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2018 Horatio Alger Award Winner

Jimmy John Liautaud

Founder & Chairman

Jimmy John's Gourmet Sandwiches

“I try to be a better person today than I was yesterday.”

Jimmy John Liautaud was born in 1964 in Arlington Heights, Illinois, the second of four children. His mother, Gina, a Lithuanian immigrant, was an elementary school teacher. His father, Big Jim, was an inventor, entrepreneur, and educator, who started his career as an encyclopedia salesman before launching a plastics molding business. The beginnings and failings of his many ventures took the family on a roller coaster of highs and lows throughout Jimmy’s childhood and early teen years.

Jimmy describes his mother as a survivor. She was a girl in her native Lithuania when Germany invaded, forcing her family to flee. After two years, they ended up in a displaced persons’ camp in Germany. She came to America through Ellis Island when she was 13. Despite those hardships, she attended the University of Illinois, where she was named Homecoming queen in 1959, met her future husband, and received a teaching degree.

Money was tight in the early years, but in 1972, when Jimmy was eight, his father’s business was growing. His success allowed the family to move from a duplex to their first home in Cary, Illinois. That summer, Jimmy, with his older brother and mother, moved with the use of the family station wagon. It was a happy time, but six months later, Jimmy’s father informed the family that his business was failing and they may have to sell the house. Soon thereafter, his father declared bankruptcy. “It had been a big deal for us to get our first house,” says Liautaud. “The thought of losing it was quite disruptive. Financially, we were living close to the edge. My mom did what she could to stretch pennies until the next paycheck. I knew how bad it was when she switched to powdered milk in our cereal. Boy, I hated that stuff.”

In 1976, when Jimmy was 12, his father had invented and developed a CB antenna. Unfortunately, three of his top employees stole his idea and beat him to market. “My father took them to court, but he still declared a second bankruptcy,” says Liautaud.

Vowing to never take on any debt or partners ever again, Jimmy’s father rebuilt his business slowly and eventually became profitable. He traveled six days a week selling his product. But his absence and the years of financial upheavals had taken a toll on the family. “My parents did the best they could with what they had,” says Liautaud. “We knew they loved us. My grandfather also loved me a lot. He was very special to me, but we didn’t have much stability. My mother worked hard and we all took on added responsibilities. The ups and downs contributed to my personal issues. I was a fat kid, I didn’t do well in school, and I had very low self-confidence. I became a regular pot smoker by the time I was in junior high. I certainly didn’t think much about my future.”

By the time Jimmy was a freshman in high school, his father began to do better financially. His parents enrolled him at Elgin Academy, where he was surrounded by upper middle-class students with plenty of self-confidence. “I felt like a fish out of water,” he says, “and I began skipping classes.” As a known troublemaker, the school administration wanted to expel Jimmy, but the dean of students, Jim Lyons, went to bat for him and gave an ultimatum, “If he goes, I go.” The dean recognized Liautaud’s behavior as insecurity. “For some reason, he liked me and I liked him,” says Liautaud. “He told me he could help me, but I’d have to listen to him and follow his rules. He believed in me and that helped build my confidence. We developed a mutually respectful relationship and became lifelong friends.”

Liautaud graduated second to last in his class and his college test scores were not much better, making his options for higher education minimal. His father, who served in Korea, believed in the discipline the Army provides young people. He encouraged his son to enlist, but Liautaud resisted. “I’m just not a fighter,” he says. “I had always thought it would be great to open a Chicago hotdog stand. That was real to me, and I wanted to do it.”

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Liautaud asked his father for a $25,000 business loan. His father agreed on one condition. If his business didn’t succeed, Liautaud would join the Army, and if it did, his father would own 48 percent. He also told his son he could no longer live at home. “It’s time for you to fly,” his father said.

The summer of 1982, Liautaud visited hot dog stands around the Chicago suburbs. He created a menu he liked, and then searched for his wares among used restaurant equipment. He was disappointed to learn that just his equipment would cost $45,000. He asked for more money, but his dad told him that the deal was $25,000. The next weekend, while visiting a friend at Southern Illinois University, Liautaud went to a mom-and-pop sandwich shop. “I noticed the restaurant used very little equipment,” says Liautaud. “They had a refrigerator, a meat slicer, and a cash register. New plan, I thought. I can make sandwiches!”

Liautaud checked out cookbooks from the Cary Public Library and taught himself to bake bread. He developed six sandwiches he liked and invited his family over to taste them and vote on the best ones. The top four became his first menu. Next, he found a site near Eastern Illinois University, which was a former two-car garage in an alley. His father’s loan was enough for the equipment and remodel, but fell short for an outdoor sign and icemaker. In August, Liautaud headed to Charleston, Illinois, with his car towing a trailer of equipment. On January 13, 1983, Jimmy John’s Gourmet Sandwiches opened for business with four sandwiches and 25-cent Cokes with no ice.

On his first day, no customers came, so Jimmy asked his cousin to watch the store while he took sandwich samples to his business neighbors. It worked. Customers enjoyed the samples and came into the shop to buy sandwiches. With that first success, he printed business cards, which included his menu on the backside, and passed out sandwich samples at the university dorms and nearby bars. Within a few weeks, he was breaking even.

“Learning to be a leader was tough for me,” says Liautaud. “When I first started, I took the easy shifts for myself and left the harder ones for my employees.” After a few months, his employees quit, leaving Liautaud to run the store himself. He learned he could work open to close, take the hardest tasks for himself, and set up the next teammate and shift for success by doing much of their work for them. He loved it, and it was working.

When sales slowed during school breaks, Liautaud learned to understand his checkbook. His father had taught him to pay for everything cash on delivery. He recorded all his deposit tickets, balanced the account, and soon realized he had $18,000 in the bank. “That was a fortune to me,” he says. “I became an accountant by default and was maniacal about my numbers.” In the first year, the store’s sales were $154,000 and he split the $40,000 profit with his father. In 1984, he did $180,000 in sales and made a $55,000 profit, which was again split with his father. In May 1985, he bought out his father by paying back the original $25,000 loan with interest, making him the sole shareholder of Jimmy John’s.

In 1988, Liautaud met businessman and Pizza Hut franchisee Jamie Coulter, who shared his operational systems with Jimmy. This systematic approach helped him take his business—now three shops—to the next level. By 1994, he had 10 restaurants and zero debt. It was time to start franchising.

In 2002, the company had 160 stores, and 70 were failing. Married with three young children, Liautaud stopped selling franchises and he and his president, James North, traveled the country, working with owners and retraining them on the Jimmy John systems and procedures. In 18 months, they turned around 63 stores and closed 7. From that point on, he decided to be the best rather than the biggest. He tightened the franchisee selection process and became transparent about the long hours and lifestyle of a Jimmy John’s franchise owner. He grew the chain to 2,500 units by 2016 and He grew the chain to 2,500 units by 2016 and then sold a majority stake to Roark Capital Group. Liautaud remains the largest individual shareholder and chairman of the board. He has never made a business plan and never intended for the company to be as big as it is today.

Liautaud’s daily standard for living is to try to be a better man today than the one he was yesterday. Looking back over his successful career, he says he is proud of the person he has become. “All the ups and downs, family battles, the 100-hour work weeks—all of it has made me the man I am today,” he says. “I have had success and I’ve shared it with my top producers. Fourteen out of 17 of my executive team came from the sandwich shops and all of them are now millionaires. That feels good!”

Liautaud is also proud of his family. “I love my children. I’ve been brutally transparent with them,” he says. “My children are hardworking, independent, confident, and treat others with respect. They have more confidence than I ever had at their age, and I respect them for that. They earned it themselves. They are our greatest accomplishment.”

When asked to define success, Liautaud says, “For me, if you have choices in life, then you are successful. I didn’t have that when I was young. So, having a great spouse, wonderful kids, and choices—well, that’s pretty good stuff.”

Liautaud believes “different strokes for different folks.” What works for one person doesn’t necessarily work for another. He realizes how fortunate he was to get a $25,000 loan from his father, but he also knows that hard work and some good luck are why he succeeded. “If you have a job,” he says, “get to work earlier and stay later than everyone else in the office. Outwork your teammates and always know exactly where you are financially. Those two things alone will get you further than most.”

Today, Liautaud has a passion for coaching young entrepreneurs who ask him for help. He especially likes sharing experiences with up-and-coming restaurant operators. His family foundation and the company support many organizations that further the advancement of medicine, children’s health, and reconstructive surgery, along with support for American troops and their families, to name a few.

Proud of his Horatio Alger Award, Liautaud says, “I’ve battled my way through the ups and downs of my childhood, through being the fat kid, through bullying, through low self-confidence, and then through many business obstacles that come with the territory. Receiving this award for beating the odds and beating life challenges, wow! It’s amazing, absolutely amazing. I am so appreciative of this honor. I couldn’t have done it without the love and support from my wife, Leslie, and our children, Spencer, Lucy, and Fred. Thank you.”

To learn more about Jimmy John Liautaud, like him on Facebook, subscribe to his YouTube Channel and connect with him on LinkedIn.

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