What entities were transferred to the Seller upon completion of the Jersey Mikes transaction?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
18. SUBSEQUENT EVENTS
The Company has evaluated events through March 14, 2025, the date these consolidated financial statements were available for issuance, for consideration as a subsequent event to be included in the accompanying consolidated financial statements.
On November 8, 2024, the Company and its equity holders entered into an Equity Purchase Agreement with Submarine Buyer LLC (the "Buyer"), a Delaware limited liability company controlled by affiliates of Blackstone Inc. Pursuant to the Equity Purchase Agreement, Jersey Mike's Inc. ("Seller") formed a new Delaware limited liability company, Jersey Mike's HoldCo LLC, to indirectly hold 100% of the equity interests of the Company (the "Transaction"). On January 16, 2025, the Company was acquired for an enterprise value of $8.0 billion which includes a maximum additional $250 million in cash and is payable upon reaching certain earnout conditions or upon a change in control event. Upon completion of the transaction, the 2251 Landmark Place, LLC and Farnborough, LLC entities were transferred to the Seller and will decrease property and equipment by approximately $79 million and notes payable by approximately $56 million. As of the date these financial statements are available to be issued, the preliminary purchase price allocation accounting for the Transaction is not yet complete. The Company expects to finalize its analysis within th
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, upon completion of the transaction with Submarine Buyer LLC on January 16, 2025, the entities 2251 Landmark Place, LLC and Farnborough, LLC were transferred to the Seller, Jersey Mike's Inc. This transfer resulted in a decrease of approximately $79 million in property and equipment and approximately $56 million in notes payable. The total enterprise value of the acquisition was $8.0 billion, which includes a maximum additional $250 million in cash payable upon reaching certain earnout conditions or a change in control event.
This information is relevant to potential franchisees as it provides insight into the financial restructuring and ownership changes within Jersey Mike's. The transfer of these specific entities and the associated balance sheet adjustments reflect the internal reorganization following the acquisition. While the FDD mentions the acquisition and transfer of entities, it also notes that the preliminary purchase price allocation accounting for the transaction was not yet complete as of the date the financial statements were issued. The company expected to finalize its analysis within one year from the acquisition date.
Prospective franchisees should be aware of these changes as they might influence the future strategies and financial stability of Jersey Mike's. Although the FDD provides a snapshot of the immediate impacts, the complete financial implications will become clearer once the purchase price allocation is finalized. It is common for acquisitions of this scale to involve complex financial restructuring, and franchisees should stay informed about any updates that could affect their investment and the overall franchise system.