Following termination of the Jersey Mikes Franchise Agreement, what geographic areas are covered by the non-competition covenant?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| p. Your death or disability | Section 20 | Your heirs, beneficiaries, devisees or legal representative can apply to Company to continue operation of the Franchised Restaurant or sell or otherwise transfer interest in the Franchised Restaurant following death or incapacity of any person owning 50% or more interest in Franchisee. If they fail t o meet th ese conditions, the Franch ise Agreement will terminate and Company will have the option to buy the Franchised Restaurant. |
| q. Non-competition covenants during the term of the franchise | Section 16.3 | You must not divert or attempt to divert any business or customer to a competitor, or perform any act which may harm the goodwill associated with the marks and the System; or own or otherwise have any interest in any business (including a business you currently operate) specializing in the sa le of submarine-type sandwiches or prepared food products the same as or similar to any product or service provided through the System. |
| r. Non-competition covenants after the franchise is terminated or expires | Section 16.4 | You must not own, maintain, engage in, consult with or have any interest in any business specializing in the sale of submarine-type sandwiches or prepared food products the same as or similar to any other product or service provided through the System for 2 years after the Franchise Agreement is terminated within the Metropolitan Statistical Area, as defined by the United States Census Bureau, in which the Franchised Restaurant is located or within a 10-mile radius of the Franchised Restaurant or within a 10-mile radius of any other business using the System. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–64)
What This Means (2025 FDD)
According to Jersey Mikes's 2025 Franchise Disclosure Document, if the Franchise Agreement is terminated or expires, the franchisee is subject to a non-competition covenant. This covenant restricts the franchisee from engaging in any business that specializes in the sale of submarine-type sandwiches or prepared food products similar to those offered through the Jersey Mikes system.
The geographic scope of this restriction extends for two years after the termination of the Franchise Agreement. During this period, the franchisee is prohibited from operating a competing business within the Metropolitan Statistical Area (as defined by the United States Census Bureau) where the franchised restaurant is located. The non-compete area also includes a 10-mile radius of the former Jersey Mikes location or within a 10-mile radius of any other business using the Jersey Mikes system.
This post-term non-compete obligation is a standard practice in franchising to protect the brand and prevent franchisees from using the franchisor's confidential information and business model to compete against the system after leaving. Prospective Jersey Mikes franchisees should carefully consider the implications of this covenant, as it could significantly limit their business opportunities for two years following the end of the franchise agreement.