How Jersey Mike's CEO Turned $125,000 Into $1 Billion
Originally Published at Inc.
Peter Cancro started slicing fresh meat and cheese in a local mom-and-pop sandwich shop in Point Pleasant, New Jersey when he was 14 years old.
Cancro wasn't a wealthy student. He played football, lifeguarded in the summers, and enjoyed working with a team making sub sandwiches at Mike's Subs, a popular coastal destination founded in 1956, a year after Mcdonalds started on the opposite end of the country.
In the spring of his senior year in 1971, Cancro learned the two brothers who owned the shop wanted to sell. Although he was planning on attending law school, a thought crossed his mind.
"My mother suggested that I buy it, so the next day I skipped school and knocked on doors trying to raise money," he told The New York Times in 2010.
Cancro's Pop Warner football coach, Rod Smith, who was also a banker, came through in the end and helped Peter get a loan to buy Mike's Subs. "I knew Peter could get the ball across the goal line," said Smith.
With the loan, Cancro bought out the owners for $125,000. He remembered walking the high school hallways when he was 17 and a business owner.
The Scariest Moment of His Career
In 1987, Cancro responded to customer demand and franchised the business across the country, adding the famous shop's state of origin to the name: Jersey Mike's, to retain its authentic roots.
The company took off and spread like wildfire. But, as is typical when a company invests in growth too fast, expenses can scale faster, too. In 1991, a recession hit and Cancro found himself in hot water. "The banking environment went south. It was the worst recession of my life," said Cancro. "No one could borrow money."
It was one of the scariest moments of his career. To survive, he had to lay off six people, including his own brother John. "I remember standing in the 400 square foot office of our second store and thinking, 'it's over.'"
Fast forward to 2018 and Jersey Mike's does a billion dollars in annual sales with 1400 locations in 45 states. The submarine sandwich restaurant has won the award for the fastest growing franchise concept in America for the last four years in a row. And Cancro says, "We're just getting started." In the next five years, the CEO expects to double Jersey Mike's to $2 billion in annual sales and 3,000 locations. Cancro told me 65-70% of current franchise owners are adding another store to their portfolio.
How does a company rebound from the brink of bankruptcy and grow to a billion in sales?
Below, the 61-year-old founder, who's celebrating his 43rd consecutive year as CEO of Jersey Mike's Franchise Systems, Inc., reflects on the four decades at the helm of Jersey Mike's and shares what he's learned as an entrepreneur and CEO.
Peter Cancro's 5 Key Lessons From Managing a Billion Dollar Franchise Corporation for 43 Years
1. The differentiator between a successful franchise owner and an unsuccessful one is energy.
"You can line up 15 people in a room, I'd look at the group and I'd say that one and that one," said Cancro. "It's difficult to describe what I'm looking for," he wrote. "I've seen what works and what doesn't; it's a gut feeling I have." When I asked him if he had any more insight as to what this trait is, he said it's a realness, a genuineness, that seeks to raise people up. And he can tell it right away just by the way they walk... and how they slice meat and cheese.
2. Giving to give is the best marketing.
Every year, on the last Wednesday of March, Jersey Mike's hosts a "Day of Giving" during which the brand donates 100% of its sales to local charities. At the end of the day, around $5-$7 million will go to nonprofits, kids in school, and hospital initiatives across the country. "We've done it since 1975," said Cancro. The tradition comes from the time one of his mentors, Bob Hoffman, an 85-year-old ice cream store owner, walked into Cancro's shop and put an ice cream cake on the counter that said, "Congrats Peter." "We don't say giving back. We say giving. Because we are giving to give--to make a difference in someone's life." For many years, this cause-related marketing has been core to Jersey Mike's overall growth strategy.
3. You don't need to be a hero. Just show up every day.
If you ask Peter Cancro a typical career question such as "How did you do it?" He'll tell you: "Well, I showed up every day for the last 43 years. Several years ago, I lifted up my head and realized, whoa, we're doing well." He confesses he's old-fashioned and that while he's a big fan of the entrepreneurial spirit, he doesn't overvalue the all-star. "Sometimes entrepreneurs are not the best to have in the franchise business," he says, "You want someone who shows up every day, who will be present, gain ten yards, and move the chains. And you never know, sometimes, you break tackles."
4. The best way to inspire in the trenches is to roll your sleeves up.
When we spoke, Cancro was in the middle of a country tour, traveling from places like Portland to Phoenix to San Diego, visiting local Jersey Mike's stores.
I asked him when he walks into a store, what does he say or do to best inspire the owner and the staff behind the counter?
"I say nothing," he said. "I walk in wearing a white oxford shirt with the sleeves rolled up and I start cleaning the grill. I get right in their with them." He joins the line, starts making a sandwich, and turns to the teenage sandwich maker next to him, and asks, "How am I doing?" The teenager usually responds, "Yeah, you're doing okay," and smiles. "It levels the playing field," said Cancro. "And resonates. When I was 14-years-old, it felt like a small family nucleus. That's what I want for our store teams today."
5. His favorite management question: "What do you think?"
It's always interesting to hear how busy CEOs use their time. Cancro's number one productivity tip is to play head coach. "Don't do everything. Communicate. You can read a lot about leadership in books, but my favorite question to ask is 'What do you think?' It doesn't mean you should always do what they say. But if you really mean it, you can get a lot of insight from people."