Jersey Mike’s rethinks its restaurants for the on-demand consumer

The company is looking to adjust its restaurants for mobile ordering and delivery as it seeks to maintain its quick pace.
Jersey Mike's

Delivery is changing the sandwich counter.

With online ordering and delivery expected to take a greater share of business in the coming years, Jersey Mike’s has hired a designer to come up with a new design and flow of its restaurants to take those orders into account.

“We really have two different businesses,” Jersey Mike’s President Hoyt Jones said in an interview. “We’re redesigning the stores to ensure it’s a little easier to understand, with a more defined area for pickup for customers ordering [via the] mobile app or for delivery.”

The changes are an important consideration for a chain like Jersey Mike’s, which faces a rapidly evolving consumer as it seeks to maintain the consistently strong growth its experienced in recent years.

Keeping up with technology is a major element. The company is redoing its mobile app, and it has a “fairly significant number” of its restaurants doing third-party delivery. “We want to give franchisees every advantage we can give them,” Jones says.

Delivery, he says, can't be ignored, so the company is going after a piece of it. “It seems like it’s inevitable that everybody is going to have to put a stake in the ground.”

Jersey Mike’s is one of the fastest-growing chains in the country. System sales grew more than 18% to just under $1 billion in 2017, according to Technomic's Top 500 Chain Restaurant Report. That made it the 49th largest chain in the U.S. The company has more than 1,500 locations.

Hoyt Jones, Jersey Mike's

This year, Jones says, Jersey Mike’s expects to generate $1.2 billion in system sales.

Jersey Mike’s, which traces its roots back to 1956, is part of a generation of rapidly growing sandwich chains, including Jimmy John’s and Firehouse Subs, all of which are taking a bite out of market leader Subway—a once-unthinkable event, given the larger company’s historic dominance of the sandwich business.

“Everybody kind of has their own niche,” Jones said. “Jimmy John’s focuses on delivery. Firehouse on hot subs. Subway has the ‘eat fresh’ thing. We just kind of do our own thing. We try to stick to our knitting.”

At least part of that knitting is an annual Day of Giving, which takes place the last day of March, when the chain and its franchisees donate 100% of sales to charity. This year, the chain raised $6 million that was donated to 170 different charities. Over the past six or seven years, Jersey Mike’s has raised $24 million.

Individual markets pick the charity that receives the stores’ sales, such as a children’s hospital or the Make-a-Wish Foundation.

Jersey Mike’s restaurants get busy during the event, and they are still busy in the couple of weeks afterward. “The halo probably goes for a couple of weeks,” Jones says. “It’s a pretty intense month for us.”

Jones believes the chain’s franchising model has been a key reason for its growth. He says the company is careful in selecting its operators, and the company’s franchisees continue to build new locations.

“We were able to bring great franchisees on board the last number of years that have accelerated growth,” Jones says. “It all goes back to the business model. The people operating the restaurants today want to invest in new stores. They’re doing well, making money and they want to provide an opportunity for team members.”

Jersey Mike’s operates 80 to 90 corporate stores, and in many of them, the managers own a piece of the stores. “It keeps continuity in the stores,” Jones says. “We’re big believers in trying to make sure the people working in the stores have continuity. It’s great for employees. It’s great for customers.”

That way, he says, customers come into a restaurant where “everybody knows your name.”

“It may not be ‘Cheers,’” he says, citing the ’80s television show. “It’s our own unique culture. I may not know your name, but know what sandwich you’re going to get.”

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