Weston Presidio buys fourth food chain

The San Francisco private equity firm has bit into the ‘world’s greatest gourmet sandwiches’ chain.

Weston Presidio has announced its acquisition of one third of shares in Champaign, Illinois-based Jimmy John’s Gourmet Sandwich Shops.

Founded in 1983, Jimmy John’s has gained a cult following among college students both for its sub sandwiches, which have names such as “Big John” and “Bootlegger Club,” as well as the personality of its founder, largest shareholder and chairman Jimmy John Liautaud.

Michael Lazarus, managing partner at Weston Presidio, said in a statement, “Jimmy John’s is a perfect match for our strategy of backing successful entrepreneurs in highly loyal, customer driven businesses.”

Liautaud, who started the chain after graduating second-to-last in his high school class, reportedly plans to grow his business to at least 1,000 stores by 2009. There are currently some 507 Jimmy John’s stores, about 95 percent of which are franchise owned. The company reported per franchise average sales of $922,381 and average unit net profit of 25.28 percent on its website.

The investment amount was undisclosed, but Weston Presidio paid $245 million for Goldman Sachs’ stake in Apple American Group, Applebee’s largest franchisee, in March 2005. Weston Presidio exited investments in Leeann Chin in 2004, and Coffee Connection, which was acquired by Starbucks for $23 million in 1994.

Liautaud will continue to own and manage Jimmy John’s with president James North.

Weston Presidio, which has offices in San Francisco, Boston and Menlo Park, says it typically makes investments between $10 million and $100 million both in early and later stage companies. The firm closed its last fund, Weston Presidio V, in April 2005 at $1 billion and has $3.3 billion under management. Some of the firm’s notable investments include JetBlue Airways and Wild Oats Markets.

North Point Advisors was financial adviser to Jimmy John’s.