Subscribe to Entrepreneur for $5

How One Sandwich Company Cracked the Franchise Top 10

This story appears in the January 2014 issue of Entrepreneur. Subscribe »

It's easy to get excited about Jimmy John's Gourmet Sandwiches. Walk in to one of the roughly 2,000 shops, and the irreverent signs, unpredictable soundtrack, scent of fresh bread and friendly staff--who really are "freaky fast"--can pep up your day.

But back in 1994, 11 years after he opened his first Jimmy John's in Charleston, Ill., Jimmy John Liautaud was a bit too exuberant about his growing empire--an attitude that he admits led him astray for several years.

"What I assumed at the time was that every person I sold a franchise to would be as enthusiastic about getting up early in the morning and baking bread and custom-making sandwiches and getting a real kick out of it as I did," he remembers. "I started selling to anyone. As long as they had a check and a pulse, I took their money. But by 2000, I realized that our 15 corporate stores were kicking ass, and our 100 franchises were losing money. I didn't understand it at all."

Liautaud has figured it all out since then, and this year his company cracks the top 10 of the Franchise 500® for the first time. It was not an overnight turnaround. In 2000, Liautaud suspended franchise sales and began visiting every unit in his system, evaluating locations and franchisees and weeding out underperforming stores. He improved training and site selection and brought together an experienced corporate team to improve operations.

When Jimmy John's relaunched its franchising program two years later, the process was slow, highly selective and focused on long-term stability, not just on grabbing franchise fees. As part of that, a rule was implemented that the heads of all departments, from operations to marketing to real estate, must sign off on a unit before it moves forward.

Year by year the company has added stores, including 275 in 2013 and another 330 on tap for this year. "We're reaping the rewards of a discipline we started almost a decade ago," Liautaud says. "We're doing things right, and with the right people."

But the strength of the franchise program is not all that's powering growth. The company has distinguished itself in the highly competitive sandwich market through its extraordinary service, its delivery program and a fun, hardworking culture. "I think I'm in the service business," Liautaud says. "I mean, our sandwiches are pretty good; I don't know if they're extraordinary. But our service is."

For Liautaud, that philosophy extends to franchisees as well as to customers. He makes the rounds constantly, visiting stores weekly, giving feedback on what employees and franchisees are doing right and how they can improve.

Going forward, Liautaud has no grand designs, but he says Jimmy John's will continue to plug away at expansion. There's not much reason to mess with the formula--sandwiches, chips, soda, cookies and pickles--that has gotten him this far. "I've never offered coupons or deals. I'm not fancy enough to do soup or salads, hot breakfasts or smoothies," he admits. "Jimmy John's is what it is. We strive for a consistent experience that is consistently good."

Written By

Jason Daley lives and writes in Madison, Wisconsin. His work regularly appears in Popular Science, Outside and other magazines.