Jersey Mike’s Subs is a well-known franchise restaurant chain that has grown dramatically from its humble beginnings in New Jersey to one of the nation’s most dynamic brands. The Garden State based chain is one of America’s fastest-growing franchises thanks to their mission to deliver quality products with superior service.
Total Food Service had the chance to speak with Jersey Mike’s president Hoyt Jones on what makes their subs so successful, and what the future holds for the chain.
Tell us about your background and what sparked your interest in the restaurant foodservice industry?
I grew up in South Jersey and spent lots of time going to the Jersey Shore. My career began working on the boardwalk making pizzas as a teenager. I went to college and continued working in the foodservice industry. Along the way, someone suggested that I pursue a Masters in Hospitality, which I did from Purdue in Indiana. While I was out there, I managed a pizza restaurant. After I got married and had kids, I saw there was an opportunity in Philadelphia with Domino’s Pizza. There were only two stores there at that point and it was the very beginning of East Coast growth for the company. I was able to get in rather early and that’s how I really got started with franchises. The culture was great, and I learned a lot.
How did Jersey Mike’s founder Peter Cancro find you?
We met via a friend I knew at Purdue. We had always stayed in touch and then my friend introduced me to Peter in the 1990s. Peter and I started talking about different things and before I knew it, I was part of the team. Jersey Mike’s Subs had a similar culture to Domino’s, and it felt like the right move.
When you went there, what was your agenda?
The vision was to always grow the company. The product had been very similar to what it was back since its inception in 1956. When Peter bought the company, he really never changed the product or service. This model was great, and I recognized that when Peter showed me income statements from some of the stores. I realized that the business model was strong, and I could use that to help it grow. They had some strong franchisees and we were fortunate to grow on that model to bring in some super capitalized franchisees, who also had access to people and knew the restaurant space. From there we went into new markets like Chicago and D.C. Once we got the momentum, we really grew and now we’re just under 1,700 stores with almost 500 franchisees.
What was the key to that dynamic growth?
We knew there were strong markets that we didn’t have any penetration in yet. I was fortunate to bring on some franchisees that knew the market. I was lucky because I had a relationship with a lot of Domino’s owners who had left the system and were looking for the next opportunity. I just happened to have one for them.
Why do you think Jersey Mike’s has been so successful as a business?
I think it’s because we’re selling an authentic East Coast sub sandwich. You know it’s fresh when you place the order, with high-quality meats and cheeses and more. We have a great flavor profile that people love. It’s just a strong recipe for success.
Are you in the quick serve business or in the fast food business?
We do everything when the person orders, so we consider ourselves to be in the fast-casual business like Chipotle or Panera. Customers are looking for quality and value. We offer that plus friendliness.
E-commerce and Amazon has created this decimation of Main Street USA. How has that helped your franchisees’ ability to get into great real estate that maybe you couldn’t get into before?
We want to be next to Starbucks, Chipotle and other stores like that. We want to be in new shopping centers, end cap properties and the like. We find that landlords like us in there because we provide a lot of good value to customers, who want to spend more money.
We’re seeing a lot of vegan and plant-based menus popping up. What are your thoughts on customer tastes and do you chase these trends?
We look at everything and we try not to chase the latest trends. There wasn’t an authentic vegan sub sandwich back in 1956, so we don’t have one. We’d rather look at the quality of the meats and cheeses. We offer antibiotic-free meats and quality vegetables like organic tomatoes and lettuce. We even have gluten-free bread products and are trying to do things that enhance the overall experience for each customer rather than chase something that is most likely going to be some short-term trend.
How does Jersey Mike’s go about figuring out where to open new stores?
We’ve done numerous studies with outside firms that look at where existing stores are, and break it down via demographics and sociographics. We look at how and why those existing stores are successful and then scan the rest of the country where we don’t have stores and then if there is commercial property open. We blend our location decisions on analytics, but we also use common sense to see what will work.
States including Connecticut have raised the minimum wage. What are your thoughts on growing your business with these new wage laws?
Our core business requires four to six people to work the busy lunch rush, so we have a tight nucleus of people. It’s not a lot of labor that goes into our stores. Our approach is to protect that core team by paying higher than minimum wage.
What about the new green and sustainable legislation? How do you balance your commitment to your P&L and being a good neighbor?
Our stores have very little waste as it is, since we don’t use plastic plates or utensils. The subs are wrapped in paper and that’s your plate. We have paper straws and use various things to be more sustainable as much as we can. Peter’s (Cancro’s) daughter just graduated from UC Santa Barbara with a degree in sustainability, so she recently did a big paper for us on the topic.
Jersey Mike’s also has a wonderful program called A Month of Giving. Can you talk about how that started?
It started in Dallas, Texas, when our area director did a promotion to raise some money for Wipe Out Kids Cancer. Many of us thought it was a cool idea, so more stores decided to do it. We raised more than $7.3 million last year, and over $31 million since we started. It keeps growing every year. It’s all driven by our franchisees. They choose a particular charity they want and then donate some of their proceeds to it at the end of the month.
What’s on the agenda for the future?
We’re hoping to build 200 more stores this year and know we’ll reach it if we continue on our current course. We have the potential to get there (or do more). About 80% of our stores are being built from existing franchisees, so they’re obviously making money on the first one to open the new one. We really focus on training for our operators, so that they are successful. There are a lot of neat things happening with technology and we always incorporating that into our business model.
To learn more about Jersey Mike’s Subs and Hoyt Jones, visit their website
All photos courtesy of Jersey Mike’s Subs
