Jimmy John's joins growing restaurant roster
An affiliate of Atlanta-based private equity firm Roark Capital Group has signed a definitive agreement to acquire a majority interest in national sandwich chain Jimmy John's. Jimmy John's, founded in 1983 by Jimmy John Liautaud, will reportedly remain headquartered in its birth city of Champaign, Illinois. Liautaud, a college dropout who started the fist Jimmy John's with a $25,000 loan from his father, will continue to help shape the company's strategic direction as Chairman of the Board of Directors and will remain the single largest individual shareholder. James North will continue to lead the day-to-day operations of the business as President and CEO.
Ranked No. 1 on Entrepreneur Magazine's 2016 annual Franchise 500® list, Jimmy John's has more than 2,500 locations and $2 billion in system-wide sales with a new-unit pipeline of more than 1,100 locations to be opened over the next several years.
As part of the transaction, previous partners Weston Presidio will exit after holding a reported 33% stake in Jimmy John's for the past 10 years. The San Francisco-based private equity firm's previous investments have included JetBlue Airways and Wild Oats Markets.
Liautaud was in talks last year to take the company public but unexpectedly shelved those plans in October. “I made the whole Thanksgiving dinner and right before I was going to serve it, I threw it out,” Liautaud said of the shelved IPO plan. There are at least some in the restaurant industry who credit the shelved IPO with flak the restaurant and its founder received following the release of photos last summer that showed Liautaud posing with dead elephants, a rhinoceros, and a leopard. Liautaud, who never denied the photos were of him, was subsequently ridiculed in the media with many reportedly boycotting the chain.
Liautaud, who was quoted to have said “I don’t think my wheelhouse is comfortable in Wall Street,” at the time of the shelved IPO, may been more welcoming of the Roark deal following the hunting photos flak. While terms of the transaction were not disclosed, Roark's presumably strong offer and expertise in growing (Moe's Southwest Grill, McAlister's Deli) and mature (Arby's, Hardee's) brands, was surely appealing.
As I reported earlier this week, a local Jimmy John's franchise group, "Jimmy John’s of Atlanta, LLC," recently announced plans to open a new location in Emory Village later this fall. The Emory Village location, the group's 14th, will bring the chain to about 70 locations in Georgia.
Upon completion of the Jimmy John's transaction, Roark will have invested in 56 franchise/multi-unit brands which generate annual system revenues of approximately $23 billion through 25,000 locations that operate in 50 states and 75 countries.
Roark focuses on franchised and multi-unit business models in the retail, restaurant, consumer and business services sectors. Roark's current holdings include stakes in Arby's, Atkins Nutritionals, Batteries Plus Bulbs, CKE Restaurants (the owner of Carl Jr.'s and Hardee's), Corner Bakery, Driven Brands (the owner of Maaco, Meineke, CARSTAR, 1-800 Radiator and Take 5 Oil Change), Drybar, FOCUS Brands (the owner of Auntie Anne's Pretzels, Carvel Ice Cream, Cinnabon, McAlister's Deli, Moe's Southwest Grill, and Schlotzsky's), Il Fornaio, Massage Envy, Miller's Ale House, Naf Naf Grill, Orangetheory Fitness, Pet Retail Brands (the owner of Pet Supermarket and Pet Valu), Primrose Schools, Self Esteem Brands (the owner of Anytime Fitness and Waxing the City) and Wingstop.
