Jersey Mike’s S-1 Breakdown: How a $4.2B Sandwich Machine Works

**CJ Gustafson** (0:00)
On today's Run the Numbers, we explore how to sell over $4 billion in sandwiches and own almost none of the stores. This is the Jersey Mike's IPO S-1 breakdown. You didn't know you were hungry for. I'm very hungry. I'm staying up here to do this before dinner. All right, let's get to it.
Is this thing on?
Yesterday's price is not today's price.
All right, what's the origin story here? Peter Cancro was 17 when he borrowed money from his high school football coach and bought the local sub shop he worked at. The shop was called Mike's. Peter's name is not Mike, but Peter is very rich because 50 years later, he sold most of the company to Blackstone in a deal that valued it at $8 billion. And if he's adopting either children or CFOs, I am very available because on the way out, he cut his stepson a $50 million check, his long time CFO another $40 million check, and bought back his private jet for a cool $41 million.
And then he threw the deuces. Jersey Mike's is in many ways the American dream, sponsored by Private Equity and now available in S-1 format. I have eaten an unreasonable amount of Jersey Mike's over the years, so I live next to one, which was adjacent to a car wash in Florida. And as someone who worked from home and had very little social interaction, I'd make it a trip on Friday afternoons to get out of the house. I'd get the truck washed, which was my version of retail therapy. My wife's version is much more expensive and does not include oregano or salted meats. And I would sit by myself like Stephen Glansberg and Mike's like a complete psychopath. What? So I gotta sit here and eat dessert alone like I'm fucking Stephen Glansberg? When a company I have destroyed t-shirts using their product files to go public, at a number people keep whispering is north of $12 billion, I go nuts. I eat it all up. I go through all 291 pages, so you do not have to. The TLDR here, if you don't get any further, Jersey Mike's does not sell you a sandwich. More than 630 franchise owners sell you the sandwich. Jersey Mike's sells them the right to do it, eclipse 6.5% and a little bit more, which we'll get to, off the top of every register in America. The filing doesn't hide the ball. They say Jersey Mike's operates a proven, highly franchised asset-light business model that generates stable, diversified and high margin cash flows. If you peel off the sandwich wrapper here, it's really a royalty business that is just firing on all cylinders, right? It's not really a restaurant business, per se. And the only thing I like more than Metrics are large Italian subs. So let's get into it. What are the key metrics? A quick rundown before we get into the weird stuff. These are the somewhat clean numbers ahead of what Blackstone did to the balance sheet.
System-wide sales, $4.2 billion in 2025 This was up 13% year-on-year and up 12% the year before. This is what you would call the big number flowing through the entire system. It's not the company's actual revenue. Every dollar that Jersey Mike makes is a slice of this bigger number. So that's the entire amount of sales going through all their franchisees. Their annual revenue, what they get to keep as a company, is $724 million. That was up 11% year-on-year.
Royalties and other fees were $483 million of this. And then the marketing fund that franchisees pay into was $203 million. And that roughly actually offset their own ad op-backs. And their handful of company-owned stores, they do have a few, raked in $38 million. So the royalty line is actually where all the EBITDA lives. Their net income, kind of paltry, $55 million. This is very thin against $724 million of revenue. And it's a leveraged buyout artifact. It's not really their actual business' reflection of what the engine is. The Blackstone section that we'll go through, we'll walk it back to what the actual operating company can generate, which is an adjusted EBITDA of $339 million last year, which is an astounding 47% margin. And these are clearly franchisor royalty economics, not restaurant economics, right? Most restaurants operate in the low single digits of margin. What is their average unit volume or AUV? Think of this as the per shop revenue. So if you own a Jersey Mike's location, on average, it pulls in $1.4 million in revenue. And that's actually 3X the average of US Subway locations, which are notoriously low. And also the worst thing about eating Subway is smelling like Subway the rest of the day. Same store sales growth, 3.2% year-over-year growth. This one might be worth circling because it ran hot at about 8.4% in 2023 Then it dropped to just 2% in 2024 It wiggled its way back to 3.2% in 2025 And it's pacing at 2.5% in the first half of 2026 A good chunk of the strong years was actually menu price increases rather than traffic. Damn inflation. Can't get a $5 foot long anymore. Net store growth, 8.5%.