Sandwich chain Jimmy John’s is planning to announce an initial public offering as early as next week, a source told The Huffington Post.
The deal will value the company around $2 billion, people who have seen the deal documents say. Morgan Stanley, Piper Jaffray and Jefferies are listed as underwriters on the transaction. Morgan Stanley is the most senior, or “lead-left,” bookrunner.
The roadshow to market the company’s shares is scheduled to begin Oct. 20, with the stock to be priced Oct. 28, according to a document produced by the underwriters.
The deal is code-named “Rockit," the document obtained by HuffPost shows. "Rock.It" is the name of company founder Jimmy John Liautaud's 197-foot, 11-inch yacht.
Reuters reported in May that the company was planning a public stock offering that would value the company at more than $2 billion, including debt. In 2014, the company reportedly explored the sale of a “major stake” to additional investors.
Jimmy John’s has about 2,000 locations, Reuters reported, and most of those stores are owned by franchisees. The company has earnings before interest, tax, depreciation and amortization of about $150 million annually, according to Reuters.
Many low-wage Jimmy John's workers have been asked to sign controversial non-compete agreements as a condition of working in the company's stores, HuffPost’s Dave Jamieson reported last October.
Jimmy John’s franchise owners are frustrated by what they feel is a shift in how the company treats them, from a feeling of partnership and cooperation early in the company’s history to a sense of disdain and dismissal more recently.
One contentious issue is the rollout of a new credit card security system. Jimmy John’s confirmed in September 2014 that it was hacked through its point-of-sale system, allowing unauthorized remote access for about two and a half months. The company has stuck with the same security company, Signature Systems, despite serious concerns raised by an outside security analyst hired by franchisees. The company’s IT head is a former general manager with no background in technology, security or vendor management.
The company also, without explanation, said at the end of December 2013 that it would change the way it reimbursed corporate-owned store drivers for mileage beginning Jan. 1, 2014, according to a company email. It moved from paying drivers 5 percent of the sale to 56 cents per mile. The company did not inform franchise owners until May 2014 that paying drivers a percentage of a sale, as had been standard practice embedded in company-provided software, was not technically a reimbursement under federal labor law.
Jimmy John's declined to comment, as did spokeswomen for Morgan Stanley and Jefferies. Piper Jaffray did not immediately respond to a request for comment.
This post has been updated to note Jefferies and Jimmy John's declined to comment.