When is the Development Fee payable to Jersey Mikes, and is it refundable?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
y.
- 1.4 This Agreement is not a Franchise Agreement, and Developer shall have no right to use in any manner the Marks by virtue of this Agreement.
- 1.5 Developer shall have no right under this Agreement to license or sublicense others to operate a business or use the System or the Marks.
2. DEVELOPMENT FEE
- 2.1 As consideration for the rights and options granted by this Agreement, Developer shall pay to Franchisor the Development Fee and the Initial Franchise Fee for each Restaurant as descri
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, the Development Fee is payable upon the execution of the Development Agreement. This fee compensates Jersey Mike's for the rights and options granted to the developer under the agreement.
Specifically, the FDD states that the Development Fee is considered fully earned by Jersey Mike's immediately upon the execution of the agreement. This means that Jersey Mike's is entitled to retain the fee as compensation for their efforts in granting the development rights and forgoing other potential franchising opportunities in the designated territory.
Furthermore, the 2025 FDD explicitly states that the Development Fee is non-refundable. Therefore, regardless of whether the developer successfully establishes and operates the planned Jersey Mike's restaurants, the Development Fee will not be returned. This is a standard practice in franchising, as the fee is intended to compensate the franchisor for the initial costs and efforts associated with granting the development rights.