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How Much Does A Jimmy John’s Franchise Cost?
The Jimmy John’s sandwich franchise has expanded quite rapidly over the past decade, and now operates over 2000 locations in the United States alone. The success of the company has inspired many people to start their own Jimmy John’s sandwich franchises, but what’s it really like to be an owner? Let’s take a look at both the advantages and disadvantages of running your own Jimmy John’s franchise business. Plus, know the Jimmy John’s franchise cost.
Franchise Description
Jimmy John’s is a fast-food sandwich chain that was founded in 1983. The company has since grown to over 2,800 locations across the United States. If you’re interested in starting a Jimmy John’s franchise, here’s what you need to know. A minimum investment of $30,000 is required to open a store.
Jimmy John’s offers three different types of franchises: traditional franchise stores, subfranchise units and delivery/carryout units.
Training Overview
The first step to starting your own Jimmy John’s franchise is completing an initial training program. This program will teach you everything you need to know about running a successful franchise, from making sandwiches to managing finances. The program lasts for four weeks and is held at the company’s corporate headquarters in Champaign, Illinois.
After you complete the initial training program, you will be required to attend periodic seminars and workshops throughout the year.
Territory Granted
When you’re granted a territory, you have the exclusive right to open and operate Jimmy John’s restaurants within that territory. The size of your territory will be based on several factors, including the population density and the number of competing restaurants.
Your initial investment will include the franchise fee, which is $30,000 to 35,000, as well as other costs like real estate, equipment, and signage.
Obligations and Restrictions
Before you can even start the process of becoming a franchisee, there are some things you need to take care of. First, you need to have at least $100,000 in liquid assets. You also need to have a net worth of at least $300,000 and be able to show that you have experience in the restaurant industry. And you can’t have any bankruptcies in your past.
Terms of Agreement and Renewal
The initial term of your franchise agreement is 10 years, with the right to renew for two additional 5-year terms. The total initial investment necessary to begin the operation of a franchised Jimmy John’s restaurant is between $$316,100 and $558,600. This includes a $35,000 franchise fee that is paid to the franchisor.
Did You Know?
Here are a few facts that you’ll find interesting about Jimmy John’s:
- It was founded in 1983 by 19-year-old Jimmy John Liautaud in Charleston, Illinois
- The average unit size of a Jimmy John’s restaurant is 1,500 square feet
- Jimmy John’s offers delivery through partnerships with DoorDash and Postmates
- Their award-winning honey mustard dressing is made from scratch in each location every day
- They hand slice all of their meats at the time they order them
Jimmy John’s Franchise Cost
Your Investment
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $30,000 | $35,000 |
| Real Estate/Rent (1 month) | $2,500 | $8,000 |
| Security Deposit | $2,500 | $8,000 |
| Leasehold Improvements | $97,500 | $200,000 |
| Furniture, Fixtures, Signage, and Equipment (including Computer/ Point-of-Sale System) | $95,500 | $166,000 |
| Architect | $7,500 | $12,500 |
| Office Equipment | $1,100 | $1,100 |
| Utility Deposits | $1,000 | $2,000 |
| Opening Inventory and Supplies | $6,000 | $6,000 |
| Grand Opening Event | $3,000 | $5,000 |
| Training Expenses (out-of-pocket costs for up to 3 people) | $6,000 | $15,000 |
| Insurance | $11,500 | $15,000 |
| Miscellaneous Expenses | $2,000 | $10,000 |
| Additional Funds (first 3 months) | $50,000 | $75,000 |
| ESTIMATED TOTAL (excluding real estate purchase costs) | $316,100 | $558,600 |
Other Fees and Costs
| Type of Fee | Amount |
|---|---|
| Royalty | 6% of restaurant’s weekly gross sales. |
| Advertising and Development Fund | Up to 4.5% of restaurant’s weekly gross sales (currently the full 4.5%). |
| Cooperative Advertising Programs | Up to 2% of restaurant’s gross sales. |
| Successor Franchise | $2,500 |
| 1-week or 2- Week Training Program for New, Additional, or Repeat Trainees | Currently $1,500 (or $2,000 for expelled trainee re-attending); the franchisor may increase this fee and charge up to $5,000. |
| New Training and Additional Guidance or Support | Currently $400 per person per day plus expenses if provided at the franchisor’s location; currently $600 per person per day plus expenses if provided at the franchisee’s restaurant; the franchisor may increase this per-person, per-day fee and charge up to $1,000. |
| Area Manager Training | Currently $2,000; the franchisor may increase this fee and charge up to $5,000. |
| Learning Management System Fee | Currently $59.22 plus tax per restaurant per year, but may change depending on number of Jimmy John’s restaurants participating. |
| Transfer | $7,500 or $12,500 |
| Product and Service Purchases | Varies. |
| Testing | Costs of testing (amount of which depends on circumstances, including supplier’s location, testing required, and item involved). |
| Relocation | $2,500 plus costs and expenses. |
| Computer Systems, Maintenance and Support | Cost of service. |
| Confidential Area Manager Manual | $500 |
| Franchisee Convention | Up to $500. |
| Regional Advisory Council | Council assessments. |
| Audit | Cost of inspection or audit (amount of which depends on circumstances and extent of the franchisee’s noncompliance). |
| Interest | Lesser of 1.5% per month or highest commercial contract interest rate law allows. |
| Non-Approved Restaurant Opening | $2,500 for each day restaurant is open without the franchisor’s approval. |
| Non-Compliance | $250 – $1,000 for deviations from operational requirement/brand standards. |
| Unauthorized Advertising Fee | $1,000 per occurrence. |
| Late Fee | 10% of original amount due but not paid on time. |
| Confidential Operations Manual | $500 |
| Management Fee | $600 per person per day (plus costs and expenses). |
| Costs and Attorneys’ Fees | Will vary under circumstances and depend on nature of the non-compliance. |
| Indemnification | Will vary under circumstances and depend on nature of third-party claim. |
| Liquidated Damages | If the franchisor terminates the Franchise Agreement with cause or franchisees terminate the Franchise Agreement without cause, franchisees must pay the franchisor, within 15 days after the termination’s effective date, liquidated damages equal to the product of (a) the royalties they were obligated to pay the franchisor on the restaurant’s gross sales during the previous 364 days the restaurant operated (b) multiplied by 3 (unless there are less than 3 years remaining in the franchise term at the time of termination, in which case the royalties will be multiplied by the number of years remaining). This doesn’t include other damages to which the franchisor might be entitled due to the franchisee’s actions or inaction. |
| Maintenance Cost Reimbursement | $600 per day plus costs and expenses. |
| Customer Complaint Reimbursement | Out-of-pocket cost reimbursement. |
| Insurance Reimbursement | Out-of-pocket cost reimbursement. |
| Tax Reimbursement | Out-of-pocket cost reimbursement. |
| De-identification Reimbursement | Out-of-pocket cost reimbursement. |
To know more about other franchising opportunities, check out the articles at FranchiseHow!