Jimmy John's aims for 1,300 stores

Nov. 02--CHAMPAIGN -- Jimmy John's Gourmet Sandwiches has 1,288 stores open in 41 states and expects to top 1,300 by year's end, the chain's director of real estate says.

Speaking at a regional meeting of the International Council of Shopping Centers in Champaign on Tuesday, Chris Newman said 71 percent of new Jimmy John's stores are opened by existing franchise owners.

Newman said when the Champaign-based chain scouts for new locations, it looks at "holes" in urban markets and at smaller markets that might support a store.

Often, the chain discusses possible new locations with existing franchise owners. But Jimmy John's representatives also talk to civic groups in those areas to "educate the community" about the firm -- and perhaps pique interest from a prospective franchisee, he said.

When asked how much business the chain's "freaky fast" deliveries account for, Newman said 25 to 40 percent on average. But he noted some stores don't deliver, while other stores do 70 to 80 percent of their business in deliveries.

Timing is a factor as well. On football weekends, for example, employees from Jimmy John's corporate office sometimes help make local deliveries, he said.

Newman said deliveries are the "hardest part of the business to grow" because some customers have the mind-set that a single sandwich doesn't justify a delivery.

As for drive-throughs, Newman said, they aren't considered necessary for a Jimmy John's store.

"If you can get it, great, but if not, it's certainly not a deal-breaker," he said.

Most customers don't associate drive-throughs with Jimmy John's yet, he said.

Compared with other chains, which may derive 55 to 60 percent of their business from drive-throughs, the difference a drive-through makes at Jimmy John's is "insignificant," he said.

Newman was asked whether the tighter lending environment has affected the chain's growth.

Newman responded that Jimmy John's has the lowest failure rate on Small Business Administration loans among sandwich concepts.

He said the chain is often able to direct franchisees to a list of preferred lenders if they have difficulty finding financing.

Jimmy John's hasn't made many changes to its menu over time, adding perhaps five or six sandwiches, Newman said. He said he doesn't expect dramatic changes to the menu anytime soon.

When asked whether Jimmy John's faces resistance from local mom-and-pop businesses when it enters a new market, Newman said the usual answer is no.

Typically, a Jimmy John's store provides 25 to 40 full-time jobs, which are welcomed by communities, he said. Plus, the majority of franchisees are "local business men and women."

Newman was among several panelists for the meeting, held at the I Hotel and Conference Center in Champaign.

Another panelist, Dave Hene, senior real estate manager for Supervalu, discussed his company's criteria for Save-A-Lot stores.

He said Save-A-Lots are typically 15,000 to 20,000 square feet, and it's sometimes difficult to find available buildings that size.

The stores carries a "limited assortment" of groceries for people who are "often at or below poverty lines," he said. Save-A-Lot tries to serve them by "being simple and straightforward" in its concept, he added.

Mike Mallon, the council's state director, said he's hearing from members that retailing is on the rebound, particularly among discounters. Save-A-Lot, Aldi, Dollar Tree and Dollar General all seem to be expanding, as do several "quick casual" restaurant chains, he said.

Jill Guth of Champaign-based JSM Development said a regional restaurant chain is expected to announce in a few weeks that it will move into the former Sandella's space in Gregory Place on South Gregory Street in Urbana. She did not identify the chain.

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