Is the development fee for Jersey Mike's franchises refundable?
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, the development fee is non-refundable. The development fee for three Jersey Mike's franchises under an Area Development Agreement is $50,000, payable when signing the agreement. Similarly, the development fee for five franchises is also $50,000, and for ten franchises, it is $120,000, both payable upon signing the Area Development Agreement. No initial franchise fee is due when signing individual Franchise Agreements under an Area Development Agreement. However, an initial franchise fee of $6,000 per franchise is due when signing the franchise agreement for each franchise location in addition to the development fee.
This non-refundable policy means that once a prospective Jersey Mike's franchisee pays the development fee, they cannot get it back, regardless of whether they eventually open the agreed-upon number of locations. This is a significant financial commitment and risk for the franchisee. It is crucial to carefully consider the terms of the Area Development Agreement and the ability to fulfill the development schedule before signing the agreement and paying the fee.
In the franchise industry, non-refundable fees are relatively common, as they compensate the franchisor for the time, resources, and lost opportunities associated with awarding a territory to a franchisee. However, prospective franchisees should always seek legal and financial advice to fully understand the implications of such fees and ensure they are comfortable with the risk involved before entering into a franchise agreement with Jersey Mike's.