Question

College students nationwide crave and rave about the sandwiches served up at their campus Jimmy John's Gourmet Sandwiches, but what they likely don't know is that the restaurant's founder was merely a fresh-faced high school graduate when he opened the chain's first location.

Using a loan of $25,000 from his father, Jimmy John Liautaud planned to open a Chicago-style hot dog stand in Charleston, Ill. But when he realized the equipment involved exceeded his budget, the 19-year-old turned his attention to dell-style sandwiches, opening the first Jimmy John's outlet in 1983 on the campus of Eastern Illinois University in Charleston.

Liautaud worked open to dose, usually by himself, in what was then a single-unit restaurant serving four sandwiches and 25-cent sodas. He has since grown the Champaign, Ill.-based brand into the second fastest-growing sandwich chain in the United States based on percentage growth in systemwide sales, according to Nation's Restaurant News' Top 200 census. In 2011 systemwide sales reached $1.01 billion, a 30-percent increase from the prior year.

The company currently has 26 corporate units and 1,415 franchised locations, and it continues to expand, opening approximately one new store every day.

Liautaud, who refers to himself as "a 30-year overnight success," didn't have a business plan when he started, and he claims he still doesn't. He attributes the brand's success to keeping it simple and staying informed.

"I didn't have a business philosophy or plan," he said. "What I did do was balance the checkbook every day and keep a bank balance. I was very keen on understanding what drove that balance up and down."

He grew that understanding by listening to Jamie Coulter, then a Pizza Hut franchisee who would go on to lead Lone Star Steakhouse. In 1987, after opening his second and third Jimmy John's units on the campus of Western Illinois University, Liautaud began attending monthly operations-review meetings that Coulter was holding for Pizza Hut franchisees.

"I told him to take notes and not ask any questions," said Coulter, chief executive and chairman of Coulter Enterprises Inc. "After the fourth meeting he did ask me some questions and showed me a financial statement. I was impressed with his numbers. He left with a lot of confidence, and he has just grown into a giant."

As he continued to expand the brand, Liautaud sold the first Jimmy John's franchise in 1994 and made a point to put his time and energy into developing a strong system of franchisees, which he maintains to this day with an intense hands-on approach.

"From my experience, Jimmy's attention to detail is without comparison," said Peter Fox, a Jimmy John's franchisee and part owner of the company, which he bought into when Liautaud sold a 33-percent stake to private equity firm Weston Presidio in 2007.

Fox, who was formerly a Wendy's franchisee and partner at Bear Steams, explained that corporate officials audit each franchised unit every 28 days. That audit includes the findings of a full day spent in the store rating and evaluating every detail. It is a process that Fox cited as drastically different and more involved than the one at Wendy's, and one that Liautaud himself continues to take part in because of mistakes made early in his career.

"I didn't lead by example and set people up to fail," he said. "I thought the definition of a good employee was someone that you didn't have to tell what to do and they just did it. Now I realize a good employee does exactly what you tell them to do."

Meticulous standards outlining how restaurants appear and are managed have helped Liautaud move closer to his goal of having every outlet, regardless of location, provide the same experience, environment and product.

"I really want them to be the same all the time, and I really want to be good at what I do," he said.

For this reason he sticks to a core menu and follows his guiding principles no matter what his competition is doing. While the product line has grown beyond the four original sandwiches--the cold-cut deli sandwich and sub remain the chain's bread and butter--Liautaud has resisted the temptation to add items such as hot sandwiches to better compete with brands like Potbelly Sandwich Shop and Subway.
"He's never deviated from trying to keep it simple," Fox said.

In line with its slogan, "Subs so fast you'll freak," Jimmy John's has also differentiated itself from competitors in the sandwich segment by investing time, training and money in its POS system to make sure that delivery is as quick and efficient as possible.

Liautaud claims to not know how he stands out from his competitors, who he says "are all great." He said he does not spend a lot of time thinking about what others in the business are doing. However, the difference is evident to those around him.

"I talk to Jimmy several times a week," Coulter said. "He just seems to have acquired more knowledge about the restaurant business than most of his competitors, and he executes his concept."

In addition to finance, Liautaud said he learned from Coulter that surrounding himself with good people was as important as anything else. That lesson has prompted Liautaud to eschew large development deals and big money and instead to focus on growing intelligently.

"I have no interest in being the biggest; I want to be the best," he said. "I'm going to focus on the people, focus on the team and focus on the franchisees being successful."

The company, which expanded outside of college campuses in the late 1990s, currently has more than 2,000 units in development. Despite that apparent success, however, Liautaud said he remains focused on keeping his business simple and developing strong business relationships.

"It's kind of old school, and it's not sexy," Liautaud said. "I wish I had a big, macro, super Harvard-Stanford-Yale plan to tell you about, but I just don't have one."

This case is about Jimmy John Liautaud, the founder and CEO of Jimmy John’s Gourmet Sandwiches and the evolution of his business. He began in 1983 with a single store. During the 1980s, the number of company owned stores grew, and in 1994, he began franchising. He shares how he built a strong brand so the in-store experience is consistent.

Answer the following questions: When he started his business, did Jimmy have a business plan? What was his focus to ensure success in the beginning? How has Jimmy built such a strong brand such that the customer experience is consistent regardless of location? What types of control are evident in the company’s franchise system?

Answer 1

Answer 1= No there was no business plan at the beginning of the business. The main focus of the business was to check the balance and cost so that the business remains up and running.

The main reasons for a strong brand name were the hard work, the philosophy of being simple and taking care of the smallest of the detail. He was very upbeat and looks at every aspect of the business. His focus was not to expand the business to the greatest limit but to be the best in the business in terms of product quality and service.

The customer experience was made of the highest class by having dedicated people who understand the requirements of the customers and serve them with the best service. The focus was on acquiring as much detail about customer preferences as possible. The focus was on training the people so that the product can be delivered as fast as possible.

In a franchise, it is important to maintain the same product and service quality in all the locations so that the customers do not feel the variation in the quality and service. They must have strict adherence of the SOPs and thus audit has to be done regularly