When Jersey Mike’s announced its sale to Blackstone in 2024, the reaction from consumers was almost immediate, and it wasn’t entirely favorable.
The private-equity firm, people said, were bound to ruin a chain that had been a pillar of quality for a half century. And then, one year after the deal was complete, some of them took the extraordinary step of going back to Jersey Mike’s to compare the sandwiches they get today compared with back then.
Charlie Morrison, who took the helm of the chain after founder Peter Cancro stepped aside following the sale, knows that consumers are paying close attention. And he has no desire to follow through on any so-called private-equity destruction of Jersey Mike’s.
“We’re not going to change anything,” Morrison said in an interview at the recent ICR Conference. “There’s no need to change it. We’ve had 20 consecutive years of same-store sales growth. We’re opening 300 units a year on average over the last five years. Why would we modify that?”
It’s understandable that consumers would be concerned. Private-equity moves have destroyed a lot of restaurant chains. They sometimes push overly aggressive growth or they load companies up with too much debt or sell off real estate or cut too many costs or do some other stupid stuff. And consumers are paying close attention.
But it’s better that consumers have enough loyalty to a brand to want to pay that kind of attention, which is something that Morrison can work with. “Consumers watch very carefully,” Morrison said. “They watch and monitor brands like they’ve never done before, and that loyalty comes through, continuing to demonstrate that your brand has real purpose in the food you serve, what you say, how you behave.
“Everything matters. And I’ve become a big believer of that in my 35-plus years of my career, that you have to stay true to who you are as an organization. I think Blackstone recognizes that.”
Cancro bought Mike’s Sub Shop as a teenager and grew it into Jersey Mike’s. He operated the franchise in a way that most brands would not. He once paid for franchisees to remodel their units and made a profit off of the increase in royalties that resulted from all those new locations. He also returned franchise fees to operators after telling them to stop developing new locations until they got operations up to snuff.
That’s the sort of culture that helped turn the chain into one of the industry’s most consistently successful concepts.
Changing owners—and longtime CEOs—can change a company’s direction and culture enough that it does do damage. It’s in Morrison’s best interest, therefore, to maintain the corporate culture that led to that kind of growth in the first place. “The culture is very strong,” he said. “The culture was developed in such a way that it can even survive this much change quite well.
“We haven’t done anything meaningfully different, and we shouldn’t. It’s a great brand.”
To be sure, it’s not like Morrison won’t do anything different. No company is without need for some change, and even successful brands have to keep pushing to maintain their status.
Morrison mentioned “amplifying” what the company has been doing. “I think we have an opportunity to expand our footprint and be even better than we are today,” he said. “We have a great technology stack that’s been built and developed over a long period of time. I think it can be optimized to make sure that we’re offering an occasion that fits every consumer’s need.”
Of course, even if Morrison felt the need to do something huge, he does have the founder, Cancro, as the company’s chairman. And now Cancro will be the company’s developer in the U.K. and Ireland, so it’s not as if he’s gone completely.