Following termination of a Jersey Mikes franchise, what is the geographic scope of the non-compete 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, the franchisee is subject to a non-compete 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 by 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 within the Metropolitan Statistical Area, as defined by the United States Census Bureau, where the original franchised restaurant was located.
In addition to the Metropolitan Statistical Area, the non-compete also applies within a 10-mile radius of the former Jersey Mikes restaurant location. Furthermore, the restriction includes a 10-mile radius of any other business that is using the Jersey Mikes system. This provision ensures that former franchisees cannot open a competing business near any existing Jersey Mikes location, protecting the brand's market presence.