What is the Jersey Mikes franchisee's obligation upon the death or permanent disability of a Controlling Principal, according to Section 19.8(b)?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
results in a change in executive-level responsibility for managing the Franchised Restaurant.
- b. Upon the occurrence of an event described in Section 19.8(a), a Principal of Franchisee shall notify Franchisor of the event and indicate Franchisee's intention of continuing to operate the Restaurant according to this Section 19.8(b). D uring the first one hundred twenty (120) days after the death or Permanent Disability occurs, Franchisor will evaluate the interim management's willingness and ability to operate the Franchised Restaurant in compli ance with this Agree ment. By the end of the one hundred twenty (120)-day evaluation period, Franchisor will decide whether the interim management is qualified to manage the Franchised Restaurant and become its Controlling Principal, and will notify Franchisee's known Principals of its decision. As conditions to continuing the Franchise relationship, each Principal shall furnish Franchisor a signed G uaranty and Assumption of Obligations and any deficiency in Franchisee's compliance with the requirements of this Agreement shall be cured. Further, Franchisor may require the new Controlling Principal or designated manager to attend and satisfactorily complete the Franchisor's initial training program.
- c.
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mikes' 2025 Franchise Disclosure Document, Section 19.8(b) outlines the franchisee's obligations following the death or permanent disability of a Controlling Principal, provided this event results in a change in executive-level responsibility for managing the franchised restaurant. The franchisee's Principal must notify Jersey Mikes of the event and indicate their intention to continue operating the restaurant.
During the 120 days following the death or permanent disability, Jersey Mikes will evaluate the interim management's ability to operate the restaurant in compliance with the franchise agreement. By the end of this evaluation period, Jersey Mikes will decide whether the interim management is qualified to manage the restaurant and become the new Controlling Principal, and will notify the franchisee's Principals of their decision.
To continue the franchise relationship, each Principal must furnish Jersey Mikes with a signed Guaranty and Assumption of Obligations. Additionally, any deficiencies in the franchisee's compliance with the franchise agreement must be resolved. Jersey Mikes may also require the new Controlling Principal or designated manager to attend and satisfactorily complete the initial training program. This ensures that the restaurant continues to be managed according to Jersey Mikes' standards and procedures, even after a significant change in leadership.