What are the conditions that each Principal must satisfy to continue as a Developer after the death or permanent disability of a Controlling Principal for a Jersey Mikes franchise?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Upon the occurrence of an event described in Section 8.8(a), a Principal of Developer shall notify Franchisor of the event and indicate Developer's intention of continuing to operate Developer's Business consistent with the terms of this Section 8.8(b).
During the first one hundred twenty (120) days after the death or Permanent Disability occurs, Franchisor shall evaluate the interim management's willingness and ability to operate the Developer's Business in compliance with this Agreement.
By the end of the one hundred twenty (120)-day evaluation period, Franchisor shall decide whether the interim management is qualified to manage the Developer's Business and become its Controlling Principal, and shall notify Developer's known Principals of its decision.
As conditions to continuing as a Developer, each Principal shall furnish Franchisor a signed Guaranty and Assumption of Obligations and any deficiency in Developer's compliance with the requirements of this Agreement shall be cured within the time frame prescribed by Franchisor.
Further, Franchisor may require the new Controlling Principal or designated manager to attend and satisfactorily complete the Franchisor's initial training program.
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mikes's 2025 Franchise Disclosure Document, Section 8.8 outlines the conditions that must be met for the remaining Principals to continue as a Developer after the death or permanent disability of a Controlling Principal. First, the death or permanent disability must result in a change in executive-level responsibility for managing the Developer's Business. Following such an event, a Principal must notify Jersey Mikes of the event and indicate their intention to continue operating the Developer's Business.
During the 120 days following the death or permanent disability, Jersey Mikes will evaluate the interim management's willingness and ability to operate the Developer's Business in compliance with the Development Agreement. By the end of this evaluation period, Jersey Mikes will decide whether the interim management is qualified to manage the Developer's Business and become the new Controlling Principal, and will notify the Developer's known Principals of its decision.
To continue as a Developer, each Principal must furnish Jersey Mikes with a signed Guaranty and Assumption of Obligations. Additionally, any deficiencies in the Developer's compliance with the requirements of the Development Agreement must be corrected within the timeframe prescribed by Jersey Mikes. Jersey Mikes may also require the new Controlling Principal or designated manager to attend and satisfactorily complete the initial training program. If these conditions are not met, the surviving Principals have 120 days after receiving notice from Jersey Mikes to either find a new Controlling Principal acceptable to Jersey Mikes or sign a binding contract to sell the Developer's Business to a buyer approved by Jersey Mikes.