![]() Instead, Liautaud sought an investment from another private equity firm, which would not only allow Weston to cash out but also provide him with an experienced partner. “I just couldn’t manage serving Wall Street.” “I pulled the IPO because I didn’t want to be a public company,” he says. Liautaud considered a public offering but then reversed course. In the marketing department I had a $100 million ad fund, and I’m like, ‘How do I effectively execute a $100 million ad fund?’ ” Liautaud made president James North, a longtime employee he had met on a hunting trip in Alaska in 1998, the chain’s first CEO.Īround the same time, Weston Presidio was looking to off-load its Jimmy John’s stake. “I felt like I was running out of bandwidth,” he says. By 2014 Jimmy John’s had expanded to over 2,000 locations, and he could no longer control all the parts. Liautaud struggled to keep up with his company’s growth. He wrote checks for $250,000 each to his first three employees and poured much of the remaining cash into farmland and municipal bonds, planning to live off the interest.įor another half-dozen or so years, business boomed, but at some point things became less fun. Without lawyers, they forged an initial agreement, and in 2007 Liautaud sold 28% of the business, netting $130 million after taxes. He selected Weston Presidio, a private equity firm in Boston, after one of its partners came to visit him at home in Champaign. “I knew that if I could make $2 million a year, no matter what happened to Jimmy John’s, I could live my entire life,” he says. In 2005 Liautaud decided to diversify his fortune by selling off a piece of the company. “Pilots that use checklists typically live longer than pilots that don’t,” he says. Store layouts were strictly standardized, from the size of the walk-in refrigerators to the placement of the sinks. Meanwhile, Liautaud implemented systems that ensured consistency at every restaurant. Jimmy John’s started selling franchises that same year, mostly in the heartland states, in order to expand even faster.Īs the business grew, the menu stayed simple-today’s has six meats, three breads and provolone cheese-which set Jimmy John’s apart from the competition and kept food costs down. To create buzz he printed ads with headlines like “PARTY” and, strangely, “NO ZITS.” By 1994 Liautaud’s ten stores were making $1 million a year in gross profit, he recalls, on roughly $4 million in revenue. Liautaud opened his second shop, near Western Illinois University, in 1986, then expanded to Champaign, Illinois, where Jimmy John’s is headquartered. He generated slightly higher figures the following year, then bought his father out for the initial $25,000 loan plus interest. In his first 12 months, Liautaud pulled in $154,000 in sales, netting $40,000, which he split with his dad. “Well, when I wrote the payroll checks, the bank balance went down.” Within months of his grand opening, he began to stagger the arrival times of employees in 15-minute increments rather than have them all arrive at once, saving a few dollars each shift. ![]() “I watched what makes the bank balance go up and what makes it go down,” he says. (Virtually all Jimmy John’s stores still deliver, typically for a flat fee of $2.) He worked 18-hour days and learned basic finance on the fly. To increase his customer base, Liautaud targeted college students and personally delivered to their dorms, charging 25 cents a sandwich. He and his dad split ownership, 52% and 48%, respectively. The first Jimmy John’s store opened among a cluster of bars near Eastern Illinois University in 1983, the day after Liautaud’s 19th birthday. At first Liautaud considered a hot dog stand, but the equipment was too expensive, so he opted for a sub shop set up in a converted garage. He gave his son $25,000 as seed money to start a business, on the condition that he would join the Army if it didn’t take off within a year. “I graduated second-to-last in my class in high school, and I was a fat kid.” By the time he graduated, Liautaud’s father had found success with a plastics-molding firm. “My early years in life were an utter failure,” he says.
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