What constitutes an Event of Default for a Jersey Mikes franchise, specifically regarding the Maker's obligations under agreements with the Holder, Franchisor, or their affiliates?

According to the 2025 Jersey Mikes Franchise Disclosure Document, if the Maker (franchisee) defaults on its obligations to open the Restaurant, the Maker is responsible for its obligation to pay the Total Advance in accordance with the terms of the Promissory Note. The "Total Advance" refers to the amount that the Holder distributes in connection with approved items necessary for opening the Jersey Mikes restaurant.

Specifically, if the cost of these approved items exceeds the Approved Total Advance, the Maker is required to use their own funds to cover the difference. This ensures the Maker can fulfill their obligations to open the Jersey Mikes restaurant as outlined in the Franchise Agreement.

This arrangement means that a prospective Jersey Mikes franchisee needs to be prepared to cover costs beyond the initial Total Advance if necessary to open the restaurant. Failure to meet these financial obligations could lead to a default on the agreement, with potential consequences for the franchisee.