What constitutes a termination by a Jersey Mikes franchisee without cause?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
17.1 If Franchisee is in substantial compliance with this Agreement and Franchisor materially breaches this Agreement and fails to cure such breach within a reas onable time after written notice by Franchisee is delivered to Franchisor, Franchisee may terminate this Agreement. Such termination shall be effective thirty (30) days after delivery to Franchisor of notice that such breach has not been cur ed and Franchisee elects to terminate this Agreement. A termination of this Agreem ent by Franchisee for any reason other than breach of this Agre ement by Franchisor and Franchisor's failure to cure such breach
within a reasonable time after receipt of written notice of default has been received by Franchisor shall be deemed a termination by Franchisee without cause.
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mikes's 2025 Franchise Disclosure Document, a franchisee-initiated termination is considered 'without cause' unless it stems directly from Jersey Mike's breach of the agreement. Specifically, if Jersey Mikes fails to correct a material breach within a reasonable timeframe after receiving written notice from the franchisee, the franchisee can terminate the agreement. Any other reason for termination by the franchisee is classified as a termination without cause. This distinction is important as it can affect the financial and legal obligations of the franchisee upon termination.
In practical terms, this means that if a Jersey Mikes franchisee wants to end the franchise agreement, they must have a very clear and documented reason related to Jersey Mike's failure to uphold their end of the agreement. Simply being unhappy with the business, wanting to pursue other opportunities, or facing financial difficulties are not considered 'cause' for termination under the agreement. The franchisee bears the burden of proving that Jersey Mikes materially breached the agreement and failed to cure the breach after proper notification.
This clause protects Jersey Mikes by ensuring franchisees cannot easily exit the agreement without facing potential financial repercussions. Franchisees should carefully consider this provision and seek legal counsel to fully understand their rights and obligations before signing the franchise agreement. Understanding the specific conditions that constitute a breach by Jersey Mikes, and the proper notification procedures, is crucial for franchisees who may consider termination at some point during the franchise term.