What are some of the conditions that Jersey Mikes may impose on its consent for an Ownership Interest Transfer?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
- 19.2 Conditions to Voluntary Transfer of Rights. Neither Franchisee nor any Principal (defined in Section 31) shall effectuate an Asset Transfer (defined in Section 31) before the Franchised Restaurant opens for business under any circumstances. After the Franchised Restaurant opens for business, any Asset Transfer will be subject to Franchisor's prior written consent, in its sole and absolute discretion. Franchisor may condition its consent on compliance with certain requirements, including, without limitation, any of the following (which Franchisee agrees are reasonable):
- a. At the time of A sset Transfer, Franchisee is in full compliance with Franchisee's obligations under this Agreement and all other agreements between Franchisee and Franchisor and its Affilia tes, including payment of all monetary obligations due Franchisor and its Affiliates;
- b. The transferee executes Franchisor's then-current form of franchise agreement, Guaranty and Assumption of Obligations, and other collateral agreements Franchisor
- may then require, and each principal of the proposed transferee meets Franchisor's criteria for qualifying as a new franchisee;
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, transferring ownership has specific requirements. Jersey Mike's may require that at the time of the asset transfer, the franchisee is in full compliance with all obligations under the Franchise Agreement and any other agreements with Jersey Mike's and its affiliates, including payment of all monetary obligations.
Jersey Mike's may also require the transferee to execute the then-current form of franchise agreement, a Guaranty and Assumption of Obligations, and other collateral agreements. The principals of the proposed transferee must also meet Jersey Mike's criteria for qualifying as a new franchisee. Additionally, the transferee must provide Jersey Mike's with a waiver and release regarding liability for any financial data, earnings claims, representations, or other information provided by the developer or its representatives.
Furthermore, Jersey Mike's may require each principal to execute a Guaranty and Assumption of Obligations. The transferee and their controlling principal or designated manager may need to satisfactorily complete Jersey Mike's Area Developer training program, if any. The transferee and their principals must apply for acceptance as a Jersey Mike's developer and furnish any requested information to determine their skills, qualifications, and economic resources.
Jersey Mike's may also require the transferee and their principals to demonstrate that they possess the necessary skills, qualifications, ethics, moral values, and economic resources to develop Jersey Mike's restaurants and fulfill their obligations. If the transferee or its principals are existing Jersey Mike's franchisees, they must be approved for growth by Jersey Mike's. Finally, Jersey Mike's will require a transfer fee of $5,000 for services related to approving the transfer of the Development Agreement, and an additional $5,000 for each Franchise Agreement transferred to the transferee. The developer and its affiliates must also provide an unconditional release of all claims against Jersey Mike's.