How One Restaurateur Scales His Franchise for Success

Jordan: Before setting foot into the Jimmy John’s world, you were a teacher. What practices did you bring from your teaching background, and how did those aspects help grow your business?

Dan: First, I brought patience. I taught kids with learning disabilities for six years. And, second, I brought the ability to instruct. Most fast casual, quick-service restaurants are hiring people who are getting their first job, and parents sometimes do a great job of preparing their child for their first job, and sometimes they don’t.

I once had an employee who was 18. I asked him to clean up a mess that a couple of toddlers had made, and he grabbed a broom. But he put his hands next to each other like one would when gripping a baseball bat. I had to go over and teach him—I asked, “Have you ever used a broom before?” And he replied that, no, he hadn’t. So I explained to him that it’s more of a hockey-stick grip than a baseball grip—it helped him.

He was 18 and didn’t know how to use a broom. The experience of being a teacher helped me look at that and not be confused, but to instead see how I could help this kid get what he needs out of the situation and then help him take things to the next level.

Jordan: How many staff you manage across all of your locations?

Dan: I have 1,054 employees

Jordan: And, on the Spin the Planet site [note: Spin the Planet is an internal portal for Dan’s employees. The site serves as an electronic filing cabinet for policies, procedures, and forms], it says that all employees have access to your personal phone number. So, is it true that all 1,054 staff members have your phone number and could call you any time?

Dan: Yes. Absolutely. Every single one of my stores has a poster in it with my picture, my HR manager’s picture, and my director of operations’ picture, and lists our phone numbers and email addresses.

The poster is there to serve as a reminder that, if for any reason, an employee isn’t getting the support or help they need from the people they work with in the store, they should never hesitate to contact these three people.

Employees will reach out for HR issues, for payroll questions, or for pay stubs when buying a house. Sometimes it goes right to HR if it’s an HR issue, or if their manager can’t answer the question. Sometimes it’s simple stuff like that, and sometimes it’s a bigger issue, like if there’s a conflict of interests or if someone’s said something inappropriate. Either way, everybody’s got my phone number.

Jordan: Let’s talk about gathering feedback. You run a very transparent organization. With that many employees, do you have a one-on-one feedback loop or review process in place? How do staff share feedback with you?

Dan: Yes, it’s very transparent. We meet with all the GMs and most of the assistant managers every 28 days. We go over results, policy changes, anything that might be new and up and coming, as well as any changes that the brand has made.

It’s an opportunity for them to let us know how they’re doing, how they’re operating their business, and what their struggles are. It’s also a chance for them to interact with the rest of the GMs. It’s an environment where they can challenge each other and boast a bit about how well sales are going. They can also ask for help if they’re struggling. All of our managers have those highs and lows, so they have the opportunity to share their learnings and experiences with each other.

I have an employee who’s been with me since three months into my first store 16 years ago, and he’s held a number of different roles. He started as a sandwich maker, then became a shift leader, an assistant manager, a general manager, then area manager…and now his official title is the Love, Hugs, And Smiles Guy.

The Love, Hugs, And Smiles Guy goes out into the stores and in some cases, he’s providing support where they’re struggling. But, most of his days he’s going into stores that are doing really, really well, and he’ll literally pat that manager on the back and say, “I’m here to tell you what an awesome job you’re doing, and I’m really proud of you, and I love the results you’re creating.” And then he’ll work with them to ease up the day.

He might do some slicing, he might do some food prep, he might do some cleaning, and he might give them a couple hours off. He’ll run the shop while the manager runs errands or goes to a movie. So, that’s another way where we’re able to collect feedback, while the managers get that positive reinforcement—the company’s recognizing their achievements.

Jordan: Is the Love, Hugs, And Smiles Guy your own creation?

Dan: I follow what Jimmy [note: Jimmy John Liautaud is the owner and founder of Jimmy John’s Sandwiches.] does as closely as I can. So, Jimmy created the Love, Hugs, And Smiles Guy position before I did, so I just copied him—he gets the credit for that!

Jordan: Do your best employees come from internal referrals?

Dan: Yes. Absolutely. About 85 percent of our managers started working for us as Sandwich Makers and Drivers.

Jordan: How is the employee career path mapped out? Is it after they’re there for a certain amount of years, or…?

Dan: No, no, no. It’s not years, not tenure, not, “get in line behind the guy we hired yesterday.” None of that. It’s all about results. It’s all about what that person can do, and what duties can they do. How fast can they learn a menu? How quickly can they make sandwiches correctly? How motivated are they?

So it’s all about that manager. We meet every 28 days. During that meeting, I give 25 percent of that store’s profit to the shop managers if they’ve met their goals with food, labor, and a couple other key metrics. If they’re running the store correctly, according to the processes and procedures of Jimmy John’s, they can easily earn that bonus. And there’s no cap on that—no limit! So the more sales they get, the more money they make and the more we are aligned with running that business the best we can.

Jordan: That’s amazing. Does that also go to the employees, or is that strictly a bonus at the manager level?

Dan: The manager level, which is what motivates employees to become managers. If they don’t want to be a manager, that’s fine. I mean, there’s a lot of people that just want 15 hours a week, or they want to work three hours over lunch Monday–Friday because they’re going to school or because they have kids that they put on a bus and get off the bus in the afternoon, so it works out for everybody.

Jordan: I’m curious: where do you see your restaurants going in the next few years, given what you’ve experienced here. What big changes are coming internally around employees?

Dan: The millennials are interesting kids. There’s an author, Simon Sinek, and he talks about how millennials 6–8 months into their jobs start thinking that that they’ll have to quit because they’re not changing the world. For us, we call it “Spin the Planet”—as in, what are you doing to help someone else today? I only know what’s going to happen in my business, and I’m going to continue to champion kids that get up in the morning. They want to make an impact for their fellow employees, they want to make an impact on their customers, and they want to provide a healthy meal while they’re doing it.

Jordan: Why can’t there be more Dans in the world running these places? It seems like the right approach!

Dan: I think there might be more guys a lot like me. My perspective has always been that if I can perform for Jimmy, by opening restaurants and running them as efficiently and effectively as possible, and if I can send more money to Jimmy than any other franchisee, then the business is going to take care of me. He doesn’t owe me anything, but i’m going to do my part. And I follow Jimmy—I’m going to support him as best I can. Then, the people who are following me, if I can support them as well and look out for their opportunities, then I’m naturally going to be in a better place than ever  before. I don’t focus on myself—I’m focused on the guy who’s leading me, and I’m focused on supporting the people who are following me.

Jordan: It seems like an awesome arrangement. You’re talking about how managers know that if they hit their targets, they’ll split bonuses. Meanwhile, Jimmy’s probably thinking, “If Dan kills it, there’s something more that I’m going to do for him.”

Dan: Once, he [Jimmy] challenged me to build a store for the least amount of money. He wanted to learn how to save franchisees money on build-out costs, and wanted to know how low of a cost I could build a Jimmy John’s for. He gave me a couple rules: I had to use the same equipment and the same POS system.

I built the store, and it’s the only Jimmy John’s that doesn’t accept cash, and it doesn’t have phones for customers to call orders in. We do 35-40 percent of our business in delivery, but customers can use the app or website to place orders. Online ordering removes phones from our stores—one less distraction—and it keeps me from managing labor focused on answering calls. Plus, many more people prefer to order online, especially the younger generation. All these things make it easier to not have cash.

Cash takes longer than credit, poses a security risk, and bank trips take time. It’s cheaper on a hard cost, but on a soft cost, with all the work involved in managing cash, it’s cheaper to not take cash.

Jimmy’s given me these opportunities to try these things because he knows I’m completely committed to making his business as successful as possible.

Jordan: Let’s talk about your staff. No matter where you go, there are people who work well together and people who don’t. How you can measure that? How do you ensure that great people are on your front line and are paired up?

Dan: It’s normal that you’ll find people who don’t work well together. You’ll also find people who work really well together.

We have a lot of stores, and we have an area manager for each store, and that area manager is in several stores a day. If there’s conflict, there’s often an opportunity to transfer an employee from one store to another store that’s just a couple miles down the road.

Additionally, we have a training program—an online, developed-by-me training program—that every employee can access. It houses a number of categories where they can, on their own time, demonstrate that they understand the menu and our basic requirements, and then the manager is able to see those results.

The manager will print the results and post them to show who understands the culture, menu, and what makes our culture work at Jimmy John’s. If someone is unwilling to participate in that, it’s a good indicator for the manager to let them know that the employee isn’t the right fit.

Jordan: Your investment in your employees shows—you created training modules to help them advance.

Dan: From my teacher point of view, I said, “Look, I don’t want to stop learning, and I don’t want employees to stop learning. I don’t want them to feel like there isn’t anything to learn or gain or figure out.” I wanted to create an environment where employees can find ways to make themselves better.