#13: How Andy Jacobi Picks the Next Big Food Brands

Andy Jacobi: Doing great. Thanks, Daniel. Good to be here. Daniel Tsentsiper: Absolutely. Thank you. Thank you for joining us. We were talking earlier about your journey to starting off and I want you to talk to our audience about it because I think it's a really good example of anyone from any background could become a franchisee, could start or even a restaurant themselves. Want to take us maybe back to maybe when you were in business school, right? So, or even before that, you worked in finance, is that correct? Andy Jacobi: Yeah, that's right. Sure. Yeah. I'm happy to walk through my background. So yeah, I started my career straight out of college in finance. I worked in investment banking and private equity for five years. It was a great way to start your career, you know, there was something about the food industry that was always a passion of mine. So I was, I found myself even when I was in finance, my last couple of years, I was working for a generalist private equity, private debt shop. I found myself kind of always gravitating towards food related deals. And I thought that was a good sign that a career pivot was in order. I then did go back to business school though, but with the intention of coming out and doing something more entrepreneurial. I had worked in restaurants kind of as a kid, kind of to make money, but I had never taken it very seriously. But decided coming out of school to start a restaurant with a friend. I had been working part-time while I was in business school, helping a grass-fed meat company build up a business on the East Coast. And one of my customers was a chef and we started talking about a sandwich shop concept that became Untamed Sandwiches. So I graduated from business school in 2012, opened up our first location a couple years later. First couple did quite well, then we opened up a couple more and they didn't do so well. So around 2018, 2019, we decided to start selling off the business. It was an amazing experience and a great learning experience. I obviously wished it had legs to really scale much bigger than just four locations. And I think what happened with location three and four is I think we started to realize that it was not as scalable of a concept as we had hoped. So sold that off in 2018, 2019. And over the course of the next five years, I worked for a few different brands. Started out working for a company called Taïm, which is a Mediterranean concept. I led operations for them for the year leading up to COVID. COVID put a real hurt on that business where kind of all of their locations were central business district locations. Moved on kind of at the start of COVID as we were kind of furloughing all of our employees and closing down locations. I moved over to a company called Sticky's, which is a fried chicken and French fry concept. At the time we had 10 locations open and we got up to 14. I was the CFO there for a few years. Again, great business in that everyone loves chicken and it's a very high margin business model. But, of course, also heavy exposure to New York City during a time when that was challenging. So, you know, we got the business to a good spot, but really needed capital to be able to expand dramatically beyond the New York City footprint. And for various reasons, we were just never able to get that over the finish line. So I left Sticky's in 2022 and moved to Chicago in part for a role, in part for family reasons. But I then led the finance function for a company called State of Play. It's a UK based company, but the U.S. team is based here in Chicago. State of Play is a social entertainment holding company. There are three concepts in the stable: Flight Club (a darts concept), Bounce or Ace Bounce (a ping pong concept), and High Jingo (a video bingo concept). What all of them did similarly was take a simple game and pair it with really good food and beverage, as well as technology to enhance the gameplay and automate the scoring. It was really attractive for a corporate audience, especially in 2022 as companies tried to bring employees back to the office and create meaningful interactions. It was a really interesting business model. But I think ultimately what led me to leave was it had been at that point six years since I had sold off Untamed. I was starting to feel this itch of entrepreneurship again. Untamed was both incredibly rewarding and challenging. One thing I learned and tell every aspiring restaurateur: opening a single-unit, new-concept, fast casual restaurant is so hard. The probability of getting to a liquidity event is so low that it’s just a really tough thing to do. I don’t think I would ever do that again. But what happened about a year ago is I started talking to a friend of mine who had also opened up a sandwich shop concept in New York a couple years before me. He was looking at a couple of portfolios of Popeyes in the Chicago area. We started talking about franchising and what these businesses had going for them. That deal ended up not working out, but what came out of that was a great partnership. Michael, my friend, showed me how attractive the franchising model is if you're in the right concept. It seemed like a really cool opportunity to apply the skills we had built up over the prior 15+ years to a business model with a much lower risk profile than investing in independent brands. Both of us had spent so much of our careers building and supporting independent brands, and we were excited to not do that again for a while. Instead, we wanted to focus on executing on already proven concepts. Daniel Tsentsiper: There's a lot there to double tap on. You brought up a really good point—many restaurant owners face the decision of going independent for creativity and control vs. choosing the franchise model for lower risk and a clear playbook. There’s a new idea that’s been gaining traction: the modern franchise. Small independent shops use franchise-style tools—delivery platforms, off-the-shelf back-office and front-office tools—to run more effectively. With all this hindsight, would you still have opened your own restaurant, or pursued franchising earlier? Andy Jacobi: I think I still probably would have done what I did—because I was a foolish 25-year-old and that’s what you do. But your point is valid. There are so many off-the-shelf software tools now that make it easier—relatively speaking—to run a restaurant. That said, what you can't replicate is the brand power of a really good franchise. Fast forward—we’re now engaged with Jersey Mike’s. We have a three-store development agreement in Illinois and are building them out. What makes Jersey Mike’s special is that you know it’s going to work. It’s worked 3,000 times across all kinds of markets. When you’re building an independent brand, it might catch fire with three or four shops. But scaling to 100 units, entering completely different markets—that’s a different ballgame. Working with a national brand that has crossed those hurdles gives you a level of comfort that SaaS tools alone can’t offer. Daniel Tsentsiper: When evaluating brands to invest in, there's that playbook: high growth, good unit economics, strong identity. Others might be trading at a discount and are turnaround bets. What's your philosophy? Andy Jacobi: We looked at a number of brokered deals—brands with lower growth where the opportunity is to buy a portfolio at a multiple of LTM EBITDA, leverage it, try to squeeze some margin, and sell in five years. That’s a valid approach. But our fear was signing development agreements we wouldn’t fulfill. We wanted brands where it made sense to develop. We use three criteria: Brands with at least 1,000 units. 30%+ cash-on-cash returns for new builds and room to develop. A strong history of same-store sales growth—even if they’ve plateaued recently, that can lead to better acquisition multiples. Jersey Mike’s fits that perfectly. It costs about $650K to build, generates $1.3M+ in AUV, and has national growth ambitions. Daniel Tsentsiper: That makes a ton of sense. But getting into these brands isn’t easy. How did you break into Jersey Mike’s network? Have there been challenges starting up in franchising? Andy Jacobi: Every franchisor is different in what they look for. We created a database of economics and trends across brands using their FDDs. We then reached out to the brands we liked. Jersey Mike’s historically hasn’t allowed outside acquisitions—you get in by developing. Acquiring existing stores is hard: you need approval from the franchisor, agreement with the franchisee, and financing. We know we’ll lose many of these deals. So we focus on building a steady pipeline and relationships with franchisors. Daniel Tsentsiper: How are you building those relationships? Andy Jacobi: Any way we can. Cold outreach. Asking mutual contacts. Attending conferences—we’re not everywhere, but we show up to some key ones. Those in-person conversations help. Daniel Tsentsiper: What’s your working dynamic like with Michael? Andy Jacobi: We’ve both had partners before and learned what works. I focus more on ops and finance, he’s strong in real estate and tech. We have a similar worldview and goals. That mutual respect and shared decision-making makes it work. We talk everything through. No egos. Daniel Tsentsiper: That’s what it takes. And I love that you’re bringing complementary skills. One of the goals of this show is to highlight modern operators—people entering the space in unconventional ways, doing right by guests and employees. What’s the goal with JFP? Andy Jacobi: We want to keep doing this. We’ll build up assets and create liquidity for investors, but for Michael and me, this is the industry we love. We want to invest across brands using our skills to build great businesses inside successful franchises. Daniel Tsentsiper: If you had to look beyond restaurants—any franchise segments interest you? Andy Jacobi: Health and wellness is interesting. There aren’t many low-risk scaled brands yet, but a few are getting there. We’d love to explore those eventually. But for now, we’re focused on restaurants. Daniel Tsentsiper: I’d look for tech-enabled franchises too—like the ones you saw in social entertainment. That’s where margins improve with automation. Last question. Who do you look up to in the restaurant world? Andy Jacobi: I knew this was coming. I’ll say Andy Pforzheimer. I’ve met him a few times and what stands out is—he’s always himself. No matter the setting. He’s direct, consistent, and walks the walk. I love his quote: “Whatever you settle for becomes your standard.” That stuck with me. Daniel Tsentsiper: I love that. He’s gotten a lot of love from this show. And you too—really enjoyed this conversation. Can’t wait to see what brand you enter next. Good luck with Jersey Mike’s, and hope to see you at NRA. Andy Jacobi: Absolutely. Thanks, Daniel.