What actions related to insolvency or bankruptcy can lead to automatic termination of the Jersey Mikes franchise agreement?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
- h.
Acknowledges that Franchisee is unable to pay its debts as they come due or commits any other affirmative act of insolvency, or files any petition or action of insolvency, or for appointment of a receiver or trustee, files a petition in bankruptcy or makes any assignment for the benefit of creditors, or fails to vacate or dismiss within sixty (60) days after filing any such proceedings commenced against Franchisee by a third party;
- i.
Is subject to a dismissal of a liquidation proceeding according to 11 U.S.C.
Section 707, dismissal of a reorganization proceeding according to 11 U .S.C.
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mikes's 2025 Franchise Disclosure Document, the franchise agreement can be automatically terminated if the franchisee takes certain actions related to insolvency or bankruptcy. Specifically, the agreement will terminate automatically if the franchisee acknowledges an inability to pay debts as they become due, commits any affirmative act of insolvency, files any petition or action of insolvency, or seeks the appointment of a receiver or trustee.
Additionally, the franchise agreement can be terminated if the franchisee files a petition in bankruptcy or makes any assignment for the benefit of creditors. Furthermore, failure to vacate or dismiss any such proceedings commenced against the franchisee by a third party within sixty (60) days after filing also constitutes grounds for automatic termination.
Finally, the agreement can be terminated if the franchisee is subject to a dismissal of a liquidation proceeding according to 11 U.S.C. Section 707, or a dismissal of a reorganization proceeding according to 11 U.S.C.