How Much Does Jimmy John’s Franchise Cost?

Want to franchise a tried and tested food business? Why not franchise a Jimmy John’s?

Jimmy John’s is popular for their delicious sandwiches. They also consider making deliveries as their specialty. With a limited product line, 7 types of meat, 2 types of bread, and 1 type of cheese making 25 different sandwiches, it is quite easy to operate compared to other food businesses.

In 2011, CNN Money listed Jimmy John’s as one of the 10 great franchise bets. Now, they have over 2,700 stores all over the country, and they continue to grow.

Do you want to know more about Jimmy John’s franchise startup fee? Read on and see how this deal can be the one you’re waiting for.

Jimmy John’s Franchise Average Cost

To open a Jimmy John’s franchise, you will need $80,000 in non-borrowed personal resources. The resources could be in the form of cash, marketable securities, stocks, or others liquid asset. The applicant’s net worth should also be at least $300,000 to qualify.

The upfront fee of the Jimmy John’s franchise is from $30,000 to $35,000. This initial franchise fee is paid lump-sum to the Jimmy John’s. The ongoing franchise expenses, on the other hand, are the following:

  • Royalties – 6%
  • Advertising – 4.5%

The ongoing franchise expenses are based on gross sales. It is to be paid weekly via bank transfer to the Jimmy John’s franchisor, SPV, LLC.

The total estimated initial investment to acquire a Jimmy John’s franchise ranges from $329,500 to $557,500.

Inclusions

The initial franchise fee of the Jimmy John’s franchise is the payment for the use of the brand name. It also serves as the franchisee’s contribution-payment for the franchisor’s expenses incurred in training, recruiting, and gaining experience, among others to build-up the brand.

The fee can also be considered as payment for joining the franchise system of Jimmy John’s. The amount is due upon the signing of the franchise agreement.

Other Costs to Consider

The following are other necessary to open the restaurant on top of the Jimmy John’s franchise startup fee:

  • Real Estate Costs – You will need an area of 600 to 1,800 square feet with a minimum frontage of 20’ for the restaurant. For further details on the location, site criteria and lease terms, check out the company’s guidelines.

The estimated rent is from $2,500 to $8,000. For the security deposit, expect to pay the same amount. The payments will be made to the owner of the real estate property.

  • Leasehold Improvements – To complete your restaurant’s Jimmy John’s look, expect to pay for the needed improvements in the property including floor covering, wall treatment, counters, ceilings, painting, window coverings, electrical, carpentry, and similar work, and contractor’s fees. The expenses can range from $100,000 to $200,000.
  • Furniture, Fixtures, Signage, Equipment 

The restaurant also needs ovens, point-of-sale system, computer, stereo, telephones, signage, and a video security system.

All these may cost from $107,500 to $166,000. If the restaurant has a drive-thru, expect additional expenses. 

  • Architect – The fee for the architect can be from $5,000 to $10,000.
  • Office Equipment – The following are needed: chairs, desks, and a safe. These are estimated to be around $2,500.
  • Utility Deposits – To install the necessary utilities (telephone, gas, electric, and others), you will be required to pay for deposits. The deposits can range from $1,000 to $2,000.
  • Opening Inventory & Supplies – For quality inventory and supplies, Jimmy John’s has designated and approved suppliers of meats, cheeses, bread, and vegetables, among others. The cost of the opening inventory of supplies is $6,000.
  • Grand Opening Events – Although a grand opening event is not required, if you choose to have one be prepared to shell out $3,000 to $5,000 for payment of newspapers and radio advertising as well as the cost of promotional items. If a grand opening is to be conducted, the company recommends that it is scheduled for 90 to 120 days after the opening.
  • Training Expenses – There is a 7-week training program for the franchisees. The costs indicated are for that as well as the out-of-pocket costs for 3 personnel. It can be from $6,000 to $15,000.

After the training, the company will continue to support franchisees by providing available retraining and updating of knowledge needed to run the business.

  • Insurance – Any business should be properly covered by insurance. Talk with your insurance agent on the applicable coverages for the business. The annual insurance can be from $11,500 to $15,000.
  • Miscellaneous Expenses – These will be for the fees of the professional advisors such as lawyers and accountants as well as other expenses not covered by the other items. The costs can be from $2,000 to $10,000.
  •  Additional Funds for 3 Months – The fund is for other operational expenses for the first 3 months of the restaurant’s operations. The funds can be from $50,000 to $75,000.

The above costs are due as incurred and the mode of payment is either as incurred or agreed between the franchisee and the party to whom the payments are due.

The costs are applicable when you are developing a new Jimmy John’s restaurant.

It must be remembered that most of these are just estimates and the actual costs will vary depending on the size of the store and the location

Jimmy John's Franchise

Buying Tips

Getting a business franchise reduces the risks of failing. However, before diving in, be sure to have the answers to the following questions:

  • Can you afford the fund requirements? Know if you meet the minimum requirements and if you can handle the funding needed to operate the franchise.
  • Do you have the basic business skills needed? Will you qualify as a franchisee aside from the cost factor? Read Jimmy John’s Who Do We Let Do This Deal to know who they want to be their franchise partners.
  • Does the franchise provide a strong support system? The reason many choose a business franchise rather than starting a new business is the available support system. Having this makes running the business easier.

You can communicate with some of the present franchisees to know their experiences with the business. This way you will get first-hand information of what you will be going through.

Go for a business with credibility and proven track record. Jimmy John’s has that.

Jimmy John’s Franchise Cost Factors

  • Profitability of the Brand – Any would-be business owner is concerned with the profitability of the business. There are numerous restaurants open for franchising and since you will be paying for the franchise fees, choose one that has higher profitability potentials.

Expect profitable restaurants to have higher franchise fees.

  • Return on Investment (ROI) – The shorter the time frame to recover the investments, the better it would be for the business owner. ROI measures this. The shorter, the expected ROI for franchisees, the higher the franchise fees.
  • Popularity of the Brand and Demand for the Product –The more popular the brand and in demand its products are, the more expensive the franchise cost.
  • Track Record – Look at the success of not only the company but also of the franchisees. 
  • Territory Exclusivity – To capture a bigger market, a franchisee may want territory exclusivity. If this is allowed by the franchisor, it could cause the franchise fees to go up because it will limit the number of possible franchised stores in an area.
  • Continuing/Ongoing fees 

What Else You Need to Know

Most of the said expenses discussed will not be applicable if you will buy the assets of an existing Jimmy John’s Restaurant. The total cost of buying the assets of an existing Jimmy John’s Restaurant may be lower or higher than the total Jimmy John’s franchise startup fee. The cost will depend on several factors such as the profitability, cash flow, age, location, condition, and other relevant factors affecting the market.

Do you need financing? If your current funds are not that enough, financing can be made available from third-party lending companies.

When will you open your store? It is estimated that it will take 6 to 8 months from the signing of the franchise agreement for the franchise store to open.

Are you ready to join Jimmy John’s family of restaurants? What are you waiting for? Apply now!

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