What aspects of the Jersey Mikes franchise agreement are addressed in the table?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
state specific addenda) |
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| g. "Cause" defined | Sections 17.2 and 17.3 | You fail or refuse to make payments due Company and do not cure within 10 days, you materially misuse the Marks and do not cure within 7 days or fail to comply with mandatory specifications in the Franchise Agreement and do not cure within 30 days. |
| (defaults which can be | ||
| cured) | ||
| h. "Cause" defined (defaults which cannot be cured) | Section 17.2 | Non-curable defaults: failure to decorate the Premises or complete training; making a material misrepresentation or omission in application for the franchise; conviction or plea of no contest to a felony or other crime or offense that can ad versely affect the reputation of you or the Franchised Restaurant; misuse or unauthorized disclosure of information in the Manual; abandonment of business for 2 days in a 12 month period; surrender of control of business; submission of reports understating Continuing Royalty Fees by more than 3% for weekly periods more than twice during the term of the franchise; failure to submit reports on 2 occ asions in any 12 month period; your insolvency or bankruptcy; you commit any act which can reasonably be expected to materially impair the goodwill associated with any Marks; continued violation of any health, safety or sanitation law or or dinance; failure to pay taxe s when due and payable; failing to open the Restaurant by the Open ing Deadline; failing to comply with the Franchise Agreement on 3 or more separate occasions within any 12 consecutive month period; failing to comply with the same obligation under the Franchise Agreement on 2 or more separate occasions within a ny 12 consecutive month period; and termination of another agreement between you (or your affiliate) and Company (or its affiliate). |
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| i. Your obligation on termination/non-renewal | Section 18 | Obligations include: stop op erations of the Franchised Restaurant; assign lease to Company at Company's request; stop using the Marks and items bearing the Marks; assign any assumed names to Company; de-identify the Premises from any confusingly similar decoration, design or other imitation of a JERSEY MIKE'S Restaurant; pay all sums owed to Company; pay liquidated damages to Company an amount equal to: (a) the average royalty fees and advertising fe es payable by Franchisee each month over the 12 month period immediately preceding the date of termination (or, if the Restaurant has been open less than 12 months, the average royalty fees and advertising fees payable by Franchisee each month the Restaurant was open); (b) multiplied by the lesser of (i) 36 months, or (ii) the number of months then remaining in the then-current term of the Agreement; stop advertising as a Franchised Restaurant; pay all damages and costs incurred by Company in enforcing the termination provisions of the Franchise Agreement; return or destroy (as Company requires) all manuals and other confidential information; sell to Company, at Company's option, all inventory, equipment, supplies and items bearing the Marks; sell to Company, at Company's option, all assets of the Franchised Restaurant; assign your telephone and facsimile numbers to Company; comply with the covenants not to compete; and cease using any Online Presence and disable, cancel or transfer all such Online Presence to Company. Unless Company and Franchisee agree upon a price, when selling any equipment or assets to Company, "Fair Market Value" will be determined by an accredited appraiser chosen by Company and you. The appraisal costs are shared equally by Company and you. |
| j. Assignment of contract by Company | Section 19.9 | No restriction on Company's right to assign. |
| k. "Transfer" by you definition | Section 31 | Includes transfer of your a ssets, any rights under the f ranchise agreement, or a change of ownership of any interest in an entity which owns the franchise. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–64)
What This Means (2025 FDD)
According to Jersey Mikes's 2025 Franchise Disclosure Document, the table outlines key provisions within the franchise agreement related to termination, transfer, and assignment. Specifically, it addresses the franchisee's obligations upon termination or non-renewal, Jersey Mikes's right to assign the contract, the definition of what constitutes a transfer by the franchisee, Jersey Mikes's approval process for transfers, and the conditions Jersey Mikes may impose on a transfer.
The table details the franchisee's responsibilities when the franchise agreement ends, including ceasing operations, assigning the lease to Jersey Mikes if requested, discontinuing the use of Jersey Mikes's trademarks, and de-identifying the premises. Furthermore, the franchisee is obligated to pay all outstanding amounts, potential liquidated damages, and costs incurred by Jersey Mikes in enforcing the termination provisions. The franchisee must also return or destroy confidential information and may be required to sell inventory, equipment, and assets to Jersey Mikes at fair market value, determined by an appraiser.
Regarding transfers, the table clarifies that any transfer of assets, rights under the franchise agreement, or a change in ownership of an entity owning the franchise is considered a transfer. Jersey Mikes retains the right to approve or deny any transfer, and can place conditions on its approval. Jersey Mikes has no restrictions on their right to assign the agreement.
Prospective franchisees should carefully consider these provisions, as they outline the conditions under which they may lose their franchise and the financial implications of such termination or transfer. Understanding these terms is crucial for making informed decisions about entering into a franchise agreement with Jersey Mikes.