For Jersey Mikes franchisees, what is the primary intended use of the Collateral acquired?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
restaurant concept. franchises the trademarks, trade names, service marks, logos, marketing concepts, and marketing programs, which are the basic attributes of the franchised operations.
JM 75, LLC was formed as a Delaware limited liability company in connection with the initial 2019 securitization transaction, which is further described in Note 4—Securitization Transactions. JM 75, LLC is a direct wholly owned subsidiary of Jersey Mike's Funding, LLC. The principal activity is the administration of supply chain and brand dollar payment arrangements for Jersey Mike's submarine sandwich restaurants.
JM Gift Card Operating Co. LLC was formed as a Virginia limited liability company, wholly owned subsidiary of Jersey Mike's Franchise Systems, LLC as a result of the gift card restructuring, which is further described in Note 2—Summary of Significant Accounting Policies.
Principles of Consolidation—The consolidated financial statements include the accounts of the above-listed entities and are collectively referred to as Jersey Mike's Franchise Systems, LLC and Affiliates. All intercompany balances and transactions have been eliminated in consolidation. The Company evaluates its business relationships, such as those with franchisees, suppliers, and advertising cooperatives, to identify potential variable interest entities. The Company has concluded, based on their review and evaluation of professional standards, that certain of its franchises are variable interest entities; however, as the Company is not the primary beneficiary, these entities have not been consolidated.
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, the company's intellectual property, including trademarks, trade names, service marks, and logos, are key components of the franchised operations. These assets are securitized, meaning they are used as collateral in financial transactions. Specifically, Jersey Mike's, through its parent company and subsidiaries, contributed these intellectual properties, franchise agreements, and development agreements to Securitization Entities in 2019. This was part of a securitization transaction.
The Securitization Entities then granted the parent company a license to use and sublicense the intellectual property for operating Jersey Mike's restaurants. This license includes the use of these assets in the company's and its affiliates' corporate or trade names, as well as in connection with other products, services, and gift card programs. The parent company also entered into a management agreement with the Securitization Entities to manage operations, collect franchisee payments, and provide franchising, marketing, and real estate services.
For a prospective franchisee, this means that the core brand assets they will be using to operate their Jersey Mike's restaurant are part of a larger financial structure. While franchisees directly benefit from using the brand's trademarks and operational systems, these assets are also used by Jersey Mike's for financial purposes, such as securing financing through securitization. This arrangement allows Jersey Mike's to manage its intellectual property and franchise network while also leveraging these assets for financial activities.