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Jimmy John Liautaud Embraces New Role

Every Wednesday is tasting day at Jimmy John’s headquarters and Jimmy John Liautaud is the top taster. Jimmy doesn’t wear a fancy suit to work; instead he looks like a regular guy in jeans and an untucked shirt. This week he’s trying ten sandwiches, six deli meats and new cookies. The first baguette passes the smell test and Jimmy promptly takes a bite, chews it up and then spits it out.  “I don’t want all these calories,” he said. “Look at me — I work hard and I’m already 300 pounds.”

The bread passes his standards, so he moves on to a new white chocolate chip for cookies but isn’t impressed.

“That chip sucks,” he said and spits it out.

It’s been 35 years since Liautaud opened his first Jimmy John’s shop in a converted garage selling four different sandwiches and Cokes for 25 cents. Since then, Jimmy John’s has grown into a national chain with over 2,800 locations.

Jimmy’s young life was filled with stress and financial insecurity.  His mother, a Lithuanian immigrant, taught elementary school and his father was an entrepreneur who filed for bankruptcy when Jimmy was 8 and 12. Jimmy remembers those years well because the family would switch to powdered milk to save money.

“Powdered milk sucks,” Jimmy said.

Liautaud’s teenage years were difficult; he graduated second-to-last in his high school class and was “a fat kid.” Upon his high school graduation, his father,  who’s plastics-molding firm was now doing well, wanted him to go to the Army, but Jimmy wanted to start a business. His dad made him a deal. He’d loan him $25,000, but if the business wasn’t successful after one year, he’d join the Army.

Jimmy originally wanted to open a hot dog stand, but the start-up costs were too high, so he settled for starting a sandwich shop. The first Jimmy John’s store opened the day after Liautaud’s 19th birthday near a cluster of bars a few blocks from Eastern Illinois University. At the time, Jimmy owned 52 percent of the business and his father owned the other 48 percent.

To build his customer base, Jimmy delivered sandwiches to dorm rooms for a 25-cent fee. To grow  the business, Jimmy worked 18 hours each day and taught himself how to handle the finances. A year after opening, Jimmy had made a $40,000 profit, which he split with his dad. A year later, Jimmy paid his dad back the original loan, with interest, and became the sole owner of Jimmy John’s.

In 1986, Liautaud opened a second shop near Western Illinois University and then expanded to Champaign, Illinois, now home to Jimmy John’s headquarters. By 1994, Jimmy had ten stores that were making $1 million in gross profit each year and he began selling franchises. The menu remained simple and Jimmy implemented systems with checklists. He also required standardization in his restaurants, from the size of refrigerators to where sinks are placed.

“Pilots that use checklists typically live longer than pilots that don’t,” he said.

Jimmy expanded his holdings in 2005 when he sold a portion of Jimmy John’s to Weston Presidio, a private equity firm in Boston. He used the profits to give bonuses to some of his original employees and made lucrative personal investments. Business continued to grow, but Jimmy began to reach his limit when he had more than 2,000 stores under his domain.

“I felt like I was running out of bandwidth,” he said. “It was getting so big and so complex.” Liautaud began looking for a partner to help him make Jimmy John’s grow and prosper. He found that in Roark Capital and now they handle the business details and data. “I don’t even know how to spell ‘data’”, Jimmy jokes.

Liautaud’s role at Jimmy John’s focuses on food and culture and he’s enjoying it!  — He focuses on continuing to build and create the personality of the company’s brand without the stresses of consumer data and advertising campaigns.

“I’m in an incredible position,” he said. “[I] built it up until I couldn’t do it anymore and brought in a partner that I felt could help me. That’s really the story of Jimmy John’s and here I am.”