What is the development fee due to Jersey Mikes when signing an Area Development Agreement for 3 franchises?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Expenditure | Actual or Estimated Amounts | Method of Payment | When Due | To Whom Payment Is To Be Made | |
|---|---|---|---|---|---|
| Development Fee1 | $50,000 - $120,000 | Lump Sum | On Signing of the Area Development Agreement | Company | 1 Development Fee. The development fee for 3 JERSEY MIKE'S franchises established under an Area Development Agreement is $50,000, payable to Company when you sign the Area Development Agreement. No initial franchise fee will be due when you sign individual Franchise Agreements. The development fee for 5 JERSEY MIKE'S franchises established under an Area Development Agreement is $50,000, payable to Company when you sign the Area Development Agreement. In addition to the development fee, an initial fr anchise fee of $6,000 per franchise is due when you sign the franchise agreement for each franchise location. The development fee for 10 JERSEY MIKE'S franchises established under an Area Development Agreement is $120,000, payable to Company when you sign the Ar ea Development Agreement. No initial franchise fee will be due when you sign individual Franchise Agreements. The develo |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 24–28)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, if you sign an Area Development Agreement for three Jersey Mike's franchises, you must pay a development fee of $50,000. This fee is payable to Jersey Mike's when you sign the Area Development Agreement.
The FDD specifies that no initial franchise fee will be due when you sign individual Franchise Agreements under this arrangement. This means the $50,000 covers the right to develop those three locations, but you will likely have other costs as you open each location.
It is important to note that this development fee is non-refundable, so a prospective franchisee should carefully consider their plans and capabilities before entering into an Area Development Agreement with Jersey Mike's. This is a common practice in franchising, as the franchisor incurs costs in setting up the agreement and reserving the territory for the developer.