What is the definition of 'Traditional Franchised Restaurants' for Jersey Mike's, as used in the financial performance representation?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
As used in this Item 19, the following terms have the meanings given them below:
- "Traditional Franchised Restaurants" means JERSEY MIKE'S Restaurants (other than Non-Traditional Restaurants) that were operated by third-party franchisees for greater than 360 days during the Measurement Period.
- "Non-Traditional Restaurants" means JERSEY MIKE'S Restaurants that were operated by third-party franchisees or licensees in an airport, casino, arena, hospital, military installation, school, stadium, ghost kitchen, or similar venue.
- "Measurement Period" means the 12-month period beginning on January 1, 2024 and ending on December 31, 2024.
- "Unit Volume" means the total of all sales of food products, beverages, other merchandise and products, and services to customers, whether or not sold or performed at or from the JERSEY MIKE'S Restaurant (including off site sales and catering sales), regardless of whether the sales were made in compliance with the Franchise Agreement, less sales, use or service taxes collected and paid to the appropriate taxing authority, and customer refunds, discounts, coupons, and donations.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 64–66)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, 'Traditional Franchised Restaurants' are defined as Jersey Mike's Restaurants, excluding Non-Traditional Restaurants, that have been operated by third-party franchisees for more than 360 days during the Measurement Period. The Measurement Period for the financial performance data in Item 19 is defined as the 12-month period from January 1, 2024, to December 31, 2024. This distinction is important because the financial performance representations provided in Item 19 are based on the performance of these Traditional Franchised Restaurants.
Jersey Mike's uses this definition to differentiate between standard franchise locations and those operating in non-traditional venues such as airports, casinos, or military installations. The FDD specifies that Non-Traditional Restaurants are Jersey Mike's Restaurants operated by third-party franchisees or licensees in an airport, casino, arena, hospital, military installation, school, stadium, or ghost kitchen. The performance of these non-traditional locations may vary significantly due to factors like limited menus, higher operating costs, or unique customer demographics.
For a prospective franchisee, understanding this definition is crucial because the financial data presented in Item 19, such as the average unit volume of $1,338,874, the median unit volume of $1,285,259, the high unit volume of $4,131,736, and the low unit volume of $472,525, applies specifically to Traditional Franchised Restaurants. This allows potential franchisees to assess the financial performance of restaurants operating under standard conditions. It is important to note that 2,255 Traditional Franchised Restaurants were included in the data, while 734 restaurants were excluded for various reasons, including operating for fewer than 361 days, not using the designated POS system, being Non-Traditional Restaurants, or being owned or managed by the company.
This distinction ensures that franchisees are provided with financial performance data that is relevant to the typical franchise operation. By excluding non-traditional venues and restaurants with incomplete operating histories, Jersey Mike's aims to provide a more accurate and representative picture of the potential financial performance of a standard Jersey Mike's franchise. Prospective franchisees should focus on the performance metrics of these Traditional Franchised Restaurants to gauge their potential earnings and make informed decisions.