As a 24-year-old Jimmy John’s franchisee with eight restaurants and counting, Maxwell Fulton doesn’t want anyone to think he simply inherited his success. “Sometimes people think, ‘Oh it’s a young franchisee, he must have been handed this,’” he explains. But Fulton’s experience says otherwise. 

When Fulton became a general manager at Taco Bell at 18 years old, he already had his career path mapped out. He knew he wanted to “be in this business and make something of myself” as a future franchise owner, and he knew he had to align himself with the right leaders to help get him there.

After joining Domino’s in 2020 as a district manager, Fulton quickly rose through the ranks and began running stores in the Washington, D.C. area as manager of corporate operations. There, he learned the important skill (alongside the rest of the restaurant industry) of managing staff during a global pandemic and subsequent tough labor market. 

“[Concepts] in the pizza segment are some of the ones having the toughest time staffing delivery,” Fulton says. “A lot of it comes down to what kind of schedules and wages you can offer them, as it’s a very competitive segment. Typically, we see the ones that cannot staff delivery employees are the ones that don’t offer competitive wages.”

Though raising wages can be expensive upfront, having a higher percentage of delivery roles staffed allows restaurants to be able to handle a greater volume of delivery sales, versus having to shut off delivery because of staffing shortages, Fulton explains.

“People in this industry constantly highlight how tough staffing is, but is your franchise appealing to be employed at?” Fulton says. “I think people have to look in the back lens and look at their business and employees and say, ‘Would I want to have a job here? And what can I do to make it appealing from a benefits, from a life-balance perspective, and from a compensation perspective.’”

Fulton knew he had more to learn before becoming a franchisee himself, so he became a franchise operations consultant for Burger King’s parent company, Restaurant Brands International, in the U.S. southeastern division for 250 locations. 

“From that point, taking that step into franchising is not as challenging as it seems, and I always had people who wanted to back me financially, who wanted to back restaurants but remain absentee,” he says. 

While looking into opportunities toward the end of 2021, Fulton came across Jimmy John’s, which he saw a lot of potential in to grow across the East Coast.

“I wanted to join a concept that had a solid backing, and I liked it was owned by Inspire,” Fulton says. “I wanted the Inspire family and beliefs, advantages from a tech standpoint, and leading the competition in a sense.”

So in an impressive roll-up acquisition that took about five months, Fulton consolidated seven Jimmy John’s units—six in Maryland, and one in York, Pennsylvania—from three franchisees, which meant adjusting three separate teams to one set of systems, a challenge for even the most seasoned entrepreneur. 

“It was definitely unique and challenging to consolidate three franchisees and close them. We bought all of them on the same day, so that was fun,” Fulton says. “But it’s definitely paid off, and we’re seeing quick positive movement. We’ll be a success story when it comes to Jimmy John’s in this section of Maryland and what’s possible.”

The deal, which closed in November 2022, also included a development agreement to build five additional locations in the Baltimore area. As of press time, Fulton had two locations in development in Eldersburg, Maryland, and Lancaster, Pennsylvania, with eight more in the pipeline.

“The main selling point was having delivery in-house instead of using DoorDash and Uber Eats, which is a significant advantage on competition from a financial standpoint,” he says. “While most competition is challenged by high delivery fees, with an in-house program, we have the advantage to push that and still have a decent EBITDA line on it, as well.”

Plus, there’s also the potential to expand outside of Jimmy John’s and become a franchisee of other concepts, Fulton adds; Inspire Brands’ portfolio also includes Arby’s, Buffalo Wild Wings, Sonic, Dunkin’, and Baskin-Robbins.

When entering the Jimmy John’s system, Fulton noticed a plethora of franchisees with one or two units wanting to exit—so Fulton plans to continue acquiring more Jimmy John’s in the Mid-Atlantic region under Fulton Holdings. 

“Like any concept, COVID has been very challenging on the smallest operators, which has allowed us to expand and buy out these one-to-two unit franchisees,” he says. And buying seven units at one time enabled Fulton the bandwidth to pay workers a higher base salary, compared to starting with one or two units.

In a unique move compared to many franchisees, Fulton eliminated the tipped wage and pays delivery drivers a $15 minimum wage, the same as all his other employees—which has resulted in their restaurants being 107 percent staffed recently, he says. The higher cost of labor to keep drivers in-house is preferable in Fulton’s book and is still feasible from a financial standpoint versus paying third-party delivery app fees, he explains. It also allows them to be an employer of choice.

“Since enacting the change, I’ve only done a modest price increase of about 7 percent, but my stores are 40 percent more profitable from prior ownership levels even with the higher wages,” he says. “By increasing our staffing, our year-over-year sales comps are three times the brand average, leading to the higher profitability.”

As for the future, Fulton plans on opening two units a year through 2026, starting in 2023. Unsurprisingly, Fulton’s ambitious nature means he entered into the system with the ultimate goal of quickly becoming a franchisee with more than 20 locations.

“From a DNA standpoint, the landscape that used to be viable of having one or two units is just not appealing these days from an economic standpoint and average EBITDA,” he says. “Expansion and having a significant return on investment gets you to high enough unit counts and total sales to be able to have the capital to pull in talent.”

After acquiring the seven units, an immediate change Fulton made was adding another assistant general manager to each location with the goal of promoting them into general manager positions as they open new locations, essentially building a general manager bench. 

Fulton is also a “big believer” in having one district manager for every five units, so he currently has two district managers and recently hired a new head of construction to handle new builds, as well as a head of new openings. 

“I was only able to make it to this point because I specifically accepted jobs because of the leaders who could answer my questions and guide me, maximizing my knowledge to set me up for success instead of going in blind,” Fulton adds.

“When you look at a new job, don’t only interview for salary and compensation, but look at who your boss would be,” he advises young entrepreneurs. “Make sure it would be a good fit and get with somebody that can develop you down the line, and not just develop by building and promoting you, but from a knowledge perspective.”

Business Advice, Employee Management, Fast Casual, Fast Food, Franchising, Growth, Operations, Restaurant Operations, Story, Jimmy John's