In 1983, Jimmy John Liautaud founded his eponymous restaurant, Jimmy John’s. It now makes over $2 billion in revenue from 2,802 locations in the United States. He used to run the whole show but discovered it had gotten too big for him to manage.
Read more: Jimmy John Liautaud – Wikiquote
He sold a majority stake in it to private equity firm Roark Capital in 2016. The deal placed the value of this restaurant chain at $3 billion. He kept 35% of the stock, making him worth $1.7 billion. He also owns farmland in Illinois and owns shares in Juul.
When he made this deal with Roark Capital, Jimmy John Liatuad gave up overall control of the company. He is now chairman and in charge of food and culture. Roark Capital is a major investor in other restaurant chains such as Arby’s and Buffalo Wild Wings. Same-store sales at Jimmy John’s have declined in each of the past three years. While this indicates changes need to be made, he feels blessed and at peace with his decision.
His dad had served in the army and started two businesses. Both of these failed so his family declared bankruptcy twice, when he was 8 and 12 years old.
He says he had to drink powdered milk and couldn’t stand it. He was a terrible student but did graduate from high school, albeit second-to-last. While he was in high school, though, his dad launched a successful company.
His dad gave him a $25,000 loan to start a business. They agreed that if the company wasn’t successful in a year then Jimmy John Liatuad would join the Army. He opened the first Jimmy John’s sandwich shop in Charleston, Illinois, close to Eastern Illinois University. He learned about finance while on the job. To keep payroll costs down, he had employees arrive in 15-minute increments rather than all at once.
The restaurant earned $154,000 in sales in the first 12 months. He split $40,000 in profit with his father. The next year, he bought out his dad’s position in Jimmy John’s and paid back the loan. Jimmy John Liatuad opened a second location in 1986. He then added a third in Champaign, Illinois, where his company now has its headquarters. In 1994, he was making $1 million a year from each of 10 stores. He started selling franchises that year as well.
He has kept the menu simple at Jimmy John’s, which helps keep food costs down. There are three types of bread, six types of meat, and one variety of cheese. He also put in place systems to keep each location consistent.
There isn’t any variety in things such as where sinks are located or how big the walk-in refrigerators are.
In 2014, Jimmy John’s had 2,000 locations. It was at this point that Jimmy John Liautaud felt it had gotten too big for him to manage. His company had a $100 million ad fund, for instance, and he had no idea how to effectively use that amount of money.
James North had been the long-time president of the company. Jimmy John Liautaud made him the chief executive officer and started stepping away from the day-to-day management of the company he created.