What does 'Control' or 'Controlling Interest' mean in the context of a Jersey Mikes franchise?

According to Jersey Mike's 2025 Franchise Disclosure Document, "Control" or "Controlling Interest" refers to the power to direct the management and policies of an entity. This power can be exerted directly or indirectly, through various means such as ownership of voting securities, contractual agreements, or by operation of law. In essence, it signifies the ability to influence and determine the direction of the business.

For a prospective Jersey Mike's franchisee, understanding this definition is crucial, especially when considering business structures like corporations or partnerships. If the franchisee operates as a business entity, any transfer of ownership interests that results in a change of control may trigger certain requirements or restrictions outlined in the franchise agreement. For instance, Jersey Mike's may need to approve the transfer, and transfer fees might apply.

Jersey Mike's also defines a "Controlling Principal" as the individual designated by the franchisee and approved by Jersey Mike's who is responsible for operating the Restaurant and ensuring compliance with the franchise agreement. This highlights the importance Jersey Mike's places on having a designated individual accountable for the restaurant's operations and adherence to the franchise terms. Therefore, franchisees need to be aware of how ownership and management structures can impact their obligations and relationship with Jersey Mike's.