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Tax indigestion sends Jimmy John’s founder packing

Jimmy John Liautaud launched his now nationally acclaimed sandwich chain in Charleston, IL, in 1983. He owns substantial land in Champaign County, more than 3,000 acres. He is a benefactor of the University of Illinois. And he headquarters his company in Champaign.

 

Liautaud loves Illinois. But he can’t wait to get out.

 

The founder of Jimmy John’s first expressed interest in relocating his family in 2011, after Illinois lawmakers approved reckless personal and corporate income tax hikes, increases of 67% and 46%, respectively.

 

They’ve been living in south Florida ever since, with Liautaud commuting to and from Champaign.

 

Last week, Liautaud made another public pronouncement while attending a George W. Bush Institute conference in Chicago. Some time in “the next two to four years” he will move Jimmy John’s corporate headquarters out of Illinois as well.

 

Indiana and Texas are on his radar. Both states have courted him, enamored of Liautaud’s vision to expand his presence by another 20,000 square feet or more and to create a Jimmy John’s campus for company trainees.

 

The Jimmy John’s story is a case study for students of Illinois’ business climate, which they have been watching with utter disbelief as it deteriorates from bad, to worse, to incomprehensible. Not only are businesses unlikely to re-locate or expand into Illinois, but even a business and its owner that consider Illinois a part of their DNA are heading for the exits.

 

A new Jimmy John’s franchise opens every day somewhere in the United States, where there are 1,400 total stores and counting. In the Chicago area alone, Liautaud said last week, there are about 188 stores operated by 75 franchisees, many of whom are telling the boss that they’d like to own additional stores—but do not plan to do so on Illinois soil.

 

In Champaign alone, Liautaud told an interviewer in 2011, he employs more than 100 people in the corporate offices and flies in about 190 additional people once every four weeks. That activity accounts for 1,400 motel nights a month in Champaign, reported The (Champaign) News-Gazette.

 

Yet, as far as Liautaud can determine, Springfield lawmakers and Gov. Pat Quinn aren’t worried, dismissing him as “that horrible guy who does nothing but create jobs and demand accountability,” he said during his Chicago stop.

 

It’s that accountability gap that really eats at the otherwise gregarious Liautaud. He points to a rather eye-popping statistic: the six Jimmy John’s locations around Champaign take in more in sales tax than they collect in revenue. Liautaud knows where the revenue goes – into the pockets of hard working employees, into their savings, into the launch of another store for a successful franchisee. But he can’t be as certain about where the sales tax dollars are going.

 

“I really don’t mind the 5% (corporate) tax rate,” he said. “I just mind how they spend it.”

 

After nearly a quarter century building a better sandwich and a thriving business from his beloved Illinois base, native son Jimmy John Liautaud is so fed up that he’s willing to feed some other state’s economic engine.

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