What events are considered an 'Asset Transfer' for a Jersey Mikes franchise?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
ch case, without Franchisor's prior written consent. Any Transfer or attempted Transfer lacking Franchisor's prior written consent or that otherwise violates the restrictions in this Section 8 shall be ineffective against Franchisor and, without limiting Franchisor's remedies, shall constitute a default under Section 8.
- 8.2 Conditions to Voluntary Transfer of Rights. Neither Developer nor any Principal (defined in Section 20) shall effectuate an Asset Transfer (defined in Section 20) before the first Franchised Restaurant granted according to this Agreement opens for business. Developer or its Principals only may Transfer its rights under this Development Agreement or in the Developer itself, if it also assigns to the transferee all of its interests under each Franchise Agreement entered into according to this Agreement. Any Asset Transfer shall be subject to Franchisor's prior written consent, in its sole and absolute discretion. Franchisor may condition its consent on compliance with certain requirements, including, without limitation, any of the following (which Developer agrees are reasonable):
- (a) At the time of Asset Transfer, Developer and its Affiliates is in full compliance with Developer's obligations under this Agreement and all other agreements between Developer and Franchisor and its Affiliates, including payment of all monetary obligations due Franchisor and its Affiliates;
- (b) The transferee executes Franchisor's then current form of Development Agreement and Franchise Agreement (which shall limit the term of the transferee's Development Agreement and
Franchise Agreement to the unexpired term of this Agreement and which shall supersede the terms of this Agreement), Guaranty and Assumption of Obligations, and other collateral agreements Franchisor may then require in connection with new Development Agreements and Franchise Agreements;
- (c) The transferee provides Franchisor a waiver and release with respect to liability for any financial data, earnings claims, representations and other information Developer or its representatives provided the transferee;
- (d) Each Principal executes a Guaranty and Assumption of Obligations (Exhibit F-1).
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, an Asset Transfer for a Jersey Mikes franchise involves transferring rights under the Development Agreement or in the Developer itself, which must include assigning all interests under each Franchise Agreement to the transferee. This transfer is subject to Jersey Mike's prior written consent, which they may condition on certain requirements.
Specifically, neither the franchisee nor any principal can execute an Asset Transfer before the franchised restaurant opens for business. After opening, any Asset Transfer requires Jersey Mike's prior written consent, which they can grant or deny at their discretion.
Jersey Mike's may require that at the time of the Asset Transfer, the franchisee is in full compliance with all obligations and agreements, including payments. The transferee must also execute Jersey Mike's current form of franchise agreement, Guaranty and Assumption of Obligations, and other collateral agreements. This ensures that any new franchisee meets Jersey Mike's standards and assumes all responsibilities, protecting the brand's integrity and stability.