Jersey Mike's Subs Inc.

What they do

Jersey Mike's operates a franchisor model built on fast-casual sub sandwiches, with nearly all of its stores franchised. As of June 28, 2026, the system had 3,378 stores, including 3,322 domestic franchised, 30 international franchised and 26 company-owned locations across all 50 states and two countries. The company collects royalties and advertising fees based on franchisee sales, and it runs give-back campaigns such as Month of Giving, donating 100% of sales on the last Wednesday of March.

Revenue drivers

• Royalties and other revenue — Generated as a percentage of franchisee sales; $138 million in the second quarter of 2026, up 11% year over year, the largest revenue line.
• Advertising revenue — Collected from franchise owners as a percentage of sales to fund marketing; $57 million in the second quarter of 2026, up 6% year over year.
• Supplier program payments, technology fees, franchise fees and gift card breakage — Other revenue sources collected from franchisees and suppliers; not individually quantified in the excerpts.
• Systemwide sales base — $1.210 billion in the second quarter of 2026, up 10% year over year, with 43% of sales digital; royalties and ad fees scale with this base.

Recent performance

In the quarter ended June 28, 2026, systemwide sales rose 10% to $1.210 billion, total revenue rose 10% to $208 million, and adjusted EBITDA grew 7% to $114 million. Same-store sales increased 2.3%, driven primarily by transaction growth, and digital sales mix rose to 43% from 41%. Net income fell 37% to $37 million from $59 million, reflecting non-routine expenses, advertising fund timing and higher interest expense, partially offset by a $14 million gain on the sale of corporate-owned stores. The company opened 83 new stores in the quarter, bringing total stores to 3,378 and net unit growth to 8.1% year over year.

Strategy

Management's stated long-term objective is achieving $2 million average unit volumes, with second-quarter same-store sales acceleration cited as progress. The company is focused on broadening its consumer base, growing digital channels and bringing innovation to market while supporting franchisee unit economics. It runs marketing and digital capabilities plus supply chain, technology and operational processes to drive consistency and efficiency. Management also cites its Month of Giving and community engagement as part of the brand. The company recently transitioned from a founder-led to a corporate-led organization following its July 2026 IPO.

Risks

• Same-store sales moderation — Same-store sales growth slowed to 2.3% in the second quarter of 2026 from 3.6% a year earlier, and management notes challenged traffic trends across the industry.
• Franchisee concentration — With 3,322 of 3,348 U.S. stores franchised, revenue depends on franchisee sales and the health of multi-store and single-store operators.
• Unit growth dependence — Net unit growth of 8.1% in the second quarter was down from 10.0% a year earlier, and revenue growth depends on continued new store openings.
• Advertising fund timing and interest expense — Net income fell 37% year over year partly on advertising fund timing and higher interest expense, with a $10 million net adverse advertising fund timing impact on adjusted EBITDA.

Outlook

For full-year fiscal 2026, management guides same-store sales growth of 2.5-3.0%, including 3.0-4.0% in the third quarter. Net unit growth is expected to be at least 8%, and adjusted EBITDA growth is expected to be at least 20%, including at least 13% in the third quarter. Management says same-store sales acceleration has continued into the third quarter.