,431,665 (per one restaurant).
- Price & Positioning
The prices for food and drinks are the following:
* sandwiches can be customized: the clients can order extras: Avocado spread, Bacon, Roast Beef, Tuna, Smoked Turkey, Salami ($0.75 – $3.00)
Overall, there are sandwiches and sides of different prices, sandwiches starting from $3.99. The average food spend is under $15 per person.
Jimmy John’s Gourmet Sandwiches restaurants are positioned as a fast food chain with a focus on providing fast and healthy sandwiches.
Main competitors on the market are McDonald’s, Burger King, Subway, Leon.
Jimmy John’s restaurants offer sandwiches, cookies, chips, pickles and drinks (no alcoholic beverages).
There are following items on the Jimmy John’s menu:
- Plain slims;
- 8” Sub Sandwiches (a sandwich of a middle size);
- Giant Club Sandwiches (a 1/4 pound sandwich);
- The J.J. GARGANTUAN (a big sandwich with salami, smoked ham, turkey breast, provolone, capicola, tomato, onio, etc.);
- Sides (Chips, Cookies, Pickles);
- Drinks (Sodas, Bottled Water).
The clients can also order different types of bread:
- French Bread;
- 7-Grain Wheat;
- Unwich (Lettuce Wrap).
Jimmy John’s offers the catering service to the customers with the following items on the menu:
- Party Platters (15-30 piece platters);
- Party Subs (Sandwiches of different sizes);
- Box Lunches (Any sub or club and sides in a lunch box).
Jimmy John’s restaurants have to be evenly spread throughout the area. Preferably, the place should be near the university campus or in the downtown of a big city to ensure a large number of customers. The restaurant must be easy accessible.
The main goal is to develop a wide ranging and stable customer base. Jimmy John’s target market aims at people who are willing to have a fast and healthy gourmet sandwich.
Most attention is paid to attract college students and on the go workers, who are the main group of Jimmy John’s customers.
Sex: 50% men, 50% women;
Income: lower middle income.
There are 5 main ways the marketing strategy of Jimmy John’s is focused on:
- TV ads;
- Internet and radio advertizing;
- Social networking (Facebook and Twitter);
- Event sponsorships;
Jimmy John’s is a popular franchise-owned restaurant chain in the United States and can be successfully introduced to the market in the UK. The best marketing strategy would be buying a franchise and duplication of Jimmy John’s Gourmet Sandwiches business model.
A franchisee can use the same marketing mix targeting at the same group of customers. A new Jimmy John’s place has to be opened in the densely populated area, preferably with college campuses and business offices in the center of it.
Buying a franchise will let the franchisee sell the same items on the menu, use the same franchising management techniques, and choose the same marketing strategy, which will lead to the successful introducing the new Jimmy John’s restaurant to the UK market.
Branding 101, 2014. Why We Love Jimmy Johns. [online] Available at: http://usscospeaks.com/branding-101-why-we-love-jimmy-johns/. [Accessed 12 April 2014].
FranchiseDirect.com, 2014. Start a Jimmy John's Franchise Business, Jimmy John's Franchise Opportunity. [online] Available at: http://www.franchisedirect.com/directory/jimmyjohns/5713/. [Accessed 12 April 2014].
Franchise Times, 2014. Top 200 Franchise systems. [online] Available at: http://www.franchisetimes.com/pdf/Top-200-2013.pdf. [Accessed 12 April 2014].
Jimmy John's Gourmet Sandwiches, 2014. Franchise Investment. [online] Available at: https://www.jimmyjohns.com/company/franchise/initial-investment/. [Accessed 12 April 2014].
Jimmy John's Gourmet Sandwiches, 2014. Jimmy John’s History, [online] Available at: https://www.jimmyjohns.com/company/history/. [Accessed 12 April 2014].