Jersey Mike’s same-store sales in the first quarter were up 1.7%. | Photo: Shutterstock.
Jersey Mike’s is preparing for what is expected to be one of the biggest initial public offerings the restaurant industry has seen. The preparation includes filings with the U.S. Securities and Exchange Commission designed to give potential investors a better picture of how the company is doing — and its aspirations.
Not surprisingly, the almost entirely franchised, 3,300-unit chain appears to be doing quite well.
The 70-year-old chain was acquired by private-equity firm Blackstone in January 2025 for the purchase price of $6.3 billion. (Last year, founder Peter Cancro paid transaction bonuses of $411 million tied to the deal.)
Jersey Mike’s has enjoyed 20 consecutive years of same-store sales growth. In 2025, same-store sales rose 3.2%. That followed a same-store-sales increase of 2% in 2024, and an 8.4% increase in 2023.
For the March 29-ended first quarter this year, same-store sales were up 1.7%, driven by transaction growth and a higher average check, which lapped a 4.9% increase a year ago.
The system average unit volume was nearly $1.4 million last year, but the company said about 6% of units achieved AUVs of $2 million or higher. And the company said investments in digital and delivery channels, marketing and the MyMike’s loyalty program (with 12.5 million members in 2025), as well as store-level operations, will help that AUV continue to grow. (The average has grown every year since 2006.)
First-quarter revenues totaled $122 million, a 10% increase. The chain, however, recorded a net loss of $24 million for the quarter, compared with net income of $10 million the prior year, which was blamed largely on the $28 million buyout of area directors (explained below), as well as expenses tied to debt interest and the acquisition that were partially offset by revenue growth.
Here are some more tidbits from the SEC filings:
A move away from area directors. Jersey Mike’s has long used an area director model for franchising. Under that model, corporate employees and current or former franchisees served as area directors, recruiting franchise owners within their territories and supporting them, while also serving as a liaison between franchise owners and the company. Those area directors received about 2% of gross sales from their territories, which was paid by the company.
Last year, however, the company transitioned away from that model, SEC documents indicate. Now the company uses an internally staffed “regional vice president” model. Under the new system, corporate employees (regional vice presidents), supported by franchise business consultants, help franchisees with things like site selection, development, openings and operations.
The move will enhance consistency, strengthen alignment with franchise owners and give the company more control over execution across the system, the company said in the filing. It also means, of course, the franchisor doesn’t have to give up that 2% of sales.
The company is still in the process of buying out the remaining contractual rights of area directors. Those buyouts, however, were costly, as evidenced by the $28 million hit to income in the first quarter.
Room for U.S. growth. Jersey Mike’s operates in all 50 states, but the company believes it remains under-penetrated, with room to open up to 7,500 units. There are 1,600 units in domestic development currently, and about 90% of those units on deck are planned by existing franchise owners, which the company argues is a powerful signal of franchisee confidence in the brand. As of June 30, agreements have been signed for 1,250 restaurants and the rest are in active negotiation.
The franchisee base is diverse. At the end of last year, the chain had 630 franchise owners, of which about 80 operators had 10 or more stores. More than 330 operate only one or two units, meaning the system does not rely heavily on any single operator. The largest franchisee has 91 restaurants, representing about 3% of the system.
International growth could eventually exceed domestic. Globally, Jersey Mike’s has potential to eventually grow to about 15,000 units in time, but international growth is just getting started. Jersey Mike’s in 2023 signed a 300-store area director agreement with Redberry Shore Restaurants LP to develop the brand in Canada over the next decade. Units open so far have an even higher average unit volume of $1.6 million.
In addition, the brand’s founder Peter Cancro has become a master franchise operator to bring the brand to the United Kingdom under the company JM Submarines UK LTD. The deal includes a minimum of 300 units across the U.K. and Ireland over 10 years.
Given Cancro’s track record, the deal includes “certain negotiated terms that differ from our standard terms,” including royalties and other payments, the filing notes. But details were not disclosed and the company does not expect the negotiated terms to be material to results.
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