The sandwich fast casual signed deals to grow in Canada and Latin America.
Inspire Brands on Wednesday morning announced two international franchise deals for Jimmy John’s, agreements that will launch the 2,600-unit brand globally. The pair of agreements also marked the first time Inspire, which directs Sonic Drive-In, Arby’s, Dunkin’, Baskin-Robbins, and Buffalo Wild Wings as well, has taken a brand into the international market.
Jimmy John’s is now set to grow in Canada and Latin America. The former will expand through a partnership with Foodtastic, a franchisor that oversees north of 1,100 locations through a collection of brands, including Pita Pit and Freshii, and $1.1 billion in sales. The Latin America deal comes via Franquicias Internacionales, a group based in El Salvador whose portfolio expands from F&B to digital media and logistics.
Inspire didn’t reveal how many locations are expected for either move, but said the news was part of a broader global expansion plan and “will usher in a new way for international guests to enjoy [Jimmy John’s] iconic menu—the ability to order hot, toasted sandwiches as a customization option.”
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“For 40 years, Jimmy John’s has taken a straightforward approach to making ridiculously good, quality sandwiches, and it’s now time to share them with the world,” Michael Haley, president and managing director international for Inspire Brands, said in a statement. “In a global restaurant environment where simplicity is paramount, we’re confident this brand is primed for extensive international growth.”
Jimmy John’s U.S. footprint retracted by 26 stores across 2022 but did see AUVs inch upward from $866,000 to $900,000. The brand closed 2022 with systemwide sales of $2.364 billion, 2,597 franchised units, and 40 corporate stores.
Inspire acquired the brand in October 2020 for an undisclosed amount, transferring the business from one entity of Inspire-backer Roark Capital to another (Roark bought a majority stake in 2016). It followed Arby’s Restaurant Group’s $2.9 billion deal for Buffalo Wild Wings—which launched Inspire—in February 2018 and a $2.3 billion Sonic Drive-In purchase in December 2019. Dunkin’ Brands came roughly a year after Jimmy John’s for $11.3 billion—the highest-dollar restaurant acquisition since 3G Capital LP, Burger King Worldwide Inc., acquired Tim Hortons for $12.64 billion in August 2014.
Although Wednesday’s announcement signaled Inspire’s opening swing to take a brand global, it’s no stranger to operating overseas. It currently boasts an international presence of more than 9,900 locations. Haley joined the Sandy Springs, Georgia-based restaurant group in January 2021. His prior stop was in London as chief partnership officer of Pret A Manger, where he held global responsibility for Pret’s Partnership shops. Before, Haley spent more than 14 years with Starbucks in Seattle, Amsterdam, and London. There, Haley led the development for Starbucks licensed and franchised stores across Europe, Middle East, and Africa.
Inspire told QSR previously international was one of the company’s widest growth opportunities going forward (overall, the 31,700-unit group believes each one of its brands has room to double in size). Of those nearly 10,000 international restaurants, over 5,000 belong to Baskin-Robbins alone. Dunkin’, in one example, was recently riding same-store sales growth of 20 percent-plus for 20 consecutive months outside the U.S. As a company, Inspire hosted more than 800 new restaurant openings internationally in 2021. Dunkin’s 600 or so Saudi Arabia locations are comparable to what you’d find west of the Mississippi.
On October of last year, Shahia Foods Limited Company, a company that runs more than 700 Dunkin’ units across Saudi Arabia, Bahrain, and Germany, opened a record 30 Dunkin’ restaurants in one day in Saudi Arabia, an unprecedented number in the brand’s 73-year history.
Inspire also opened its first Saudi Arabia Arby’s this past May, which broke sales records.
Speaking specifically to Jimmy John’s and Canada in particular, the market has suddenly become a hotbed for quick-service sandwich growth. Firehouse Subs parent Restaurant Brands International, which also owns Burger King, Tim Hortons, and Popeyes, had 63 Canadian locations as of July, with 100 percent of those in Ontario. The brand said in an interview with QSR there was ample room to spread from that base and into Western Canada and Atlantic Canada (RBI’s main HQ is in Canada). The company in November shared it was headed to the Western part of the country for the first time and planned to be “in every province in Western Canada by roughly the end of Q1 of next year.” The goal being to open seven new locations across Alberta, British Columbia, Manitoba, and Saskatchewan through early 2024. And, ultimately, “hundreds of locations in Canada,” a market where sister brand Tim Hortons touts over 4,000 units.
Subway has roughly 3,000 locations in the country.
Additionally on Wednesday, Jersey Mike’s announced an area director and development agreement with Redberry Restaurants, one of Canada’s largest restaurant operators. Redberry signed on to open 300 Jersey Mike’s across the country by 2034 through a combination of Redberry-owned-and-operated stores and supported franchise locations. That deal marked the first major international expansion for Jersey Mike’s in its 68-year history. Redberry plans to acquire two existing Jersey Mike’s stores in Kitchener and London and open five new venues in Ontario this year. The two purchased restaurants will be remodeled early in 2024.
Redberry owns and operates 180-plus locations under the Burger King and Taco Bell banners. With the Jersey Mike’s deal in place, the company has deals signed to expand by 600 locations. Jersey Mike’s expanded by 1,055 restaurants in the last five years and seen AUVs jump from $824,00 in 2019 to $1.210 million at 2022 exit. The company plans to reach 10,000 stores.
SOURCE: QSR Magazine