What is the definition of 'Principal' in the context of a Jersey Mikes franchise?

According to Jersey Mike's 2025 Franchise Disclosure Document, a 'Principal' refers to individuals who hold significant positions or ownership within the franchisee's business structure. Specifically, if the franchisee is a business entity, a Principal includes the entity's officers, directors, partners, or members. It also encompasses individuals who hold an ownership interest in the franchisee entity or its affiliates, as well as those who have an ownership stake in the assets of the Jersey Mike's restaurant itself.

This definition is important because Jersey Mike's requires Principals to meet certain qualifications and fulfill specific obligations. For instance, Principals may need to execute a Guaranty and Assumption of Obligations, demonstrating their commitment to the financial and operational responsibilities of the franchise. Additionally, Jersey Mike's assesses the skills, qualifications, ethics, moral values, and economic resources of the Principals to ensure they are capable of successfully operating the restaurant and meeting their obligations to the franchisor.

Furthermore, if there is a transfer of ownership, the transferee's Principals must also apply for acceptance as a Jersey Mike's franchisee and provide the necessary information for the franchisor to evaluate their suitability. Existing Jersey Mike's franchisees and their Principals seeking to expand must also receive approval from Jersey Mike's for growth. Therefore, understanding who qualifies as a Principal is crucial for anyone considering a Jersey Mike's franchise, as it directly impacts the approval process, obligations, and overall management of the franchise.