Are Jimmy John's Franchises a Good Investment?

Despite offering “free smells” at every location, Jimmy John’s franchises do manage to turn a profit. According to the brand’s 2019 FDD, Jimmy John’s stores saw an average 6.5% net profits on $1.2 million in annual sales. That comes out to a hair under $80,000 per year after a 6% royalty and about 6.5% of sales going towards marketing funds. 

Jimmy John’s demands an initial investment of $314,000 to $556,000, depending on the location. Bear in mind that some Jimmy John’s operators may draw a salary and get work benefits in addition to keeping the profits from the stores. 

If a Jimmy John’s owner paid $500,000 to open a store and realized an $80,000 profit, that’s a 16% return on their investment. At 16%, the Jimmy John’s investment typically beats the stock market (though not bitcoin). Some Jimmy John’s franchises who put in a lower investment or saw higher sales are likely seeing profits near 20% while struggling locations or new locations may be losing money. 

In the franchising business, anything over 15% is pretty healthy. Jimmy John’s isn’t a public company, so it won’t disclose its profits quarterly. The brand’s franchisees are even less likely to share their private data, but a quick look at Jimmy John’s public numbers suggests the franchise is profitable. 

The franchise has more than 2,700 locations, with about 46 of those belonging to the corporation itself. 

The sandwich shop is considerably more expensive than a Subway franchise, whose startup costs range from $116,000 to $263,000. Thousands of entrepreneurs have decided to go into business with Jimmy John’s, and the brand has invested in its own stores about four dozen times. These numbers suggest that Jimmy John’s is doing just fine.