This time its Jimmy John’s turn to bring forth his Gourmet Sandwich chain to Wall Street. After successful IPO’s of its peers in the food industry, Jimmy John’s franchise expects to make it big helped by its immense popularity.
Founded in 1983, Jimmy John’s Franchise LLC is all set to hit the U.S. market with an initial public offering estimated to be worth $2 billion inclusive of debt. Co-owners Jimmy John and private equity firm Weston Presidio have been said to be in talks with various investment banks that will be the underwriters for their IPO expected to be out by the end of this year.
About Jimmy John’s gourmet chain
Founded in 1983 by Jimmy John Liautaud, it is a franchised sandwich chain that has its specialization in delivery of food. The food chain quickly gained popularity and loyal customer base, which took them to growing in more than 2,000 locations in a total of 43 states. The success of the food chain is clear from the record of opening of almost 200 stores per year in the past three years. Out of all the Jimmy John’s stores, 99% are franchisee owned.
There was a major political controversy that arose in 2011 which was about the company’s plan to move its headquarters from Illinois to a rather tax-friendly state. Not only this, there has been another major backlash from the industrial workers of the world who in 2010 attempted to unionize about 10 Minneapolis locations which became quite popular as this was the first time that fast-food workers in America were coming together.
Another major development within the company took place when in October 2014 when Jimmy John announced for all its employees to sign a non-compete agreement as a condition to be employed with the company. This was done to keep the notorious act of competition in check. Under the agreement, employees were not allowed to work with any competitor for two years wherein the competitor was defined as any sandwich business which has a revenue of more than 10% from selling sandwich.
Association with Weston Presidio
Founded in 1991, Weston Presidio is an American private equity firm based out of Boston, Massachusetts with offices in San Francisco. The firm bought 33% stake in Jimmy John’s food chain in January 2007. Since then, the company has completed in total, two recapitalizations.
The beginning of IPO
The annual earnings before interest, tax, depreciation and amortization for Jimmy John came to roughly $150 million. After the successful launch of Shake Shack’s (SHAK, Financial) IPO earlier this year, Jimmy John looks upbeat about its own entry into the market. Shake Shack in particular had been doing quite well since it hit the market. With the launch price of $21, the stock of the food giant now stands at $85.76. Another such success story is of Bojangles Inc. (BOJA, Financial) whose shares have gone up almost 40% since it went public in the beginning of May. Following similarly, another restaurants chain Wingstop Restaurants Inc. is planning to raise up to $86 million through a public float.
Conclusion
The small sandwich outlet that initially opened in a rented garage is now all set to make it big in the stock market. The future for various such food chains looks promising and with past experience by other peers, there seems to be no looking back for Jimmy John.
