For Jersey Mikes, how must the funds disbursed in respect of the Total Advance be used?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
USE OF PROCEEDS.
All funds disbursed in respect of the Total Advance shall be used solely to fund Maker's acquisition of the Permitted Items for the Restaurant (the "Acquisition").
DISBURSEMENTS.
All amounts in respect of the Total Advance shall be disbursed by Holder or its agents and affiliates directly to the vendors set forth on the attached Exhibit A, on or about the dates set forth on such Exhibit A, in the amounts set forth on such Exhibit A, and in accordance with the payment instructions set forth on such Exhibit A; it being acknowledged and agreed that such disbursements to such vendors are being made by Holder at the direction of Maker to fund the Acquisition.
MAKER HEREBY ACKNOWLEDGES THAT MAKER HA S REVIEWED THE ATTACHED EXHIBIT A CAREFULLY, AND TH AT THE INFORMATION SET FORTH THEREIN IS ACCURATE AND COMPLETE.
MAKER HEREBY IRREVOCABLY
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, any funds disbursed as part of the Total Advance must be used exclusively for the acquisition of Permitted Items for the restaurant. This means the funds are specifically earmarked to purchase approved equipment, supplies, and other items necessary to get the Jersey Mike's location up and running.
The FDD specifies that these funds will be disbursed directly to the vendors listed in Exhibit A. These disbursements will occur on or around the dates, in the amounts, and according to the payment instructions also detailed in Exhibit A. This process is managed by the Holder (likely a financing entity) at the direction of the Maker (the franchisee), ensuring that the funds are used as intended for the acquisition of the Permitted Items.
A prospective Jersey Mike's franchisee should carefully review Exhibit A to understand which vendors will be paid, the amounts, and the payment schedule. The franchisee acknowledges having reviewed Exhibit A and confirms the accuracy and completeness of the information contained therein. This arrangement provides a structured approach to financing the initial setup of the restaurant, but it also limits the franchisee's flexibility in how these funds can be used, as they are restricted to pre-approved vendors and items.