Jersey Mike’s CEO on Scaling Without Losing the Brand

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2:18Just go to quickbooks.com slash money. Again, that is quickbooks.com slash money. Terms apply. Money management services are provided by Intuit Payments Inc., licensed as a money transmitter by the New York State Department of Financial Services. From Entrepreneur Media, this is Problem Solvers, a show that solves entrepreneurs' toughest problems. I'm Jason Pfeiffer, Editor-in-Chief of Entrepreneur Magazine, and each week I take a problem that you're probably dealing with and get tactical solutions from people who have been there and solved that. So let's get solving. How big can the sandwich franchise Jersey Mike's get?

2:57The world of franchising is about to find out. Until recently, Jersey Mike's was a story of homespun grit. Maybe you know part of it. It began as a tiny sandwich shop and was purchased by a young employee named Peter Kankrow. And then Kankrow spent 50 years growing it into the brand it has become. Now, a new chapter has begun. In November of 2024, Cancro sold the brand to the private equity firm Blackstone for$8 billion, with a B,$8 billion. And a few months later, in April 2025, he announced that he was stepping down as CEO. The brand's new leader is Charlie Morrison, a veteran of franchising with a reputation for growth.

3:42Charlie was the CEO of Wingstop, where he grew it from fewer than 500 to 2 ,000 plus locations, as well as the CEO of Salad and Go, where he grew the brand's store count sevenfold. So what can he do at Jersey Mike's? I think we have a ton of opportunity to continue to grow this business. We're at 3 ,200 stores now. We probably could double that in the U.S. as we go forward. And then we have a huge opportunity overseas. That, of course, is Charlie. And that mandate of his, that mandate to grow, is already showing up in the numbers. So let's take a moment to talk about a really important number.

4:21In fact, the number that brings us together today. Some backstory first. Every January, Entrepreneur Magazine publishes something called the Franchise 500. It is the franchise industry's most definitive ranking of the strongest franchise brands. And we've been doing it for nearly 50 years. The ranking takes into account everything about a franchise, more than 150 data points, such as its franchise fee, total investment, open and operating units, growth rate, closures, financing availability, social media, operational support, and so much more. If you're thinking about buying a franchise, this is definitely the place to start.

5:02And you can find it on StandsNow. Just grab your copy of the January issue wherever you get magazines, or head over to entrepreneur.com slash franchise 500 to see the ranking. Anyway, here is why I am telling you all of this. Jersey Mike's has been on the Franchise 500's top 10 list for eight straight years. And last year, it was number two. Now, for the first time in its history, it has reached number one on the Franchise 500. And Charlie, the new leader of Jersey Mike's, well, he's excited. But he's also realistic. I've only been here for about six months, so I can't take credit for that. But what I can tell you is this is 50 years of really hard work.

5:49As he enters his first full year of Jersey Mike's leadership, Charlie says he wants to be mindful of the legacy of what has come before. He has seen other brands make mistakes in the name of growth, like forgetting why people love the brand or degrading a product that works. At Jersey Mike's, he says he is not there to fix anything. He is there to accelerate things. So that is what we're talking about on this episode of Problem Solvers. It is a deep dive into Jersey Mike's from the perspective of its new leader. We talk about how he earns people's trust, develops a vision for the brand, and approaches evolving a brand like this that people already love without doing any harm to the things that people already love the most.

6:35All of that is coming up and more. It's a really great conversation after the break. All right, we're back. I am here with Charlie Morrison, the CEO of Jersey Mics. By the way, an edited version of this conversation you're about to hear appears in the January-February issue of Entrepreneur Magazine, but you're getting the full version right here, right now in audio form. So let's start here. As you heard just a moment ago, Charlie said, this victory in the Franchise 500 is the result of 50 years of work. And I want you to hear the rest of that answer, what he said. And this was just in response to me congratulating him at the very beginning of our conversation for being number one in the Franchise 500.

7:17And what he says is really an homage to the history of the brand, to what came before. And I'm playing that for you to tee up the question that I ask afterwards, which really gets into appreciating the story behind a brand and really understanding and grappling with how important that is for a brand going forward, and particularly one at this moment in time with a new leader, a new owner, and a new mandate. Anyway, here's what Charlie said. It goes all the way back to our founder, Peter Cancro, who bought this little sub shop in Point Pleasant, New Jersey, on a loan that he got from his Pop Warner football coach to create this amazing brand that he and the team have built over the last 50 years.

8:09And there's been a lot of blood, sweat, and tears, if you will, that have been put into this brand to help grow it and get it to this point. And I'm very proud of this team. I know they're very proud of this accomplishment. They're very excited to see the fruits of their hard work culminate in this honor. So it's exciting. Charlie, I like your answer because it also indicates to me the mindset, and you tell me if I'm right, but the mindset that you bring into this leadership role, which is to say, I assume you have shown up to do what you have done at the other brands that you have led, which is to grow it, to bring it to the next phase of its evolution.

8:50But the way that you started that answer was to talk about the heritage of the brand. And so you stand at an interesting intersection where you inherit a brand that has a strong legacy and a strong story, a very personal story that has been told by the guy featured in the story, Peter, for such a long time. And now you are leading it into a new place, but you're going to want to hold on to that legacy. And I wonder how you think about that as a CEO. Well, I think any brand that you lead, you first need to learn a lot about what it is that got you to where you are today. To dismiss that for any reason whatsoever would be a colossal mistake by any CEO.

9:35And this one, let me tell you, it's very unique. I mean, founder-led, the only shareholder in the business, no other investors came along. I mean, really, Peter and the team led this thing for many years. And the team that I inherited was a long-tenured team, 20, 30 years of experience in each of the key roles in the organization. And that transcends through the entire organization, our franchisees, our owners, the people who have been around it, they've watched this thing grow. And so it's incumbent upon you to understand like, what is it that makes Jersey Mike so special? Certainly the food.

10:06We've been doing this the same way for many, many years, hand slicing our subs, hand slicing every tomato every morning, the lettuce, the onions, everything that makes Mike's way happen, baking the bread. There's an art and a lot of love that's put to this, but it all centers back on the people themselves and who they are and what they've done and the challenges they've faced to get to this point. And so learning that, I think as a CEO, puts your mind in a perspective of, okay, what do I need to do now to continue this growth, to amplify it perhaps at a different level, but not lose sight of the true heritage and roots of this organization that exists.

10:45That is a tension point that a lot of people feel and they don't have to be external leaders coming in to feel it, I think a lot of founders worry that at some point in their growth trajectory, the company could become something different. It could feel different. Sure. And I wonder how you approach that. What intentional things or strategic things do you do to make sure that the most important parts of the legacy of a brand maintain and scale? Well, as you know, the company, Peter sold the company to Blackstone at the end of last year, first of this year. And when Peter and I met, we talked at length about the opportunity, of course, to take over and carry on the legacy.

11:38But we spent a lot more time talking philosophically about how we run businesses and the importance of that. and we were very aligned in that there's nothing to fix here at all. Quite frankly, there's only that which we can amplify and continue the growth journey. So I think you have to put yourself in the mindset of the founder and understand where he is coming from or she and how they came along the journey and grew the company, but at the same time then try to integrate that into the strategic platform for growth for the organization that's going to carry us well into the future. And I will say that as we've started developing our strategy for where we go next, foundationally, it lives in the purpose of the brand.

12:26And the purpose here has a lot to do with the culture that has existed and the language we use, how we speak about the brand, how we speak about our franchise owners and how we carry that forward so that we never lose sight of that. And that's what we're working on right now is making sure that we stay true to who we are as a brand, not letting go of that which has gotten us here today. I will not ask you to name names, but I'm curious in your long career in franchising if you've seen the opposite of that happen and what it looked like. Every time that I make a leadership decision, I'm in some way or another doing it in contrast to a poor leadership decision that I experienced at some point in my career.

13:08And so as you think about how to grow in a way that carries forward the most important parts of the origin of this brand, if you can think about witnessing missed opportunities and maybe what happened there and how you make sure that it doesn't happen with you. Yeah, I don't know that I would name names of those that I have seen move the wrong direction, But I think we all know that that has happened, sadly. And I think, you know, what ends up, I'll say a couple things about what I think ends up causing that problem that we can lean into. And I'll use my experience at Wingstop prior to this only because I think it's relevant in that we didn't change much of anything about the brand.

13:53I mean, it started with chicken wings, bone-in chicken wings with eight flavors, and we just kind of carried that forward over time. Jersey Mike's much the same way. But I've seen other brands in pizza and other different types of food where it's possible that they've lost sight of what the product was, what it meant to the consumer in its early days. And, you know, there are a lot of brands that have been around since the 50s when chains started to really emerge and they lose their way. They focus on cost control or other types of measures to the detriment of the preference of the consumer. And then they apply marketing strategies to try and go, you know, bring the customer back and convince them that it's right or wrong.

14:38And, you know, they're brands who have admitted after many, many years that their product really isn't what it was at the beginning. And it's become a they'll use their terms. But I'm sure you remember some of these stories. And so sure. And, you know, we don't have to. This is a name. This is a name you can name because they did it publicly. But very famously, Domino's ran a big campaign about how much their pizza sucked. It was a very, very effective campaign. Yeah. And so, look, I mean, I think fundamentally for me, I don't want to lose sight of that. I want to bake our bread fresh every day.

15:08I want to slice every sub the way we've done it for 50 years and more, quite frankly. And when you go back to the origins of the original concept, it's almost 75 years old. So why would we change that which is working so well? And I think it starts right there with the product and the care and the love that you put into it. That matters. And I think chains fall away from that when we let too much of the marketing engine control us and not enough of just being core to who we are. What do you do as a new CEO when you first show up? I'm curious how you get to know the brand. Walking into a role as a CEO of a franchise is probably more complex than many other businesses because you've got both your corporate team, but now you also have all of these independent business owners who you have to build trust with as well.

15:59What do you do in the very beginning? Yeah, it's a balancing act, for sure, because you have a lot of constituents that you're managing with. As you said, you have the customer who's ultimately buying the sub, you have the franchise owner who is your customer as a franchisor, making sure that they're heard, and they understand your philosophy and approach and strategy, and then you have the team. And so a lot of my time is spent getting to know them one-on-one, face-to-face, as often as I can, engaging, and to your point, you said it, but developing trust. And I go about it, and I've learned this over a long period of time, that the best way to demonstrate or build, I should say build trust, is to demonstrate real vulnerability.

16:45Just be you. Be honest, be engaging, thoughtful, listen effectively, hear what people have to say, and then be candid in your response. And I lead a meeting with our team. I call affectionately NETMA, which stands for nobody ever tells me anything. And this whole adage that people sit back and they wonder like, what's going on? I don't know. Nobody ever tells me anything. And I actually put that meeting to work in a way that hopefully gives them an indication that I am listening. I want to hear their feedback and give them an opportunity to do that. When I first got here, I met with our largest franchise operators and what we call our area directors.

17:29So these are people who manage groups of franchisees. And I got them all together in one room and we sat and talked. It was just me. I didn't have the team behind me, I said, like, I want to hear what's on your mind. What are the biggest things that concern you? What are you worried about with regard to like the Blackstone acquisition or whatever? And we just had an honest conversation. And it's my job to follow up with them and give them an ear. With our team members, I put a box in the office that says on the outside of it, it says, Ask Charlie. It's under lock and key. At any point in time, if you want to just write a little handwritten note to me to ask me a question, you can put it in that box.

18:07But the thing I do different is I actually take that box. I never look at it. I get in front of the entire company face to face. My assistant hands me the box. I open the box. I read every single question and answer every single question, regardless of what the question is, how difficult it is, how painful it might be. But it's the idea of being vulnerable and saying, look, I really do appreciate the real questions, the tough questions that people won't raise their hand in a big room and ask you about. But it does give them an opportunity to see that I care and that I want to earn their trust.

18:39And by earning their trust, then that's the best way to build a really high functioning team that's going to be able to carry this brand from where we've been to the journey forward. And if you reflect back on Jersey Mike's and the 50-year history, of course, there's a ton of trust in Peter Cancro, the founder. He's been there for 50 years. I'm here six months. Why are going to trust this guy? And so those are just, you know, a couple examples of what I try to do to build that trust and earn it. It takes time. It takes time. I really love the way you handle the question box by opening it up in front of everyone, because what you're showing people is that there is no filter between them and you, right?

19:23If you looked at it ahead of time, you could have prepped an answer, and then that answer would feel less trustworthy, especially if it's a really tough question. But to see you work it out in real time is a real trust builder. Yeah, that's the goal. It's up to me to make sure not only do I listen and answer the questions, I follow up as well. What has surprised you? You know, look, you must have known a tremendous amount about Jersey Mike's before showing up. But as you did that listening tour, as you've engaged with folks, and as you've just gotten to know the brand in a way that you can't know until you're actually CEO, what are the things that you feel like you didn't quite know until you were there?

20:08Well, I think every business has its internal challenges that we deal with, And we're not without those. I won't list them all out here, but I'll just tell you that they exist. Something as simple as the shirts that our team members wear, they're hard to keep pressed. They get a little bit of oil on them from the Mike's way, you know, the juice, if you will, while the juice splatters gets on the shirts. And so a good example is our franchise owners were like, can we change the shirts? Can I get a polo? Those things. It's like, sure. Yeah. You tell me. You're operating every day. I'm not. And, you know, I want to make sure that we put our teams in the best foot forward so they look the best in the organization.

20:48But I think in this case, the biggest challenge on anybody's mind was the risk of change or the issue of change. What can we do to avoid anything that ultimately degrades the concept and all that? There's this misperception that private equity coming in will do something like that. And I'm trying to do everything I can to ease the anxiety around that. And I think building that trust and having that conversation with them directly helps. But, you know, I guess, you know, other than that, one thing I think we have a great opportunity to do is really connect with young people and tie this brand to a younger person.

21:27We don't spend as much time in social media talking about our brand. We do some authentic organic social marketing, but what we're not doing is pointing to them and saying, hey, we need to get you in here and enjoy that sandwich. We have lots of people who are young that eat our sandwiches, but it's not core to who we are. And so I guess if anything surprised me, it was that we're just we can do more to get that message out there and expand the audience for this brand, which I think from a franchise owner's perspective and mine and everybody, you know, our ownership. That's music to our ears. that's that's growth and that hopefully will keep us at the top of this list indeed it will so two words that you used to that answer and i want to follow up on both of them we'll do it in the order in which they appeared which was change and growth so let's talk about change for a second it's funny charlie i outside of entrepreneur one of the things i do is is keynote speaking and so i've been hired by a lot of companies outside and inside of franchising to come and talk.

22:26So at a franchise, it's obviously it's usually the franchisee convention. And the subject that I speak on is change. So how do you thrive in times of change? How do you get people to embrace and be excited about change? And every single time I'm hired by a franchise, the story is exactly the same. They tell me, we are, we are encouraged, we are either rolling out some kind of new change system wide, or we are encouraging our franchisees to think differently about this or that. And it could be something as simple as I remember once speaking to a franchise and one of the things that they told me was top on everyone's mind was that individual franchisees used to rely a lot on digital marketing and the cost of digital marketing has skyrocketed and they have been pushing their franchisees to find other ways to get the message out and engage with the communities.

23:14And people have been really challenged by that. Anyway, the point is that what it taught me, that experience, was that there is a constant tension point between a franchise and its franchisees over the subject of change. And very understandably so. You have all these individual independent business owners. They're running their businesses. If it's working for them, it's working for them. They don't want to hear about all this change all the time. And you walk into a situation which is surely like that, because every franchise is like that in some way. And then also, there's the BlackRock, and then there's you.

23:46So there's a lot of change being represented here and i wonder what kind of conversations you're having with people to help people become more comfortable with change well you know i when i did get here there there were lots of changes happening even before uh blackstone showed up or you know peter sold the company etc that franchisees were saying hey can we slow the pace and some of it was just new product related, new ideas, adding, you know, a sauce or a dressing or something for the subs that seemed like, you know, was it really moving the needle for the organization? And as I mentioned before, I'm a big believer in keeping things very simple and focused on how we got to where we are.

24:34and there is pressure always to figure out how we can add something to enhance our sales and grow it. My firm belief is that we have a wonderful lineup of products. We have subs for everybody's needs, be it turkey, tuna fish, chicken salad, a basic, you know, the original Italian style sub. We have Philly cheesesteaks and like we have we have a broad offering. I don't know that we need to add a lot more to make the brand more appealing to anybody else. I think we just have to find a way to connect the brand to people who may not know us as well as we are and so are as well as they do. I think at the end of the day, keeping it simple and focused is critical to our long term success.

25:23Let's go execute and execute really, really well. And that's what the customer is really looking for. consistency, high quality, don't skimp on ingredients, don't modify the product such that it starts to erode it dramatically and give people a great value and they'll come back and return over and over and over again. And I think that's what builds great brands. I think if you look over time, the best brands are those that have not added complexity by way of change. And I think complexity kills. It adds complexity at the store level. The operators get dissatisfied with operating because so much change is hitting them all the time.

26:02Some businesses have done a great job of adapting to change that's constant. And that's fine. But I think you'll generally see that the brands go through cycles of immense change, followed by compression back to where we were, and trying to simplify it. And then in reestablishing, you know, ourselves and the roots of where we came from. And then they go back into the complexity cycle again. And it just, happens. And if I can do one thing, it would be to ward off that pressure, I guess, to feel like you have to institute change in order to grow. I think you can grow by just doing what you do and doing it extraordinarily well and keeping it simple.

26:44Well, you just teed up the next subject there, which is growth. Charlie, when Jersey Mike's announced your appointment, it listed in detail the tremendous growth that you have overseen at other brands that you have led. And surely that is one of the big reasons why you were appointed. And so I wonder as you come into a brand like Jersey Mike's, which is, which has already done such an incredible job of reaching consumers, of expanding its footprint, how you start to assess and identify where growth opportunities are. Yeah, it was a big key factor in how excited I was about the opportunity as well, when I learned of it.

27:25And I think there are a couple of factors at play. One, the unit economic model that benefits our franchisees is among the best in class. And one of the things that I mentioned to our franchise owners when I first came in was that their return on investment is my number one priority. And it should be each and every day. And so as I think about growth, everything we do should be pointed at what we call a cash on cash return or how much do you invest and how much do you get back such that franchisees not only earn a good living off of running the store or stores that they operate, but they actually create extraordinary value and have a strong desire to continue to grow the business well into the future.

28:07That's at the core of franchising. And so, you know, our focus going forward is to make sure that we maintain these great unit economics. The key to that is all about everything I've talked about to this point, which is keeping it simple, focused operation, execute on what the customer is looking for, create a great value for the consumer, and then making sure that we don't overcomplicate the business such that the economic model becomes challenged, which would ultimately slow growth. And so I will say that my partners at Blackstone and I and the management team are wildly aligned on that as a fundamental priority for where we go from here.